"Section 1860D-14A(c)(2) [of the Social Security Act] specifies that if a Part D sponsor offers supplemental Part D coverage, the discount will not be applied until after such supplemental coverage has been applied to the applicable [brand-name] drug. If the supplemental coverage eliminates the coverage gap (with the exception of routine cost sharing), no [Donut Hole] discount is available because the discount is only applied to the portion of the negotiated price that falls within a coverage gap. Therefore, PACE plans that have no coverage gap by statutory design are excluded from the Discount Program." [emphasis added]See: https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/downloads/2011CoverageGapDiscount_043010.pdf (draft guidance: "Medicare Coverage Gap Discount Program beginning in 2011" 04/30/2010 and revised guidance "Medicare Coverage Gap Discount Program Beginning in 2011: Revised Part D Sponsor Guidance and Responses to Summary Public Comments on the Draft Guidance" 05/21/2010)