The bill amends section 1860D–14C(g)(4) of the Social Security Act to create a multiyear phase-in for how the Part D manufacturer discount applies to plasma-derived biologics. For qualifying products marketed as of August 16, 2022, the bill replaces the standard definition of “discounted price” with a year-by-year percentage of the negotiated price for those drugs, with separate schedules tied to a beneficiary’s out-of-pocket status.
The amendment also carves out certain categories—low-income subsidy (LIS) situations and manufacturers already exempted under existing statutory language.
Why it matters: the bill reduces the immediate discount manufacturers must provide for a narrow class of high-dependency biologics, which could ease manufacturer cash-flow and supply risk for plasma-derived therapies but shifts the arithmetic that plans and CMS use to calculate net drug spending under Part D. That change will require systems work by plan sponsors and CMS and could alter how costs are allocated between manufacturers, plans, and beneficiaries over time.
At a Glance
What It Does
The bill adds a new subparagraph to 1860D–14C(g)(4) that defines a special, phased-in ‘discounted price’ for plasma-derived products by referencing a specified percentage of the negotiated price that declines over time. It distinguishes beneficiaries based on whether they have reached the Part D annual out-of-pocket threshold for the year and preserves existing statutory exemptions.
Who It Affects
Directly affected parties include manufacturers of plasma-derived biologics marketed by Aug. 16, 2022, Medicare Part D plan sponsors and PBMs that must apply the revised discounted-price calculation, and CMS administrators who must identify qualifying products and enforce the new methodology. Patients who depend on plasma-derived therapies may see indirect effects through supply stability and plan operations.
Why It Matters
This law changes the math that determines manufacturer liability under Part D for a targeted set of specialty biologics, which could alter incentive structures for pricing, contracting, and supply management. Compliance teams will need to update pricing models and reporting systems; policy teams should watch downstream effects on plan costs and beneficiary premiums.
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What This Bill Actually Does
The PLASMA Act inserts a new carve-out into the Part D manufacturer discount rules so that certain plasma-derived biologics do not use the standard manufacturer-discount calculation. Instead, for each calendar year starting in 2026, the manufacturer’s ‘discounted price’ for those products equals a defined percentage of the plan’s negotiated price.
The law treats beneficiaries differently depending on whether they have reached the plan’s annual out-of-pocket threshold for that year — a distinction that changes which percentage applies.
Operationally, the bill limits its scope to biologics derived from human whole blood or plasma and only to products on the market as of August 16, 2022. It also preserves pre-existing exclusions: the special calculation does not apply to drugs dispensed to LIS beneficiaries covered by the subparagraph the statute already exempts, nor to manufacturers that meet the statute’s small-manufacturer criteria.
That combination of a hard market-date cutoff and statutory exceptions means plans and CMS must identify a moving subset of Part D drugs eligible for the phase-in.Because the statute ties the discounted price to the negotiated price, the bill affects how plan liability, manufacturer discounts, and beneficiary out-of-pocket accrual interact. Plans will need to track which outpatient claims involve qualifying plasma products and apply the year-specific percentage when computing manufacturer contributions.
CMS must operationalize the definitions, publish guidance, and reconcile plan reporting to ensure consistency across contract years. The change does not directly amend coinsurance or statutory beneficiary cost-sharing percentages, but it reconfigures the underlying accounting that determines who ultimately bears net drug costs.
The Five Things You Need to Know
The phase-in applies beginning in 2026 and uses a year-by-year schedule of percentages of negotiated price that determine the ‘discounted price’ for qualifying plasma-derived products.
For beneficiaries who have not reached the annual out-of-pocket threshold, the specified plasma-derived product percentages are: 99% (2026), 98% (2027), 95% (2028), 92% (2029), and 90% for 2030 and later.
For beneficiaries who have reached the annual out-of-pocket threshold, the percentages are steeper over time: 99% (2026), 98% (2027), 95% (2028), 92% (2029), 90% (2030), 85% (2031), and 80% for 2032 and later.
The rule only applies to plasma-derived biological products derived from human whole blood or plasma that were marketed as of August 16, 2022; it excludes drugs dispensed to LIS beneficiaries and manufacturers already exempted under the statute’s small-manufacturer provision.
