[Congressional Record Volume 168, Number 133 (Saturday, August 6, 2022)]
[Senate]
[Pages S4361-S4376]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 5483. Mr. GRASSLEY submitted an amendment intended to be proposed
to amendment SA 5194 proposed by Mr. Schumer to the bill H.R. 5376, to
provide for reconciliation pursuant to title II of S. Con. Res. 14;
which was ordered to lie on the table; as follows:
At the end of title I, insert the following:
Subtitle E--Additional Proscription Drug Provisions
PART 1--MEDICARE
Subpart A--Part B
SEC. 14001. INCLUSION OF VALUE OF COUPONS IN DETERMINATION OF
AVERAGE SALES PRICE FOR DRUGS AND BIOLOGICALS
UNDER MEDICARE PART B.
Section 1847A(c) of the Social Security Act (42 U.S.C.
1395w-3a(c)) is amended--
(1) in paragraph (3)--
(A) by striking ``discounts.--In calculating'' and
inserting ``discounts to purchasers and coupons provided to
privately insured individuals.--
``(A) Discounts to purchasers.--In calculating''; and
(B) by adding at the end the following new subparagraph:
``(B) Coupons provided to reduce cost-sharing.--For
calendar quarters beginning on or after July 1, 2024, in
calculating the manufacturer's average sales price under this
subsection, such price shall include the value (as defined in
paragraph (6)(J)) of any coupons provided under a drug coupon
program of a manufacturer (as those terms are defined in
subparagraphs (K) and (L), respectively, of paragraph
(6)).''; and
(2) in paragraph (6), by adding at the end the following
new subparagraphs:
``(J) Value.--The term `value' means, with respect to a
coupon (as defined in subparagraph (K)), the difference, if
any, between--
``(i) the amount of any reduction or elimination of cost-
sharing or other out-of-pocket costs described in such
subparagraph to a patient as a result of the use of such
coupon; and
``(ii) any charge to the patient for the use of such
coupon.
``(K) Coupon.--The term `coupon' means any financial
support that is provided to a patient, either directly to the
patient or indirectly to the patient through a physician,
prescriber, pharmacy, or other provider, under a drug coupon
program of a manufacturer (as defined in subparagraph (L))
that is used to reduce or eliminate cost-sharing or other
out-of-pocket costs of the patient, including costs related
to a deductible, coinsurance, or copayment, with respect to a
drug or biological, including a biosimilar biological
product, of the manufacturer.
``(L) Drug coupon program.--
``(i) In general.--Subject to clause (ii), the term `drug
coupon program' means, with respect to a manufacturer, a
program through which the manufacturer provides coupons to
patients as described in subparagraph (K).
``(ii) Exclusions.--Such term does not include--
``(I) a patient assistance program operated by a
manufacturer that provides free or discounted drugs or
biologicals, including biosimilar biological products,
(through in-kind donations) to patients of low income; or
``(II) a contribution by a manufacturer to a nonprofit or
Foundation that provides free or discounted drugs or
biologicals, including biosimilar biological products,
(through in-kind donations) to patients of low income.''.
SEC. 14002. IMPROVEMENTS TO MEDICARE SITE-OF-SERVICE
TRANSPARENCY.
Section 1834(t) of the Social Security Act (42 U.S.C.
1395m(t)) is amended--
(1) in paragraph (1)--
(A) in the heading, by striking ``In general'' and
inserting ``Site payment'';
(B) in the matter preceding subparagraph (A)--
(i) by striking ``or to'' and inserting ``, to'';
(ii) by inserting ``, or to a physician for services
furnished in a physician's office'' after ``surgical
center''; and
[[Page S4362]]
(iii) by inserting ``(or 2024 with respect to a physician
for services furnished in a physician's office)'' after
``2018''; and
(C) in subparagraph (A)--
(i) by striking ``and the'' and inserting ``, the''; and
(ii) by inserting ``, and the physician fee schedule under
section 1848 (with respect to the practice expense component
of such payment amount)'' after ``such section'';
(2) by redesignating paragraphs (2) through (4) and
paragraphs (3) through (5), respectively; and
(3) by inserting after paragraph (1) the following new
paragraph:
``(2) Physician payment.--Beginning in 2024, the Secretary
may expand the information included on the Internet website
described in paragraph (1) to include--
``(A) the amount paid to a physician under section 1848 for
an item or service for the settings described in paragraph
(1); and
``(B) the estimated amount of beneficiary liability
applicable to the item or service.''.
SEC. 14003. HHS INSPECTOR GENERAL STUDY AND REPORT ON BONA
FIDE SERVICE FEES.
(a) Study.--The Inspector General of the Department of
Health and Human Services (in this section referred to as the
``Inspector General'') shall conduct a study on the effect of
the use of bona fide service fee contracting arrangements by
drug manufacturers and other entities on Medicare payments
for drugs and biologicals furnished under part B of title
XVIII of the Social Security Act (42 U.S.C. 1395j et seq.).
Such study shall include an analysis of--
(1) the various types of entities that enter into
contracting arrangements that use bona fide service fees,
such as group purchasing organizations, wholesalers,
providers, and pharmacies;
(2) the various types of bona fide service fee contracting
arrangements used by such entities;
(3) the types of services that are paid for through such
arrangements;
(4) whether manufacturers define bona fide service fees
differently across different entities;
(5) how such arrangements are structured;
(6) whether the structure or use of such arrangements has
changed over time;
(7) the extent, if any, to which there is consistency
across manufacturers in what they consider to be a bona fide
service fee as opposed to a discount or rebate that should be
excluded from the determination of average sales price
pursuant to the methodology under section 1847A of the Social
Security Act (42 U.S.C. 1395w-3a);
(8) the overall magnitude of bona fide service fees;
(9) what share of bona fide service fees are paid to
various entities;
(10) how the magnitude of bona fide service fees compares
to other fees and rebates that are included in the
determination of average sales price;
(11) whether and, if so, how much, the magnitude of bona
fide service fees has grown over time and how such growth
compares to growth in the magnitude of other fees and
rebates; and
(12) what share of bona fide service fees are based on a
percentage of sales.
(b) Report.--Not later than 18 months after the date of
enactment of this Act, the Inspector General shall submit to
Congress a report containing the results of the study
conducted under subsection (a), together with recommendations
for such legislation and administrative action as the
Inspector General determines appropriate.
SEC. 14004. ESTABLISHMENT OF MAXIMUM ADD-ON PAYMENT FOR DRUGS
AND BIOLOGICALS.
(a) In General.--Section 1847A of the Social Security Act
(42 U.S.C. 1395w-3a) is amended--
(1) in subsection (b)--
(A) in paragraph (1), in the matter preceding subparagraph
(A), by striking ``paragraph (7)'' and inserting ``paragraphs
(7) and (9)''; and
(B) by adding at the end the following new paragraph:
``(9) Maximum add-on payment amount.--
``(A) In general.--In determining the payment amount under
the provisions of subparagraph (A), (B), or (C) of paragraph
(1) of this subsection, subsection (c)(4)(A)(ii), or
subsection (d)(3)(C) for a drug or biological furnished on or
after January 1, 2024, if the applicable add-on payment (as
defined in subparagraph (B)) for each drug or biological on a
claim for a date of service exceeds the maximum add-on
payment amount specified under subparagraph (C) for the drug
or biological, then the payment amount otherwise determined
for the drug or biological under those provisions, as
applicable, shall be reduced by the amount of such excess.
