; or (B) the price paid to procure the drug under section 8126 of title 38, United States Code. (3) Applicable covered part D drug defined For purposes of this subsection, the term applicable covered part D drug means a covered part D drug that the Secretary determines to be appropriate for negotiation under paragraph (1) based on one or more of the following factors as applied to such drug: (A) Spending on a per beneficiary basis. (B) Spending under this title. (C) Unit price increases over the preceding years. (D) Initial launch price. (E) Availability of similarly effective alternative treatments. (F) Status of the drug as a follow-on to previously approved drugs. (G) Any other criteria determined by the Secretary. (4) PDP sponsors and MA organization may negotiate lower prices Nothing in this subsection shall be construed as preventing the sponsor of a prescription drug plan, or an organization offering an MA–PD plan, from obtaining a discount or reduction of the price for a covered part D drug below the price negotiated under paragraph (1) or the price established under paragraph (2). (5) No affect on existing appeals process Nothing in this subsection shall be construed to affect the appeals procedures under subsections (g) and (h) of section 1860D–4. . (2) Effective date The amendments made by this subsection shall take effect on the date of the enactment of this Act and shall first apply to negotiations and prices for plan years beginning on January 1, 2019. (b) Reports to Congress (1) Secretary of HHS (A) In general Not later than 3 years after the date of the enactment of this Act, and every 6 months thereafter, the Secretary of Health and Human Services shall submit to Congress a report on the following: (i) The negotiations conducted by the Secretary under section 1860D–11(i) of the Social Security Act ( 42 U.S.C. 1395w–111(i) ), as amended by subsection (a), including a description of how such negotiations are achieving lower prices for covered part D drugs (as defined in section 1860D–2(e) of the