The bill is a targeted amendment to 42 U.S.C. 1395w–114c(g)(4), adding a new subparagraph (D) that creates the phase-in and the plasma-derived product definition rather than changing Part D coinsurance or benefit design directly.
Section-by-Section Breakdown
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Short title — 'PLASMA Act'
Establishes the act’s name: 'Preserving Life-saving Access to Specialty Medicines in America Act'. This is a formal header with no programmatic effect but is useful shorthand for regulatory guidance and future references in CMS notices and rulemaking.
Creates new subparagraph (D) — phase-in mechanism
The core change inserts a new subparagraph that changes how the statutory term 'discounted price' is calculated for qualifying plasma-derived products. Rather than using the existing discount computation, the law maps the discounted price to a fixed percentage of the negotiated price that varies by calendar year. Agencies and plans will need to adapt claims-processing systems to apply the correct year-specific percentage for each claim.
Defines 'plasma-derived product'
The bill defines a plasma-derived product as a biological product derived from human whole blood or plasma. That definition is narrow and will require CMS to publish a list or criteria to identify eligible NDCs and biologics; disputes may arise about borderline products (for example, recombinant products or those using plasma-derived components).
Year-by-year percentage schedule and exemptions
The statute sets two separate percentage tracks depending on a beneficiary’s out-of-pocket status and specifies the exact percentage for each year from 2026 onward. It explicitly excludes drugs dispensed to LIS beneficiaries covered under the already-existing subparagraph and manufacturers that meet the small-manufacturer exemption referenced in the statute. Those exclusions limit the scope of the phase-in but create administrative complexity in identifying and applying exceptions at the claim level.
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Who Benefits
- Patients dependent on plasma-derived therapies — by reducing immediate manufacturer discount pressure, the bill aims to lower short-term supply disruption risk and preserve availability of critical biologics.
- Manufacturers of plasma-derived biologics marketed by Aug. 16, 2022 — receive a staged reduction in discount obligations that improves near-term cash flow and reduces the financial shock of full discounts being applied immediately.
- Smaller manufacturers and those supplying drugs to LIS beneficiaries (indirectly) — because the statute preserves existing exemptions, those groups avoid the new calculation and its compliance burdens.
Who Bears the Cost
- Medicare Part D plan sponsors and PBMs — will face operational and possibly financial impacts from recalculating manufacturer discounts, reconciling reduced manufacturer contributions, and adjusting models that allocate costs between plan, manufacturer, and beneficiary.
- CMS and Medicare administrative staff — must identify qualifying products, issue guidance, update reporting and oversight processes, and reconcile manufacturer and plan data, creating an unfunded implementation burden.
- Non-LIS Part D beneficiaries collectively — to the extent reduced manufacturer discounts lower offsets that otherwise suppress plan costs, the shift could influence future premiums or plan design, dispersing costs across enrollees rather than manufacturers.
Key Issues
The Core Tension
The central dilemma is protecting access to essential plasma-derived therapies by reducing immediate manufacturer financial pressure versus preserving the Part D manufacturer-discount mechanism that helps contain plan and program costs; easing manufacturer obligations can sustain supply but weakens a tool that offsets Part D spending and influences premiums, and implementation raises tricky definitional and administrative choices without a single right answer.
The statute addresses a narrow policy goal — easing manufacturer discount obligations for a class of plasma-derived biologics — but creates trade-offs with program finance and administration. By lowering the manufacturer contribution calculation, the bill reduces a direct price signal that helps offset Part D spending; that saved manufacturer outflow can stabilize supply, but it also reduces a built-in mechanism that helps keep plan-level net costs lower.
Which effect dominates will vary across products and contracts, and plans must re-run actuarial and contract models to understand net impacts.
Implementation questions are substantial. CMS must operationalize the 'plasma-derived product' definition for claims adjudication and determine how to treat borderline or reformulated products.
The August 16, 2022 market-date cutoff creates grandfathering issues and potential strategic behaviors (for example, delaying new formulations or marketing dates). The bill references existing small-manufacturer exemptions without changing their thresholds, which could produce uneven competitive effects and opportunities for classification disputes.
Finally, because the law changes the mechanics of manufacturer discounts rather than direct beneficiary cost-sharing, the distributional effects across manufacturers, plans, and beneficiaries will depend heavily on downstream contracting and premiums — outcomes the statute does not control.
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