``(B) Applicable add-on payment defined.--In this
paragraph, the term `applicable add-on payment' means the
following amounts, determined without regard to the
application of subparagraph (A):
``(i) In the case of a multiple source drug, an amount
equal to the difference between--
``(I) the amount that would otherwise be applied under
paragraph (1)(A); and
``(II) the amount that would be applied under such
paragraph if `100 percent' were substituted for `106
percent'.
``(ii) In the case of a single source drug or biological,
an amount equal to the difference between--
``(I) the amount that would otherwise be applied under
paragraph (1)(B); and
``(II) the amount that would be applied under such
paragraph if `100 percent' were substituted for `106
percent'.
``(iii) In the case of a biosimilar biological product, the
amount otherwise determined under paragraph (8)(B).
``(iv) In the case of a drug or biological during the
initial period described in subsection (c)(4)(A), an amount
equal to the difference between--
``(I) the amount that would otherwise be applied under
subsection (c)(4)(A)(ii); and
``(II) the amount that would be applied under such
subsection if `100 percent' were substituted, as applicable,
for--
``(aa) `103 percent' in subclause (I) of such subsection;
or
``(bb) any percent in excess of 100 percent applied under
subclause (II) of such subsection.
``(v) In the case of a drug or biological to which
subsection (d)(3)(C) applies, an amount equal to the
difference between--
``(I) the amount that would otherwise be applied under such
subsection; and
``(II) the amount that would be applied under such
subsection if `100 percent' were substituted, as applicable,
for--
``(aa) any percent in excess of 100 percent applied under
clause (i) of such subsection; or
``(bb) `103 percent' in clause (ii) of such subsection.
``(C) Maximum add-on payment amount specified.--For
purposes of subparagraph (A), the maximum add-on payment
amount specified in this subparagraph is--
``(i) for each of 2024 through 2031, $1,000; and
``(ii) for a subsequent year, the amount specified in this
subparagraph for the preceding year increased by the
percentage increase in the consumer price index for all urban
consumers (all items; United States city average) for the 12-
month period ending with June of the previous year.
Any amount determined under this subparagraph that is not a
multiple of $10 shall be rounded to the nearest multiple of
$10.''; and
(2) in subsection (c)(4)(A)(ii), by striking ``in the
case'' and inserting ``subject to subsection (b)(9), in the
case''.
(b) Conforming Amendments Relating to Separately Payable
Drugs.--
(1) OPPS.--Section 1833(t)(14) of the Social Security Act
(42 U.S.C. 1395l(t)(14)) is amended--
(A) in subparagraph (A)(iii)(II), by inserting ``, subject
to subparagraph (I)'' after ``are not available''; and
(B) by adding at the end the following new subparagraph:
``(I) Application of maximum add-on payment for separately
payable drugs and biologicals.--In establishing the amount of
payment under subparagraph (A) for a specified covered
outpatient drug that is furnished as part of a covered OPD
service (or group of services) on or after January 1, 2024,
if such payment is determined based on the average price for
the year established under section 1847A pursuant to clause
(iii)(II) of such subparagraph, the provisions of subsection
(b)(9) of section 1847A shall apply to the amount of payment
so established in the same manner as such provisions apply to
the amount of payment under section 1847A.''.
(2) ASC.--Section 1833(i)(2)(D) of the Social Security Act
(42 U.S.C. 1395l(i)(2)(D)) is amended--
(A) by moving clause (v) 6 ems to the left;
(B) by redesignating clause (vi) as clause (vii); and
(C) by inserting after clause (v) the following new clause:
``(vi) If there is a separate payment under the system
described in clause (i) for a drug or biological furnished on
or after January 1, 2024, the provisions of subsection
(t)(14)(I) shall apply to the establishment of the amount of
payment for the drug or biological under such system in the
same manner in which such provisions apply to the
establishment of the amount of payment under subsection
(t)(14)(A).''.
SEC. 14005. TREATMENT OF DRUG ADMINISTRATION SERVICES
FURNISHED BY CERTAIN EXCEPTED OFF-CAMPUS
OUTPATIENT DEPARTMENTS OF A PROVIDER.
Section 1833(t)(16) of the Social Security Act (42 U.S.C.
1395l(t)(16)) is amended by adding at the end the following
new subparagraph:
``(G) Special payment rule for drug administration services
furnished by an excepted department of a provider.--
``(i) In general.--In the case of a covered OPD service
that is a drug administration service (as defined by the
Secretary) furnished by a department of a provider described
in clause (ii) or (iv) of paragraph (21)(B), the payment
amount for such service furnished on or after January 1,
2024, shall be the same payment amount (as determined in
paragraph (21)(C)) that would apply if the drug
administration service was furnished by an off-campus
outpatient department of a provider (as defined in paragraph
(21)(B)).
``(ii) Application without regard to budget neutrality.--
The reductions made under this subparagraph--
``(I) shall not be considered an adjustment under paragraph
(2)(E); and
``(II) shall not be implemented in a budget neutral
manner.''.
SEC. 14006. GAO STUDY AND REPORT ON AVERAGE SALES PRICE.
(a) Study.--
(1) In general.--The Comptroller General of the United
States (in this section referred
[[Page S4363]]
to as the ``Comptroller General'') shall conduct a study on
spending for applicable drugs under part B of title XVIII of
the Social Security Act.
(2) Applicable drugs defined.--In this section, the term
``applicable drugs'' means drugs and biologicals--
(A) for which reimbursement under such part B is based on
the average sales price of the drug or biological; and
(B) that account for the largest percentage of total
spending on drugs and biologicals under such part B (as
determined by the Comptroller General, but in no case less
that 25 drugs or biologicals).
(3) Requirements.--The study under paragraph (1) shall
include an analysis of the following:
(A) The extent to which each applicable drug is paid for--
(i) under such part B for Medicare beneficiaries; or
(ii) by private payers in the commercial market.
(B) Any change in Medicare spending or Medicare beneficiary
cost-sharing that would occur if the average sales price of
an applicable drug was based solely on payments by private
payers in the commercial market.
(C) The extent to which drug manufacturers provide rebates,
discounts, or other price concessions to private payers in
the commercial market for applicable drugs, which the
manufacturer includes in its average sales price calculation,
for--
(i) formulary placement;
(ii) utilization management considerations; or
(iii) other purposes.
(D) Barriers to drug manufacturers providing such price
concessions for applicable drugs.
(E) Other areas determined appropriate by the Comptroller
General.
(b) Report.--Not later than 2 years after the date of the
enactment of this Act, the Comptroller General shall submit
to Congress a report on the study conducted under subsection
(a), together with recommendations for such legislation and
administrative action as the Secretary determines
appropriate.
SEC. 14007. AUTHORITY TO USE ALTERNATIVE PAYMENT FOR DRUGS
AND BIOLOGICALS TO PREVENT POTENTIAL DRUG
SHORTAGES.
