II 112th CONGRESS 1st Session S. 1356 IN THE SENATE OF THE UNITED STATES July 13, 2011 Mr. Brown of Massachusetts (for himself, Mr. Wyden, and Mr. McCain) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XIX of the Social Security Act to encourage States to increase generic drug utilization under Medicaid, and for other purposes.

1.

Short title

This Act may be cited as the Affordable Medicines Utilization Act of 2011.

2.

Savings rebate for States that increase generic drug utilization under Medicaid

(a)

In general

Section 1903 of the Social Security Act (42 U.S.C. 1396b) is amended by inserting after subsection (g), the following: (h)(1)With respect to each of fiscal years 2012, 2013, and 2014, if the generic substitution rate determined for the State under section 1927(l)(2) for the most recent preceding fiscal year for which data is available is greater than the State's generic substitution rate (as so determined) for the most recent second preceding fiscal year for which data is available, the amount determined under subsection (a) for the State for each quarter of the fiscal year shall be increased by the amount equal to 50 percent of the generic drug utilization savings amount determined for the State and the quarter under paragraph (2). (2)The generic drug utilization savings amount determined under this paragraph with respect to a State and a quarter is the product of— (A)the difference between the— (i)total amount expended by the State for the corresponding quarter of the preceding fiscal year for providing medical assistance for multiple source drugs (as defined in section 1927(k)(7)(A)(i)), as determined after the application of section 1927(b)(1)(B); and (ii)total amount expended by the State for the quarter involved for providing medical assistance for such drugs (as so determined); and (B)the State percentage determined for the State under section 1905(b). . (b)

Annual determination of State generic substitution rates and performance rankings

Section 1927 of the Social Security Act (42 U.S.C. 1396r–8) is amended by adding at the end the following: (l)

Annual determination of State generic substitution rates and performance rankings

(1)

In general

Not later than January 1, 2012, and annually thereafter, the Secretary shall determine the generic substitution rate (as defined in paragraph (2)) for each State for the most recent preceding fiscal year and the most recent second preceding fiscal year for which data are available. The Secretary annually shall publish on the Internet Web site of the Centers for Medicare & Medicaid Services the generic substitution rates determined for each State for such preceding fiscal years and the percentage increase or decrease in such rates when compared with each other with respect to a State. On the basis of such comparison, the Secretary shall list the States in order of the States with the greatest increase in the generic substitution rate. (2)

Generic substitution rate

In paragraph (1), the term generic substitution rate means, with respect to a State, the share of all drug units for which payment is made to the State under this title for the 20 most widely prescribed multiple source drugs under the State program under this title that have a specific National Drug Code and meet the requirements of subsection (k)(7)(A)(i). . (c)

Evaluation and report

(1)

In general

Not later than December 31, 2014, the Secretary of Health and Human Services shall evaluate and report to Congress on the effectiveness of the generic drug utilization savings payments authorized under section 1903(h) of the Social Security Act (42 U.S.C. 1396b(h)) (as added by subsection (a)) in encouraging States to increase their Medicaid generic substitution rate. The evaluation shall include (but is not limited to) the following: (A)An analysis of the amounts each State Medicaid program saves through increased generic drug substitution. (B)An analysis of any indirect savings to State Medicaid programs through increased medication adherence due to increased accessibility and affordability of prescriptions. (C)An analysis of future estimated savings to State Medicaid programs and the Federal Government after termination of the generic drug utilization savings payments authorized under such section. (2)

Medicaid generic substitution rate

In paragraph (1), the term Medicaid generic substitution rate has the meaning given the term generic substitution rate with respect to a State under 1927(l)(2) of the Social Security Act (42 U.S.C. 1396r–8(l)(2)) (as added by subsection (b)).