Reducing prescription drug costs for children's medicine

(a)

In general

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

(8)

State option to apply rebate requirements to the State child health plan

(A)

In general

A State may elect to apply the requirements of this section and regulations promulgated to carry out this section to covered outpatient drugs for which payment is available under the State child health plan under title XXI in the same manner as such requirements apply to the State plan under this title, subject to such guidance as the Secretary shall establish.(B)

Application rules

If a State makes an election under subparagraph (A), then, in applying this section with respect to that State—(i)paragraph (1) of this subsection shall be applied as if or section 2105 (if the State has elected to apply this section to the State child health plan under title XXI) were inserted after 1903(a);(ii)paragraph (7)(A) of this subsection shall be applied—(I)as if or section 2105 (if the State has elected to apply this section to the State child health plan under title XXI) were inserted after 1903(a); and(II)as if (or, if the State has elected to apply this section to the State child health plan under title XXI, on or after the date this section first applies to the State) were inserted after January 1, 2006;(iii)paragraph (7)(B)(ii) of this subsection shall be applied—(I)as if or section 2105 (if the State has elected to apply this section to the State child health plan under title XXI) were inserted after 1903(a); and(II)as if (or, if the State has elected to apply this section to the State child health plan under title XXI, on or after the date this section first applies to the State) were inserted after January 1, 2008;(iv)subsection (b)(1)(A) shall be applied as if (or, if the State has elected to apply this section to the State child health plan under title XXI, on or after the date this section first applies to the State, to each State child health plan for which payment was made under such State child health plan for such period) were inserted after such period;(v)subsection (b)(1)(B) shall be applied as if (or a reduction in the amount expended under the State child health plan in the quarter for child health assistance or pregnancy-related assistance for purposes of section 2105 if the State has elected to apply this section to the State child health plan under title XXI) were inserted after 1903(a)(1); and(vi)paragraphs (2)(A)(i) and (3)(A)(ii) of subsection (c) shall each be applied as if (or, if the State has elected to apply this section to the State child health plan under title XXI, on or after the date this section first applies to the State) were inserted after December 31, 1990 each place it appears.

(b)

Conforming amendments

(1)Section 2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)) is amended—(A)by redesignating subparagraphs (D) through (S) as subparagraphs (E) through (T), respectively; and(B)by inserting after subparagraph (C) the following new subparagraph:

(D)Section 1902(a)(54) (relating to compliance with the requirements of section 1927 but only if the State has elected to apply such requirements to the State child health plan under this title).

(2)Section 2110(a)(6) of the Social Security Act (42 U.S.C. 1397jj(a)(6)) is amended by inserting and, if the State has elected to apply the requirements of section 1927 to the State child health plan under this title, covered outpatient drugs, as defined in section 1927(k)(2), after Prescription drugs and biologicals.