; and (C) that, as determined by the Secretary— (i) maintains an appropriate level of transparency on locations of manufacturing; (ii) maintains an appropriate level of diversity in sourcing; (iii) maintains appropriate levels of inventory and emergency reserves; (iv) has in place an appropriate action plan for increases in demand and for when links in the supply chain break down; and (v) meets any other characteristics the Secretary determines appropriate. (3) Applicable tools The term applicable tools means tools determined appropriate by the Secretary, such as— (A) preferential treatment on a formulary; (B) providing lower cost-sharing; (C) waiving rebates under the Medicaid program under title XIX; (D) establishing a Medicare Star Rating under part D of title XVIII; or (E) providing bonus payments to providers of services and suppliers under part B of title XVIII. (4) Critical drug In this section, the term critical drug includes the following: (A) A medicine, medical countermeasure, or critical input identified on the list under section 3(c) of Executive Order 13944 of August 6, 2020 (85 Red. Reg 49929; relating to essential medicines, medical Countermeasures, and critical inputs). (B) A drug or biological that— (i) is not described in subparagraph (A); (ii) is approved and marketed under section 505(c) of the Federal Food, Drug, and Cosmetic Act or is licensed and marketed under section 351(a) of the Public Health Service Act (or is an active pharmaceutical ingredient of such a drug or biological); and (iii) the Secretary determines— (I) is— (aa) likely to be needed for use in a public health emergency; or (bb) at high risk of short supply