(a) In General.--Section 1847A(e) of the Social Security
Act (42 U.S.C. 1395w-3a(e)) is amended--
(1) by striking ``Payment in Response to Public Health
Emergency.--In the case'' and inserting ``Payments.--
``(1) In response to public health emergency.--In the
case''; and
(2) by adding at the end the following new paragraph:
``(2) Preventing potential drug shortages.--
``(A) In general.--In the case of a drug or biological that
the Secretary determines is described in subparagraph (B) for
one or more quarters beginning on or after January 1, 2024,
the Secretary may use wholesale acquisition cost (or other
reasonable measure of a drug or biological price) instead of
the manufacturer's average sales price for such quarters and
for subsequent quarters until the end of the quarter in which
such drug or biological is removed from the drug shortage
list under section 506E of the Federal Food, Drug, and
Cosmetic Act, or in the case of a drug or biological
described in subparagraph (B)(ii), the date on which the
Secretary determines that the total manufacturing capacity or
the total number of manufacturers of such drug or biological
is sufficient to mitigate a potential shortage of the drug or
biological.
``(B) Drug or biological described.--For purposes of
subparagraph (A), a drug or biological described in this
subparagraph is a drug or biological--
``(i) that is listed on the drug shortage list maintained
by the Food and Drug Administration pursuant to section 506E
of the Federal Food, Drug, and Cosmetic Act, and with respect
to which any manufacturer of such drug or biological notifies
the Secretary of a permanent discontinuance or an
interruption that is likely to lead to a meaningful
disruption in the manufacturer's supply of that drug pursuant
to section 506C(a) of such Act; or
``(ii) that--
``(I) is described in section 506C(a) of such Act;
``(II) was listed on the drug shortage list maintained by
the Food and Drug Administration pursuant to section 506E of
such Act within the preceding 5 years; and
``(III) for which the total manufacturing capacity of all
manufacturers with an approved application for such drug or
biological that is currently marketed or total number of
manufacturers with an approved application for such drug or
biological that is currently marketed declines during a 6-
month period, as determined by the Secretary.
``(C) Provision of additional information.--For each
quarter in which the amount of payment for a drug or
biological described in subparagraph (B) pursuant to
subparagraph (A) exceeds the amount of payment for the drug
or biological otherwise applicable under this section, each
manufacturer of such drug or biological shall provide to the
Secretary information related to the potential cause or
causes of the shortage and the expected duration of the
shortage with respect to such drug.''.
(b) Tracking Shortage Drugs Through Claims.--The Secretary
of Health and Human Services (referred to in this section as
the ``Secretary'') shall establish a mechanism (such as a
modifier) for purposes of tracking utilization under title
XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) of
drugs and biologicals listed on the drug shortage list
maintained by the Food and Drug Administration pursuant to
section 506E of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 356e).
(c) HHS Report and Recommendations.--
(1) In general.--Not later than 18 months after the date of
the enactment of this Act, the Secretary shall submit to
Congress a report on shortages of drugs within the Medicare
program under title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.). The report shall include--
(A) an analysis of--
(i) the effect of drug shortages on Medicare beneficiary
access, quality, safety, and out-of-pocket costs;
(ii) the effect of drug shortages on health providers,
including hospitals and physicians, across the Medicare
program;
(iii) the current role of the Centers for Medicare &
Medicaid Services (CMS) in addressing drug shortages,
including CMS's working relationship and communication with
other Federal agencies and stakeholders;
(iv) the role of all actors in the drug supply chain
(including drug manufacturers, distributors, wholesalers,
secondary wholesalers, group purchasing organizations,
hospitals, and physicians) on drug shortages within the
Medicare program; and
(v) payment structures and incentives under parts A, B, C,
and D of the Medicare program and their effect, if any, on
drug shortages; and
(B) relevant findings and recommendations to Congress.
(2) Public availability.--The report under this subsection
shall be made available to the public.
(3) Consultation.--The Secretary shall consult with the
drug shortage task force authorized under section
506D(a)(1)(A) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 356d(a)(1)(A)) in preparing the report under this
subsection, as appropriate.
Subpart B--Part D
SEC. 14101. REQUIRING PHARMACY-NEGOTIATED PRICE CONCESSIONS,
PAYMENT, AND FEES TO BE INCLUDED IN NEGOTIATED
PRICES AT THE POINT-OF-SALE UNDER PART D OF THE
MEDICARE PROGRAM.
Section 1860D-2(d)(1)(B) of the Social Security Act (42
U.S.C. 1395w-102(d)(1)(B)) is amended--
(1) by striking ``prices.--For purposes'' and inserting
``prices.--
``(i) In general.--For purposes''; and
(2) by adding at the end the following new clause:
``(ii) Prices negotiated with pharmacy at point-of-sale.--
For plan years beginning on or after January 1, 2024, a
negotiated price for a covered part D drug described in
clause (i) shall be the approximate lowest possible
reimbursement for such drug negotiated with the pharmacy
dispensing such drug, and shall include all contingent and
noncontingent price concessions, payments, and fees
negotiated with such pharmacy, but shall not include positive
incentive payments paid or to be paid to such pharmacy. Such
negotiated price shall be provided at the point-of-sale of
such drug.''.
SEC. 14102. PUBLIC DISCLOSURE OF DRUG DISCOUNTS AND OTHER
PHARMACY BENEFIT MANAGER (PBM) PROVISIONS.
(a) Public Disclosure of Drug Discounts.--
(1) In general.--Section 1150A of the Social Security Act
(42 U.S.C. 1320b-23) is amended--
(A) in subsection (c), in the matter preceding paragraph
(1), by striking ``this section'' and inserting ``subsection
(b)(1)''; and
(B) by adding at the end the following new subsection:
``(e) Public Availability of Certain Information.--
``(1) In general.--Subject to paragraphs (2) and (3), in
order to allow patients and employers to compare PBMs'
ability to negotiate rebates, discounts, and price
concessions and the amount of such rebates, discounts, and
price concessions that are passed through to plan sponsors,
not later than July 1, 2024, the Secretary shall make
available on the Internet website of the Department of Health
and Human Services the information provided to the Secretary
and described in paragraphs (2) and (3) of subsection (b)
with respect to each PBM.
``(2) Lag in data.--The information made available in a
plan year under paragraph (1) shall not include information
with respect to such plan year or the two preceding plan
years.
``(3) Confidentiality.--The Secretary shall ensure that
such information is displayed in a manner that prevents the
disclosure of information on rebates, discounts, and price
concessions with respect to an individual drug or an
individual PDP sponsor, MA organization, or qualified health
benefits plan.''.
(2) Effective date.--The amendment made by paragraph (1)(A)
shall take effect on January 1, 2024.
(b) Plan Audit of Pharmacy Benefit Manager Data.--Section
1860D-2(d)(3) of the Social Security Act (42 U.S.C. 1395w-
102(d)(3)) is amended--
[[Page S4364]]
(1) by striking ``Audits.--To protect'' and inserting the
following: ``Audits.--
``(A) Audits of plans by the secretary.--To protect''; and
(2) by adding at the end the following new subparagraph:
``(B) Audits of pharmacy benefit managers by pdp sponsors
and ma organizations.--
``(i) In general.--Beginning January 1, 2024, in order to
ensure that--
``(I) contracting terms between a PDP sponsor offering a
prescription drug plan or an MA organization offering an MA-
PD plan and its contracted or owned pharmacy benefit manager
are met; and
``(II) the PDP sponsor and MA organization can account for
the cost of each covered part D drug net of all direct and
indirect remuneration;
the PDP sponsor or MA organization shall conduct financial
audits.
``(ii) Independent third party.--An audit described in
clause (i) shall--
``(I) be conducted by an independent third party; and
``(II) account and reconcile flows of funds that determine
the net cost of covered part D drugs, including direct and
indirect remuneration from drug manufacturers and pharmacies
or provided to pharmacies.
