PUBLIC LAW 102-585—NOV. 4, 1992 106 STAT. 4969 ered entities comply with clause (i). If the Secretary does not establish a mechanism within 12 months under the previous sentence, the requirements of section 1927(a)(5)(C) of the Social Security Act shall apply. "(B) PROHmrriNG RESALE OF DRUGS. —With respect to any covered outpatient drug that is subject to an agreement under this subsection, a covered entity shall not resell or otherwise transfer the drug to a person who is not a patient of the entity.
- (C) AUDITING.—^A covered entity shall permit the Secretary and the manufacturer of a covered outpatient drug
that 18 subject to an agreement under this subsection with the entity (acting in accordance with procedures established by the Secretary relating to the number, duration, and scope of audits) to audit at the Secretary's or the manufacturer's expense the records of the entity that directly pertain to the entity's compliance with the requirements described in subparagraphs (A) or (B) with respect to drugs of the manufacturer. "(D) ADDITIONAL SANCJTION FOR NONCOMPLIANCE. —I f the Secretary finds, after notice and hearing, that a covered entity is in violation of a requirement described in subparagraphs (A) or (B), the covered entity shall be liable to the manufacturer of the covered outpatient drug that is the subject of the violation in an amount equal to the reduction in the price of the drug (as described in subparagraph (A)) provided under the agreement between the entity and the manufacturer under this paragraph. "(6) TREATMENT OF DISTINCT UNITS OF HOSPITALS.— In the case of a covered entity that is a distinct part of a hospital, the hospital shall not be considered a covered entity under this paragraph unless the hospital is otherwise a covered entity under this subsection. "(7) CERTIFICATION OF CERTAIN COVERED ENTITIES. — "(A) DEVELOPMENT OF PROCESS. —Not later than 60 days after the date of enactment of this subsection, the Secretary shall develop and implement a process for the certification of entities described in subparagraphs (J) and (10 of paragraph (4). "(B) INCLUSION OF PURCHASE INFORMATION.—The process developed under subparagraph (A) shall include a requirement that an entity applying for certification under this paragraph submit information to the Secretary concerning the amount such entity expended for covered outpatient dru^ in the preceding year so as to assist the Secretary m evaluating the validity of the entity's subsequent purchases of covered outpatient drugs at cUscounted prices. " (C) CRITERIA. — The Secretary shall make available to all manufacturers of covered outpatient drugs a description of the criteria for certification under this paragraph. "(D) LIST OF PURCHASERS AND DISPENSERS. —The certification process developed by the Secretary under subparagraph (A) shall iinclude procedures under which each State shall, not later than 30 days after the submission of the descriptions under subparagraph (C), prepare and submit a report to the Secretary tnat contains a list of entities