[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4204 Introduced in Senate (IS)]

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118th CONGRESS
  2d Session
                                S. 4204

  To amend title XIX of the Social Security Act to codify value-based 
purchasing arrangements under the Medicaid program and reforms related 
  to price reporting under such arrangements, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 30, 2024

 Mr. Mullin (for himself, Ms. Sinema, Mr. Scott of South Carolina, and 
  Ms. Hassan) 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 codify value-based 
purchasing arrangements under the Medicaid program and reforms related 
  to price reporting under such arrangements, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicaid VBPs for Patients Act'' or 
the ``MVP Act''.

SEC. 2. CODIFYING VALUE-BASED PURCHASING ARRANGEMENTS UNDER MEDICAID 
              AND REFORMS RELATED TO PRICE REPORTING UNDER SUCH 
              ARRANGEMENTS.

    (a) Codifying Multiple Best Price Points.--
            (1) In general.--Section 1927(c)(1)(C)(ii) of the Social 
        Security Act (42 U.S.C. 1396r-8(c)(1)(C)(ii)) is amended--
                    (A) in subclause (IV), by striking ``and'' at the 
                end;
                    (B) in subclause (V), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following new 
                subclause:
                                    ``(VI) may include multiple best 
                                price points for a single dosage form 
                                and strength of a drug of a 
                                manufacturer subject to a value-based 
                                purchasing arrangement (as defined in 
                                subsection (k)(12)), but only if such 
                                manufacturer offers such arrangement to 
                                all States.''.
            (2) Rule of construction.--Nothing in the amendments made 
        by this subsection may be construed to prohibit a manufacturer 
        from treating a value-based purchasing arrangement as a bundled 
        sale.
    (b) Definition of Average Manufacturer Price.--
            (1) In general.--Section 1927(k)(1) of the Social Security 
        Act (42 U.S.C. 1396r-8(k)(1)) is amended--
                    (A) in subparagraph (B)(i)--
                            (i) in subclause (VII), by striking at the 
                        end ``and'';
                            (ii) in subclause (VIII), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(IX) with respect to a covered 
                                outpatient drug that is sold under a 
                                value-based purchasing arrangement (as 
                                defined in paragraph (12)) during the 
                                rebate period, including such a drug 
                                that is an inhalation, infusion, 
                                instilled, implanted, or injectable 
                                drug that is not generally dispensed 
                                through a retail community pharmacy--
                                            ``(aa) a refund, rebate, 
                                        reimbursement, or free goods 
                                        from the manufacturer or third 
                                        party on behalf of the 
                                        manufacturer; or
                                            ``(bb) the withholding or 
                                        reduction of a payment to the 
                                        manufacturer or third party on 
                                        behalf of the manufacturer;
                                that is triggered by a patient who 
                                fails to achieve outcomes or measures 
                                defined under the terms of such value-
                                based purchasing arrangement during the 
                                period for which such arrangement is 
                                effective.''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(D) Special rule for certain value-based 
                purchasing arrangements.--For purposes of subparagraph 
                (A), in determining the average price paid to a 
                manufacturer for a covered outpatient drug that is sold 
                under a value-based purchasing arrangement (as defined 
                in paragraph (12)) that provides that payment for such 
                drug is made in installments over the course of such 
                arrangement, such price shall be determined as if the 
                aggregate price per the terms of the arrangement were 
                paid in full in the first installment during the rebate 
                period.''.
            (2) Rulemaking.--Not later than 180 days after the date of 
        the enactment of this Act, the Secretary of Health and Human 
        Services shall implement the amendments made by this subsection 
        through rulemaking.
    (c) Definition of Value-Based Purchasing Arrangement.--Section 
1927(k) of the Social Security Act (42 U.S.C. 1396r-8(k)) is amended by 
adding at the end the following paragraph:
            ``(12) Value-based purchasing arrangement.--The term 
        `value-based purchasing arrangement' has the meaning given such 
        term in section 447.502 of title 42, Code of Federal 
        Regulations (or any successor regulation).''.

SEC. 3. CALCULATION OF AVERAGE SALES PRICE UNDER MEDICARE.

    Section 1847A(c)(3) of the Social Security Act (42 U.S.C. 1395w-
3a(c)(3)) is amended--
            (1) by striking ``In calculating'' and inserting the 
        following:
                    ``(A) In general.--Subject to subparagraph (B), in 
                calculating''; and
            (2) by adding at the end the following new subparagraph:
                    ``(B) Certain remuneration under value-based 
                purchasing arrangements excluded.--In calculating the 
                manufacturer's average sales price under this 
                subsection for a drug or biological that is sold under 
                a value-based purchasing arrangement (as defined in 
                section 1927(k)(12)) and with respect to which the 
                manufacturer of such drug or biological has elected to 
                include multiple best price points (as described in 
                section 1927(c)(1)(C)(ii)(VI)) in reporting the best 
                price of such drug under section 1927(b), such 
                manufacturer's average sales price shall not include 
                any amount that is excluded from the calculation of the 
                average manufacturer price of such drug or biological 
                under section 1927(k)(1)(B)(i)(IX).''.

