Background: An isoscalar pn pair is expected to emerge in nuclei that have similar proton and neutron numbers and it may be a candidate for a deuteron "cluster." There is, however, no experimental evidence for it. Purpose: The purpose of this paper is to construct a new reaction model for the (p, pd) reaction including the deuteron breakup in the elementary process and the deuteron reformation by the final-state interactions (FSIs). How these processes contribute to the observables of the reaction is investigated. Methods: The distorted wave impulse approximation is extended in twofold. The elementary processes of the (p, pd), i.e., the p-d elastic scattering and d(p, p)pn reaction, are described with an impulse picture employing a nucleon-nucleon effective interaction. The three-body scattering waves in the final state of the (p, pd) reaction are calculated with the continuum-discretized coupledchannels method. The triple differential cross section (TDX) of the (p, pd) reaction is calculated with the new model. Results: The elementary processes are described reasonably well with the present model. As for the (p, pd) reaction, the deuteron reformation can either increase or decrease the TDX height depending on the interference between the elastic and breakup channel of deuteron, while the back-coupling effect always decreases it. Conclusions: It is shown that the deuteron reformation significantly changes the TDX of the (p, pd) reaction through the interference. It is important to include this process to quantitatively discuss the (p, pd) cross sections in view of the deuteron formation in nuclei. For more quantitative discussion regarding the experimental data, further improvement will be necessary.