``(iii) Rebate agreements.--A PDP sponsor and an MA
organization shall require pharmacy benefit managers to make
rebate contracts with drug manufacturers made on their behalf
available under audits described in clause (i).
``(iv) Confidentiality agreements.--Audits described in
clause (i) shall be subject to confidentiality agreements to
prevent, except as required under clause (vii), the
redisclosure of data transmitted under the audit.
``(v) Frequency.--A financial audit under clause (i) shall
be conducted periodically (but in no case less frequently
than once every 2 years).
``(vi) Timeframe for pbm to provide information.--A PDP
sponsor and an MA organization shall require that a pharmacy
benefit manager that is being audited under clause (i)
provide (as part of their contracting agreement) the
requested information to the independent third party
conducting the audit within 45 days of the date of the
request.
``(vii) Submission of audit reports to the secretary.--
``(I) In general.--A PDP sponsor and an MA organization
shall submit to the Secretary the final report on any audit
conducted under clause (i) within 30 days of the PDP sponsor
or MA organization receiving the report from the independent
third party conducting the audit.
``(II) Review.--The Secretary shall review final reports
submitted under clause (i) to determine the extent to which
the goals specified in subclauses (I) and (II) of
subparagraph (B)(i) are met.
``(III) Confidentiality.--Notwithstanding any other
provision of law, information disclosed in a report submitted
under clause (i) related to the net cost of a covered part D
drug is confidential and shall not be disclosed by the
Secretary or a Medicare contractor.
``(viii) Notice of noncompliance.--A PDP sponsor and an MA
organization shall notify the Secretary if any pharmacy
benefit manager is not complying with requests for access to
information required under an audit under clause (i).
``(ix) Civil monetary penalties.--
``(I) In general.--Subject to subclause (II), if the
Secretary determines that a PDP sponsor or an MA organization
has failed to conduct an audit under clause (i), the
Secretary may impose a civil monetary penalty of not more
than $10,000 for each day of such noncompliance.
``(II) Procedure.--The provisions of section 1128A, other
than subsections (a) and (b) and the first sentence of
subsection (c)(1) of such section, shall apply to civil
monetary penalties under this clause in the same manner as
such provisions apply to a penalty or proceeding under
section 1128A.''.
(c) Disclosure to Pharmacy of Post-Point-of-Sale Pharmacy
Price Concessions and Incentive Payments.--Section 1860D-
2(d)(2) of the Social Security Act (42 U.S.C. 1395w-
102(d)(2)) is amended--
(1) by striking ``Disclosure.--A PDP sponsor'' and
inserting the following: ``Disclosure.--
``(A) To the secretary.--A PDP sponsor''; and
(2) by adding at the end the following new subparagraph:
``(B) To pharmacies.--
``(i) In general.--For plan year 2024 and subsequent plan
years, a PDP sponsor offering a prescription drug plan and an
MA organization offering an MA-PD plan shall report any
pharmacy price concession or incentive payment that occurs
with respect to a pharmacy after payment for covered part D
drugs at the point-of-sale, including by an intermediary
organization with which a PDP sponsor or MA organization has
contracted, to the pharmacy.
``(ii) Timing.--The reporting of price concessions and
incentive payments to a pharmacy under clause (i) shall be
made on a periodic basis (but in no case less frequently than
annually).
``(iii) Claim level.--The reporting of price concessions
and incentive payments to a pharmacy under clause (i) shall
be at the claim level or approximated at the claim level if
the price concession or incentive payment was applied at a
level other than at the claim level.''.
(d) Disclosure of P&T Committee Conflicts of Interest.--
(1) In general.--Section 1860D-4(b)(3)(A) of the Social
Security Act (42 U.S.C. 1395w-104(b)(3)(A)) is amended by
adding at the end the following new clause:
``(iii) Disclosure of conflicts of interest.--With respect
to plan year 2024 and subsequent plan years, a PDP sponsor of
a prescription drug plan and an MA organization offering an
MA-PD plan shall, as part of its bid submission under section
1860D-11(b), provide the Secretary with a completed statement
of financial conflicts of interest, including with
manufacturers, from each member of any pharmacy and
therapeutic committee used by the sponsor or organization
pursuant to this paragraph.''.
(2) Inclusion in bid.--Section 1860D-11(b)(2) of the Social
Security Act (42 U.S.C. 1395w-111(b)(2)) is amended--
(A) by redesignating subparagraph (F) as subparagraph (G);
and
(B) by inserting after subparagraph (E) the following new
subparagraph:
``(F) P&T committee conflicts of interest.--The information
required to be disclosed under section 1860D-
4(b)(3)(A)(iii).''.
(e) Information on Direct and Indirect Remuneration
Required To Be Included in Bid.--Section 1860D-11(b) of the
Social Security Act (42 U.S.C. 1395w-111(b)) is amended--
(1) in paragraph (1), by adding at the end the following
new sentence: ``With respect to actual amounts of direct and
indirect remuneration submitted pursuant to clause (v) of
paragraph (2), such amounts shall be consistent with data
reported to the Secretary in a prior year.''; and
(2) in paragraph (2)(C)--
(A) in clause (iii), by striking ``and'' at the end;
(B) in clause (iv), by striking the period at the end and
inserting the following: ``, and, with respect to plan year
2024 and subsequent plan years, actual and projected
administrative expenses assumed in the bid, categorized by
the type of such expense, including actual and projected
price concessions retained by a pharmacy benefit manager;
and''; and
(C) by adding at the end the following new clause:
``(v) with respect to plan year 2024 and subsequent plan
years, actual and projected direct and indirect remuneration,
categorized as received from each of the following:
``(I) A pharmacy.
``(II) A manufacturer.
``(III) A pharmacy benefit manager.
``(IV) Other entities, as determined by the Secretary.''.
SEC. 14103. PUBLIC DISCLOSURE OF DIRECT AND INDIRECT
REMUNERATION REVIEW AND AUDIT RESULTS.
Section 1860D-42 of the Social Security Act (42 U.S.C.
1395w-152) is amended by adding at the end the following new
subsection:
``(e) Public Disclosure of Direct and Indirect Remuneration
Review and Financial Audit Results.--
``(1) Direct and indirect remuneration review results.--
``(A) In general.--Except as provided in subparagraph (B),
in 2023 and each subsequent year, the Secretary shall make
available to the public on the Internet website of the
Centers for Medicare & Medicaid Services information on
discrepancies related to summary and detailed direct and
indirect remuneration reports submitted by PDP sponsors
pursuant to section 1860D-15 across all prescription drug
plans based on the most recent data available. Information
made available under this subparagraph shall include the
following:
``(i) The number of potential discrepancies in summary and
detailed direct and indirect remuneration identified by the
Secretary for PDP sponsors to review.
``(ii) The extent to which PDP sponsors resubmitted summary
direct and indirect remuneration reports to make changes for
previous contract years.
``(iii) The extent to which resubmitted summary direct and
indirect remuneration reports resulted in an increase or
decrease in direct and indirect remuneration in a previous
contract year.
``(B) Exclusion of certain submissions in calculation.--The
Secretary shall exclude any information in direct and
indirect remuneration reports submitted with respect to PACE
programs under section 1894 (pursuant to section 1860D-21(f))
and qualified retiree prescription drug plans (as defined in
section 1860D-22(a)(2)) from the information that is made
available to the public under subparagraph (A).