SEC. 4. GUIDANCE ON VALUE-BASED PURCHASING ARRANGEMENTS FOR INPATIENT 
              DRUGS UNDER MEDICAID.

    Not later than 180 days after the date of the enactment of this 
Act, the Secretary of Health and Human Services shall issue guidance to 
State Medicaid agencies on the option of entering into a value-based 
purchasing arrangement (as defined in section 1927(k)(12) of the Social 
Security Act (42 U.S.C. 1396r-8(k)(12))) with manufacturers for drugs 
or biological products provided as part of, or as incident to and in 
the same setting as, inpatient hospital services furnished under a 
State plan under title XIX of the Social Security Act (42 U.S.C. 1396 
et seq.), or under a waiver of such plan, where such drugs or 
biological products are reimbursed directly and not paid for as part of 
payment for such inpatient hospital services, including guidance on how 
multiple States may enter into agreements with one another and with 
manufacturers which permit the transfer of funds between the 
participating States so that individuals who reside in a State 
different from the State in which they receive a drug subject to a 
value-based purchasing arrangement as an inpatient may be treated as if 
they received such drug in the State in which they reside.

SEC. 5. EXCEPTION UNDER THE ANTIKICKBACK STATUTE.

    (a) In General.--Section 1128B(b)(3) of the Social Security Act (42 
U.S.C. 1320a-7b(b)(3)) is amended--
            (1) in subparagraph (J), by moving the left margin of such 
        subparagraph 2 ems to the left;
            (2) in subparagraph (K)--
                    (A) by moving the left margin of such subparagraph 
                2 ems to the left; and
                    (B) by striking ``and'' at the end;
            (3) in subparagraph (L)(iii), by striking the period and 
        inserting ``; and''; and
            (4) by adding at the end the following new subparagraph:
                    ``(M) any remuneration provided by a manufacturer 
                or third party on behalf of a manufacturer to a State 
                under a value-based purchasing arrangement (as defined 
                in section 1927(k)(12)) under a State plan under title 
                XIX (or waiver of such plan) in the case a patient 
                fails to achieve outcomes or measures defined in such 
                arrangement following the administration of a covered 
                outpatient drug (as defined in section 1927(k)(2)).''.
    (b) Rulemaking.--Not later than 180 days after the date of the 
enactment of this Act, the Inspector General of the Department of 
Health and Human Services shall through rulemaking implement the 
amendments made by this section.

SEC. 6. GAO STUDY AND REPORT ON USE OF VALUE-BASED PURCHASING 
              ARRANGEMENTS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study on the extent to which value-based purchasing 
arrangements (as defined in section 1927(k)(12)) of the Social Security 
Act (42 U.S.C. 1396r-8(k)(12)) facilitate patient access to covered 
outpatient drugs, improve patient outcomes, lower overall health system 
costs, and lower costs for patients in Federal health care programs. In 
conducting such study, the Comptroller General shall--
            (1) study the impact of this Act on--
                    (A) access to transformative therapies, including 
                rare disease gene therapies, generally;
                    (B) mitigating socioeconomic disparities in 
                accessing covered outpatient drugs sold under value-
                based purchasing arrangements through its requirement 
                that State Medicaid programs have access to the same 
                value-based purchasing arrangement pricing structure 
                that are available in the commercial market for such 
                drugs;
                    (C) the Medicaid drug rebate program under section 
                1927 of the Social Security Act (42 U.S.C. 1396r-8), 
                the 340B drug pricing program under section 340B of the 
                Public Health Service Act (42 U.S.C. 256b), and part B 
                of title XVIII of the Social Security Act (42 U.S.C. 
                1395j et seq.), including compliance with such 
                programs;
                    (D) expenditures under State Medicaid programs; and
                    (E) prices for such drugs under the Medicaid 
                program in States that do not enter into such 
                arrangements;
            (2) analyze all the types of value-based purchasing 
        arrangement pricing structures, which structures are working 
        well (as measured by price and ease of implementing), and which 
        need improvement; and
            (3) study the potential long-term savings for States that 
        enter into such arrangements under State Medicaid programs.
    (b) Report.--Not later than June 30, 2028, the Comptroller General 
of the United States shall submit to Congress a report containing the 
results of the study conducted under subsection (a).
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