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CMS adopted this provision to clarify CMS' intended policy, as highlighted by examples in the CY 2025 PFS proposed rule, that while CMS will generally apply the shortage reduction starting with the first applicable period that a drug or biological covered under Part D is described as currently in shortage, CMS acknowledges that for such drug or biological that has been granted a rebate reduction for a severe supply chain disruption or for such generic drug that has been granted a rebate reduction for a likely shortage, it would be appropriate to delay the start of the applicable percent reduction for being in shortage until after the conclusion of the severe supply chain disruption reduction or likely to be in shortage reduction if the shortage continues

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