``(2) Financial audit results.--In 2023 and each subsequent
year, the Secretary shall make available to the public on the
Internet website of the Centers for Medicare & Medicaid
Services data on the results of financial audits required
under section 1860D-12(b)(3)(C). Information made available
under this paragraph shall include the following:
``(A) With respect to a year, the number of PDP sponsors
that received each of the following (or successor
categories), with an indication of the number that pertain to
direct and indirect remuneration:
``(i) A notice of observations or findings.
``(ii) An unqualified audit opinion that renders the audit
closed.
``(iii) A qualified audit opinion that requires the sponsor
to submit a corrective action plan to the Secretary.
[[Page S4365]]
``(iv) An adverse opinion, with a description of the types
of actions that the Secretary takes when issuing an adverse
opinion.
``(v) A disclaimed opinion.
``(B) With respect to a year, the number of PDP sponsors--
``(i) that reopened a previously closed reconciliation as a
result of an audit, indicating those that pertain to direct
and indirect remuneration changes; and
``(ii) for which the Secretary recouped a payment or made a
payment as a result of a reopening of a previously closed
reconciliation, indicating when such recoupment or payment
pertains to direct and indirect remuneration.
``(3) No identification of specific pdp sponsors.--The
information to be made available on the Internet website of
the Centers for Medicare & Medicaid Services described in
paragraph (1) and paragraph (2) shall not identity the
specific PDP sponsor to which any determination or action
pertains.
``(4) Definition of direct and indirect remuneration.--For
purposes of this subsection, the term `direct and indirect
remuneration' means direct and indirect remuneration as
described in section 423.308 of title 42, Code of Federal
Regulations, or any successor regulation.''.
SEC. 14104. IMPROVEMENTS TO PROVISION OF PARTS A AND B CLAIMS
DATA TO PRESCRIPTION DRUG PLANS.
(a) Data Use.--
(1) In general.--Paragraph (6) of section 1860D-4(c) of the
Social Security Act (42 U.S.C. 1395w-104(c)), as added by
section 50354 of division E of the Bipartisan Budget Act of
2018 (Public Law 115-123), relating to providing prescription
drug plans with parts A and B claims data to promote the
appropriate use of medications and improve health outcomes,
is amended--
(A) in subparagraph (B)--
(i) by redesignating clauses (i), (ii), and (iii) as
subclauses (I), (II), and (III), respectively, and moving
such subclauses 2 ems to the right;
(ii) by striking ``Purposes.--A PDP sponsor'' and inserting
Purposes--
``(i) In general.--A PDP sponsor.''; and
(iii) by adding at the end the following new clause:
``(ii) Clarification.--The limitation on data use under
subparagraph (C)(i) shall not apply to the extent that the
PDP sponsor is using the data provided to carry out any of
the purposes described in clause (i).''; and
(B) in subparagraph (C)(i), by striking ``To inform'' and
inserting ``Subject to subparagraph (B)(ii), to inform''.
(2) Effective date.--The amendments made by this subsection
shall apply to plan years beginning on or after January 1,
2024.
(b) Manner of Provision.--Subparagraph (D) of such
paragraph (6) is amended--
(1) by striking ``described.--The data described in this
clause'' and inserting ``described.--
``(i) In general.--The data described in this
subparagraph''; and
(2) by adding at the end the following new clause:
``(ii) Manner of provision.--
``(I) In general.--Such data may be provided pursuant to
this paragraph in the same manner as data under the Part D
Enhanced Medication Therapy Management model tested under
section 1115A, through Application Programming Interface, or
in another manner as determined by the Secretary.
``(II) Implementation.--Notwithstanding any other provision
of law, the Secretary may implement this clause by program
instruction or otherwise.''.
(c) Technical Correction.--Such paragraph (6) is
redesignated as paragraph (7).
SEC. 14105. PROHIBITING BRANDING ON PART D BENEFIT CARDS.
(a) In General.--Section 1851(j)(2)(B) of the Social
Security Act (42 U.S.C. 1395w-21(j)(2)(B)) is amended by
striking ``co-branded network provider'' and inserting ``co-
branded, co-owned, or affiliated network provider, pharmacy,
or pharmacy benefit manager''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to plan years beginning on or after January 1,
2024.
SEC. 14106. REQUIRING PRESCRIPTION DRUG PLANS AND MA-PD PLANS
TO REPORT POTENTIAL FRAUD, WASTE, AND ABUSE TO
THE SECRETARY OF HHS.
Section 1860D-4 of the Social Security Act (42 U.S.C.
1395w-104) is amended by adding at the end the following new
subsection:
``(p) Reporting Potential Fraud, Waste, and Abuse.--
Beginning January 1, 2023, the PDP sponsor of a prescription
drug plan shall report to the Secretary, as specified by the
Secretary--
``(1) any substantiated or suspicious activities (as
defined by the Secretary) with respect to the program under
this part as it relates to fraud, waste, and abuse; and
``(2) any steps made by the PDP sponsor after identifying
such activities to take corrective actions.''.
SEC. 14107. ESTABLISHMENT OF PHARMACY QUALITY MEASURES UNDER
MEDICARE PART D.
Section 1860D-4(c) of the Social Security Act (42 U.S.C.
1395w-104(c)), as amended by this Act, is amended by adding
at the end the following new paragraph:
``(8) Application of pharmacy quality measures.--
``(A) In general.--A PDP sponsor that makes incentive
payments to a pharmacy or receives price concessions paid by
a pharmacy based on quality measures shall, for the purposes
of such incentive payments or price concessions with respect
to covered part D drugs dispensed by such pharmacy, only use
measures--
``(i) established or adopted by the Secretary under
subparagraph (B), as listed under clause (ii) of such
subparagraph; and
``(ii) that are relevant to the performance of such
pharmacy with respect to areas that the pharmacy can impact.
``(B) Standard pharmacy quality measures.--
``(i) In general.--Notwithstanding any other provision of
law, the Secretary shall establish or adopt quality measures
from one or more multi-stakeholder, consensus organizations
to be used by a PDP sponsor for the purposes of determining
incentive payments and price concessions described in
subparagraph (A). Such measures shall be evidence-based and
focus on pharmacy performance on patient health outcomes and
other areas, as determined by the Secretary, that the
pharmacy can impact.
``(ii) Maintenance of list.--The Secretary shall maintain a
single list of measures established or adopted under this
subparagraph.
``(C) Effective date.--The requirement under subparagraph
(A) shall take effect for plan years beginning on January 1,
2024, or such earlier date specified by the Secretary if the
Secretary determines there are sufficient measures
established or adopted under subparagraph (B) for the
purposes of the requirement under subparagraph (A).''.
SEC. 14108. ADDITION OF NEW MEASURES BASED ON ACCESS TO
BIOSIMILAR BIOLOGICAL PRODUCTS TO THE 5-STAR
RATING SYSTEM UNDER MEDICARE ADVANTAGE.
