line extension
(2) Additional rebate for single source and innovator multiple source drugs (A) In general The amount of the rebate specified in this subsection for a rebate period, with respect to each dosage form and strength of a single source drug or an innovator multiple source drug, shall be increased by an amount equal to the product of— (i) the total number of units of such dosage form and strength dispensed after December 31, 1990 , for which payment was made under the State plan for the rebate period; and (ii) the amount (if any) by which— (I) the average manufacturer price for the dosage form and strength of the drug for the period, exceeds (II) the average manufacturer price for such dosage form and strength for the calendar quarter beginning July 1, 1990 (without regard to whether or not the drug has been sold or transferred to an entity, including a division or subsidiary of the manufacturer, after the first day of such quarter), increased by the percentage by which the consumer price index for all urban consumers (United States city average) for the month before the month in which the rebate period begins exceeds such index for September 1990. (B) Treatment of subsequently approved drugs In the case of a covered outpatient drug approved by the Food and Drug Administration after October 1, 1990 , clause (ii)(II) of subparagraph (A) shall be applied by substituting “the first full calendar quarter after the day on which the drug was first marketed” for “the calendar quarter beginning July 1, 1990 ” and “the month prior to the first month of the first full calendar quarter after the day on which the drug was first marketed” for “September 1990”. (C) Treatment of new formulations (i) In general 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 for a rebate period with respect to such drug under this subsection shall be the greater of the amount described in clause (ii) for such drug or the amount described in clause (iii) for such drug. (ii) Amount 1 For purposes of clause (i), the amount described in this clause with respect to a drug described in clause (i) and rebate period is the amount computed under paragraph (1) for such drug, increased by the amount computed under subparagraph (A) and, as applicable, subparagraph (B) for such drug and rebate period. (iii) Amount 2 For purposes of clause (i), the amount described in this clause with respect to a drug described in clause (i) and rebate period is the amount computed under paragraph (1) for such drug, increased by the product of— (I) the average manufacturer price for the rebate period 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 paragraph for the rebate period 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, but does not include an abuse-deterrent formulation of the drug (as determined by the Secretary), regardless of whether such abuse-deterrent formulation is an extended release formulation. (D) Maximum rebate amount In no case shall the sum of the amounts applied under paragraph (1)(A)(ii) and this paragraph with respect to each dosage form and strength of a single source drug or an innovator multiple source drug for a rebate period beginning after December 31, 2009 , and before January 1, 2024 , exceed 100 percent of the average manufacturer price of the drug.