acting on behalf of such sponsor has a written agreement with the PDP sponsor under which the pharmacy benefit manager agrees to meet the following requirements: (A) No income other than bona fide service fees (i) In general The pharmacy benefit manager and any affiliate of such pharmacy benefit manager shall not derive any remuneration with respect to any services provided in connection with the utilization of covered part D drugs from any entity or individual other than bona fide service fees, subject to clauses (ii) and (iii). (ii) Incentive payments For the purposes of this subsection, an incentive payment paid by a PDP sponsor to a pharmacy benefit manager that is performing services on behalf of such sponsor shall be deemed a bona fide service fee if such payment is a flat dollar amount, is consistent with fair market value, and is related to services actually performed by the pharmacy benefit manager or affiliate of such pharmacy benefit manager in connection with the utilization of covered part D drugs. (iii) Clarification on rebates and discounts used to lower costs for covered part d drugs Rebates, discounts, and other price concessions received from manufacturers, even if such price concessions are calculated as a percentage of a drug’s price, shall not be considered a violation of the requirements of clause (i) if they are fully passed through to a PDP sponsor and exclusively used to lower costs for prescription drugs under this part, including in cases where a PDP sponsor is acting as a pharmacy benefit manager on behalf of a prescription drug plan offered by such PDP sponsor. (iv) Evaluation of remuneration arrangements Remuneration arrangements between pharmacy benefit managers or affiliates of such pharmacy benefit managers, as applicable, and other entities involved in the dispensing or utilization of covered part D drugs (including PDP sponsors, manufacturers, pharmacies, and other entities as determined appropriate by the Secretary) shall be subject to review by the Secretary and the Office of