(a) In General.--Section 1853(o)(4) of the Social Security
Act (42 U.S.C. 1395w-23(o)(4)) is amended by adding at the
end the following new subparagraph:
``(E) Addition of new measures based on access to
biosimilar biological products.--
``(i) In general.--For 2028 and subsequent years, the
Secretary shall add a new set of measures to the 5-star
rating system based on access to biosimilar biological
products covered under part B and, in the case of MA-PD
plans, such products that are covered part D drugs. Such
measures shall assess the impact a plan's benefit structure
may have on enrollees' utilization of or ability to access
biosimilar biological products, including in comparison to
the reference biological product, and shall include measures,
as applicable, with respect to the following:
``(I) Coverage.--Assessing whether a biosimilar biological
product is on the plan formulary in lieu of or in addition to
the reference biological product.
``(II) Preferencing.--Assessing tier placement or cost-
sharing for a biosimilar biological product relative to the
reference biological product.
``(III) Utilization management tools.--Assessing whether
and how utilization management tools are used with respect to
a biosimilar biological product relative to the reference
biological product.
``(IV) Utilization.--Assessing the percentage of enrollees
prescribed the biosimilar biological product and the
percentage of enrollees prescribed the reference biological
product when the reference biological product is also on the
plan formulary.
``(ii) Definitions.--In this subparagraph, the terms
`biosimilar biological product' and `reference biological
product' have the meaning given those terms in section
1847A(c)(6).
``(iii) Protecting patient interests.--In developing such
measures, the Secretary shall ensure that each measure
developed to address coverage, preferencing, or utilization
management is constructed such that patients retain access to
appropriate therapeutic options without undue administrative
burden.''.
(b) Clarification Regarding Application to Prescription
Drug Plans.--To the extent the Secretary of Health and Human
Services applies the 5-star rating system under section
1853(o)(4) of the Social Security Act (42 U.S.C. 1395w-
23(o)(4)), or a similar system, to prescription drug plans
under part D of title XVIII of such Act, the provisions of
subparagraph (E) of such section, as added by subsection (a)
of this section, shall apply under the system with respect to
such plans in the same manner as such provisions apply to the
5-star rating system under such section 1853(o)(4).
SEC. 14109. FAIRNESS IN THE CALCULATION OF THE PART D
PREMIUM.
(a) In General.--Section 1860D-13(a) of the Social Security
Act (42 U.S.C. 1395w-113(a)) is amended--
(1) in paragraph (3)(A), by striking ``25.5 percent'' and
inserting ``the applicable percent (as specified in paragraph
(8))''; and
(2) by adding at the end the following new paragraph:
``(8) Applicable percent.--For purposes of paragraph
(3)(A), the applicable percent specified in this paragraph
is--
``(A) for years prior to 2024, 25.5 percent; and
``(B) for 2024 and subsequent years, 24.5 percent.''.
(b) Conforming Amendments.--
(1) Subsidy.--Section 1860D-15(a) of the Social Security
Act (42 U.S.C. 1395w-115(a)) is
[[Page S4366]]
amended, in the matter preceding paragraph (1), by inserting
``(or, for 2022 and subsequent years, 75.5 percent)'' after
``74.5 percent''.
(2) Fallback area monthly beneficiary premium.--Section
1860D-11(g)(6) of the Social Security Act (42 U.S.C. 1395w-
111(g)(6)) is amended by striking ``25.5 percent'' and
inserting ``the applicable percent (as specified in section
1860D-13(a)(8))''.
(3) Income-related monthly adjustment amount (irmaa).--
Section 1860D-13(a)(7)(B)(i)(II) of the Social Security Act
(42 U.S.C. 1395w-113(a)(7)(B)(i)(II)) is amended by striking
``25.5 percent'' and inserting ``the applicable percent (as
specified in paragraph (8))''.
SEC. 14110. HHS STUDY AND REPORT ON THE INFLUENCE OF
PHARMACEUTICAL MANUFACTURER THIRD-PARTY
REIMBURSEMENT HUBS ON HEALTH CARE PROVIDERS WHO
PRESCRIBE THEIR DRUGS AND BIOLOGICALS.
(a) Study.--
(1) In general.--The Secretary of Health and Human Services
(in this section referred to as the ``Secretary'') shall
conduct a study on the influence of pharmaceutical
manufacturer distribution models that provide third-party
reimbursement hub services on health care providers who
prescribe the manufacturer's drugs and biologicals, including
for Medicare part D beneficiaries.
(2) Requirements.--The study under paragraph (1) shall
include an analysis of the following:
(A) The influence of pharmaceutical manufacturer
distribution models that provide third-party reimbursement
hub services to health care providers who prescribe the
manufacturer's drugs and biologicals, including--
(i) the operations of pharmaceutical manufacturer
distribution models that provide reimbursement hub services
for health care providers who prescribe the manufacturer's
products;
(ii) Federal laws affecting these pharmaceutical
manufacturer distribution models; and
(iii) whether hub services could improperly incentivize
health care providers to deem a drug or biological as
medically necessary under section 423.578 of title 42, Code
of Federal Regulations.
(B) Other areas determined appropriate by the Secretary.
(b) Report.--Not later than July 1, 2024, the Secretary
shall submit to Congress a report on the study conducted
under subsection (a), together with recommendations for such
legislation and administrative action as the Secretary
determines appropriate.
(c) Consultation.--In conducting the study under subsection
(a) and preparing the report under subsection (b), the
Secretary shall consult with the Attorney General.
Subpart C--Miscellaneous
SEC. 14201. DRUG MANUFACTURER PRICE TRANSPARENCY.
Title XI of the Social Security Act (42 U.S.C. 1301 et
seq.) is amended by inserting after section 1128K the
following new section:
``SEC. 1128L. DRUG MANUFACTURER PRICE TRANSPARENCY.
``(a) In General.--
``(1) Determinations.--Beginning July 1, 2024, the
Secretary shall make determinations as to whether a drug is
an applicable drug as described in subsection (b).
``(2) Required justification.--If the Secretary determines
under paragraph (1) that an applicable drug is described in
subsection (b), the manufacturer of the applicable drug shall
submit to the Secretary the justification described in
subsection (c) in accordance with the timing described in
subsection (d).
``(b) Applicable Drug Described.--
``(1) In general.--An applicable drug is described in this
subsection if it meets any of the following at the time of
the determination:
``(A) Large increase.--The drug (per dose)--
``(i) has a wholesale acquisition cost of at least $10; and
``(ii) had an increase in the wholesale acquisition cost,
with respect to determinations made--
``(I) during 2022, of at least 100 percent since the date
of the enactment of this section;
``(II) during 2023, of at least 100 percent in the
preceding 12 months or of at least 150 percent in the
preceding 24 months;
``(III) during 2024, of at least 100 percent in the
preceding 12 months or of at least 200 percent in the
preceding 36 months;
``(IV) during 2025, of at least 100 percent in the
preceding 12 months or of at least 250 percent in the
preceding 48 months; or
``(V) on or after January 1, 2026, of at least 100 percent
in the preceding 12 months or of at least 300 percent in the
preceding 60 months.
``(B) High spending with increase.--The drug--
``(i) was in the top 50th percentile of net spending under
title XVIII or XIX (to the extent data is available) during
any 12-month period in the preceding 60 months; and
``(ii) per dose, had an increase in the wholesale
acquisition cost, with respect to determinations made--
``(I) during 2022, of at least 15 percent since the date of
the enactment of this section;
``(II) during 2023, of at least 15 percent in the preceding
12 months or of at least 20 percent in the preceding 24
months;
``(III) during 2024, of at least 15 percent in the
preceding 12 months or of at least 30 percent in the
preceding 36 months;
``(IV) during 2025, of at least 15 percent in the preceding
12 months or of at least 40 percent in the preceding 48
months; or
``(V) on or after January 1, 2026, of at least 15 percent
in the preceding 12 months or of at least 50 percent in the
preceding 60 months.
