§1206. Drugs Rebates for New Formulations of Existing Drugs.

Health Care and Education Reconciliation Act of 2010

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) TREATMENT OF NEW FORMULATIONS.-Subparagraph (C) of section 1927(c)(2) of the Social Security Act (42 U.S.C. 1396R-8(c)(2)), as added by section 2501(d) of the Patient Protection and Affordable Care Act, is amended to read as follows:

''(C) TREATMENT OF NEW FORMULATIONS.-In the case of a drug that is a line extension of a single source drug or an innovator multiple source drug that is an oral solid dosage form, the rebate obligation with respect to such drug under this section shall be the amount computed under this section for such new drug or, if greater, the product of-

''(i) the average manufacturer price of the line extension of a single source drug or an innovator multiple source drug that is an oral solid dosage form;

''(ii) the highest additional rebate (calculated as a percentage of average manufacturer price) under this section for any strength of the original single source drug or innovator multiple source drug; and

''(iii) the total number of units of each dosage form and strength of the line extension product paid for under the State plan in the rebate period (as reported by the State). In this subparagraph, the term 'line extension' means, with respect to a drug, a new formulation of the drug, such as an extended release formulation.''.

(b) EFFECTIVE DATE.-The amendment made by subsection (a) shall take effect as if included in the enactment of the Patient Protection and Affordable Care Act.