``(C) High launch price for new drugs.--In the case of a
drug that is marketed for the first time on or after January
1, 2022, and for which the manufacturer has established the
first wholesale acquisition cost on or after such date, such
wholesale acquisition cost for a year's supply or a course of
treatment for such drug exceeds the gross spending for
covered part D drugs at which the annual out-of-pocket
threshold under section 1860D-2(b)(4)(B) would be met for the
year.
``(2) Special rules.--
``(A) Authority of secretary to substitute percentages
within a de minimis range.--For purposes of applying
paragraph (1), the Secretary may substitute for each
percentage described in subparagraph (A) or (B) of such
paragraph (other than the percentile described subparagraph
(B)(i) of such paragraph) a percentage within a de minimis
range specified by the Secretary below the percentage so
described.
``(B) Drugs with high launch prices annually report until a
therapeutic equivalent is available.--In the case of a drug
that the Secretary determines is an applicable drug described
in subparagraph (C) of paragraph (1), such drug shall remain
described in such subparagraph (C) (and the manufacturer of
such drug shall annually report the justification under
subsection (c)(2)) until the Secretary determines that there
is a therapeutic equivalent (as defined in section 314.3 of
title 21, Code of Federal Regulations, or any successor
regulation) for such drug.
``(3) Dose.--For purposes of applying paragraph (1), the
Secretary shall establish a definition of the term `dose'.
``(c) Justification Described.--
``(1) Increase in wac.--In the case of a drug that the
Secretary determines is an applicable drug described in
subparagraph (A) or (B) of subsection (b)(1), the
justification described in this subsection is all relevant,
truthful, and nonmisleading information and supporting
documentation necessary to justify the increase in the
wholesale acquisition cost of the applicable drug of the
manufacturer, as determined appropriate by the Secretary and
which may include the following:
``(A) The individual factors that have contributed to the
increase in the wholesale acquisition cost.
``(B) An explanation of the role of each factor in
contributing to such increase.
``(C) Total expenditures of the manufacturer on--
``(i) materials and manufacturing for such drug;
``(ii) acquiring patents and licensing for each drug of the
manufacturer; and
``(iii) costs to purchase or acquire the drug from another
company, if applicable.
``(D) The percentage of total expenditures of the
manufacturer on research and development for such drug that
was derived from Federal funds.
``(E) The total expenditures of the manufacturer on
research and development for such drug.
``(F) The total revenue and net profit generated from the
applicable drug for each calendar year since drug approval.
``(G) The total expenditures of the manufacturer that are
associated with marketing and advertising for the applicable
drug.
``(H) Additional information specific to the manufacturer
of the applicable drug, such as--
``(i) the total revenue and net profit of the manufacturer
for the period of such increase, as determined by the
Secretary;
``(ii) metrics used to determine executive compensation;
``(iii) any additional information related to drug pricing
decisions of the manufacturer, such as total expenditures
on--
``(I) drug research and development; or
``(II) clinical trials on drugs that failed to receive
approval by the Food and Drug Administration.
``(2) High launch price.--In the case of a drug that the
Secretary determines is an applicable drug described in
subparagraph (C) of subsection (b)(1), the justification
described in this subsection is all relevant, truthful, and
nonmisleading information and supporting documentation
necessary to justify the wholesale acquisition cost of the
applicable drug of the manufacturer, as determined by the
Secretary and which may include the items described in
subparagraph (C) through (H) of paragraph (1).
``(d) Timing.--
``(1) Notification.--Not later than 60 days after the date
on which the Secretary makes the determination that a drug is
an applicable drug under subsection (b), the Secretary shall
notify the manufacturer of the applicable drug of such
determination.
``(2) Submission of justification.--Not later than 180 days
after the date on which a manufacturer receives a
notification under paragraph (1), the manufacturer shall
submit to the Secretary the justification required under
subsection (a).
``(3) Posting on internet website.--
``(A) In general.--Subject to subparagraph (B), not later
than 30 days after receiving the justification under
paragraph (2), the Secretary shall post on the Internet
website of
[[Page S4367]]
the Centers for Medicare & Medicaid Services the
justification, together with a summary of such justification
that is written and formatted using language that is easily
understandable by beneficiaries under titles XVIII and XIX.
``(B) Exclusion of proprietary information.--The Secretary
shall exclude proprietary information, such as trade secrets
and intellectual property, submitted by the manufacturer in
the justification under paragraph (2) from the posting
described in subparagraph (A).
``(e) Exception to Requirement for Submission.--In the case
of a drug that the Secretary determines is an applicable drug
described in subparagraph (A) or (B) of subsection (b)(1),
the requirement to submit a justification under subsection
(a) shall not apply where the manufacturer, after receiving
the notification under subsection (d)(1) with respect to the
applicable drug of the manufacturer, reduces the wholesale
acquisition cost of a drug so that it no longer is described
in such subparagraph (A) or (B) for at least a 4-month
period, as determined by the Secretary.
``(f) Penalties.--
``(1) Failure to submit timely justification.--If the
Secretary determines that a manufacturer has failed to submit
a justification as required under this section, including in
accordance with the timing and form required, with respect to
an applicable drug, the Secretary shall apply a civil
monetary penalty in an amount of $10,000 for each day the
manufacturer has failed to submit such justification as so
required.
``(2) False information.--Any manufacturer that submits a
justification under this section and knowingly provides false
information in such justification is subject to a civil
monetary penalty in an amount not to exceed $100,000 for each
item of false information.
``(3) Application of procedures.--The provisions of section
1128A (other than subsections (a) and (b)) shall apply to a
civil monetary penalty under this subsection in the same
manner as such provisions apply to a penalty or proceeding
under section 1128A(a). Civil monetary penalties imposed
under this subsection are in addition to other penalties as
may be prescribed by law.
``(g) Definitions.--In this section:
``(1) Drug.--The term `drug' means a drug, as defined in
section 201(g) of the Federal Food, Drug, and Cosmetic Act,
that is intended for human use and subject to section
503(b)(1) of such Act, including a product licensed under
section 351 of the Public health Service Act.
``(2) Manufacturer.--The term `manufacturer' has the
meaning given that term in section 1847A(c)(6)(A).
``(3) Wholesale acquisition cost.--The term `wholesale
acquisition cost' has the meaning given that term in section
1847A(c)(6)(B).''.
SEC. 14202. STRENGTHENING AND EXPANDING PHARMACY BENEFIT
MANAGERS TRANSPARENCY REQUIREMENTS.
Section 1150A of the Social Security Act (42 U.S.C. 1320b-
23), as amended by this Act, is amended--
(1) in subsection (a)--
(A) in paragraph (1), by striking ``or'' at the end;
(B) in paragraph (2), by striking the comma at the end and
inserting ``; or''; and
(C) by inserting after paragraph (2) the following new
paragraph:
``(3) a State plan under title XIX, including a managed
care entity (as defined in section 1932(a)(1)(B)),'';
(2) in subsection (b)--
(A) in paragraph (2)--
(i) by striking ``(excluding bona fide'' and all that
follows through ``patient education programs))''; and
(ii) by striking ``aggregate amount of'' and inserting
``aggregate amount and percentage of'';
(B) in paragraph (3), by striking ``aggregate amount of''
and inserting ``aggregate amount and percentage (defined as a
share of gross drug costs) of''; and
(C) by adding at the end the following new paragraph:
``(4) The aggregate amount of bona fide service fees (which
include distribution service fees, inventory management fees,
product stocking allowances, and fees associated with
administrative services agreements and patient care programs
(such as medication compliance programs and patient education
programs)) the PBM received from--
``(A) PDP sponsors;
``(B) qualified health benefit plans;
``(C) managed care entities (as defined in section
1932(a)(1)(b)); and
``(D) drug manufacturers.'';
(3) in subsection (c), by adding at the end the following
new paragraphs:
``(5) To States to carry out their administration and
oversight of the State plan under title XIX.
``(6) To the Federal Trade Commission to carry out section
5(a) of the Federal Trade Commission Act (15 U.S.C. 45a) and
any other relevant consumer protection or antitrust
authorities enforced by such Commission, including reviewing
proposed mergers in the prescription drug sector.
``(7) To assist the Department of Justice to carry out its
antitrust authorities, including reviewing proposed mergers
in the prescription drug sector.''; and
(4) by adding at the end the following new subsection:
``(f) Annual OIG Evaluation and Report.--
``(1) Analysis.--The Inspector General of the Department of
Health and Human Services shall conduct an annual evaluation
of the information provided to the Secretary under this
section. Such evaluation shall include an analysis of--
``(A) PBM rebates;
``(B) administrative fees;
``(C) the difference between what plans pay PBMs and what
PBMs pay pharmacies;
``(D) generic dispensing rates; and
``(E) other areas determined appropriate by the Inspector
General.
``(2) Report.--Not later than July 1, 2023, and annually
thereafter, the Inspector General of the Department of Health
and Human Services shall submit to Congress a report
containing the results of the evaluation conducted under
paragraph (1), together with recommendations for such
legislation and administrative action as the Inspector
General determines appropriate. Such report shall not
disclose the identity of a specific PBM, plan, or price
charged for a drug.''.
SEC. 14203. PRESCRIPTION DRUG PRICING DASHBOARDS.
Part A of title XI of the Social Security Act is amended by
adding at the end the following new section:
``SEC. 1150D. PRESCRIPTION DRUG PRICING DASHBOARDS.
``(a) In General.--Beginning not later than January 1,
2023, the Secretary shall establish, and annually update,
internet website-based dashboards, through which
beneficiaries, clinicians, researchers, and the public can
review information on spending for, and utilization of,
prescription drugs and biologicals (and related supplies and
mechanisms of delivery) covered under each of parts B and D
of title XVIII and under a State program under title XIX,
including information on trends of such spending and
utilization over time.
``(b) Medicare Part B Drug and Biological Dashboard.--
``(1) In general.--The dashboard established under
subsection (a) for part B of title XVIII shall provide the
information described in paragraph (2).
``(2) Information described.--The information described in
this paragraph is the following information with respect to
drug or biologicals covered under such part B:
``(A) The brand name and, if applicable, the generic names
of the drug or biological.
``(B) Consumer-friendly information on the uses and
clinical indications of the drug or biological.
``(C) The manufacturer or labeler of the drug or
biological.
``(D) To the extent feasible, the following information:
``(i) Average total spending per dosage unit of the drug or
biological in the most recent 2 calendar years for which data
is available.
``(ii) The percentage change in average spending on the
drug or biological per dosage unit between the most recent
calendar year for which data is available and--
``(I) the preceding calendar year; and
``(II) the preceding 5 and 10 calendar years.
``(iii) The annual growth rate in average spending per
dosage unit of the drug or biological in the most recent 5 or
10 calendar years for which data is available.
``(iv) Total spending for the drug or biological for the
most recent calendar year for which data is available.
``(v) The number of beneficiaries receiving the drug or
biological in the most recent calendar year for which data is
available.
``(vi) Average spending on the drug per beneficiary for the
most recent calendar year for which data is available.
``(E) The average sales price of the drug or biological (as
determined under section 1847A) for the most recent quarter.
``(F) Consumer-friendly information about the coinsurance
amount for the drug or biological for beneficiaries for the
most recent quarter. Such information shall not include
coinsurance amounts for qualified medicare beneficiaries (as
defined in section 1905(p)(1)).
``(G) For the most recent calendar year for which data is
available--
``(i) the 15 drugs and biologicals with the highest total
spending under such part; and
``(ii) any drug or biological for which the average annual
per beneficiary spending exceeds the gross spending for
covered part D drugs at which the annual out-of-pocket
threshold under section 1860D-2(b)(4)(B) would be met for the
year.
``(H) Other information (not otherwise prohibited in law
from being disclosed) that the Secretary determines would
provide beneficiaries, clinicians, researchers, and the
public with helpful information about drug and biological
spending and utilization (including trends of such spending
and utilization).
``(c) Medicare Covered Part D Drug Dashboard.--
``(1) In general.--The dashboard established under
subsection (a) for part D of title XVIII shall provide the
information described in paragraph (2).
``(2) Information described.--The information described in
this paragraph is the following information with respect to
covered part D drugs under such part D:
``(A) The information described in subparagraphs (A)
through (D) of subsection (b)(2).
``(B) Information on average annual beneficiary out-of-
pocket costs below and above the annual out-of-pocket
threshold under section 1860D-2(b)(4)(B) for the current plan
year. Such information shall not include
[[Page S4368]]
out-of-pocket costs for subsidy eligible individuals under
section 1860D-14.
``(C) Information on how to access resources as described
in sections 1860D-1(c) and 1851(d).
``(D) For the most recent calendar year for which data is
available--
``(i) the 15 covered part D drugs with the highest total
spending under such part; and
``(ii) any covered part D drug for which the average annual
per beneficiary spending exceeds the gross spending for
covered part D drugs at which the annual out-of-pocket
threshold under section 1860D-2(b)(4)(B) would be met for the
year.
``(E) Other information (not otherwise prohibited in law
from being disclosed) that the Secretary determines would
provide beneficiaries, clinicians, researchers, and the
public with helpful information about covered part D drug
spending and utilization (including trends of such spending
and utilization).
``(d) Medicaid Covered Outpatient Drug Dashboard.--
``(1) In general.--The dashboard established under
subsection (a) for title XIX shall provide the information
described in paragraph (2).
``(2) Information described.--The information described in
this paragraph is the following information with respect to
covered outpatient drugs under such title:
``(A) The information described in subparagraphs (A)
through (D) of subsection (b)(2).
``(B) For the most recent calendar year for which data is
available, the 15 covered outpatient drugs with the highest
total spending under such title.
``(C) Other information (not otherwise prohibited in law
from being disclosed) that the Secretary determines would
provide beneficiaries, clinicians, researchers, and the
public with helpful information about covered outpatient drug
spending and utilization (including trends of such spending
and utilization).
``(e) Data Files.--The Secretary shall make available the
underlying data for each dashboard established under
subsection (a) in a machine-readable format.''.
SEC. 14204. IMPROVING COORDINATION BETWEEN THE FOOD AND DRUG
ADMINISTRATION AND THE CENTERS FOR MEDICARE &
MEDICAID SERVICES.
(a) In General.--
(1) Public meeting.--
(A) In general.--Not later than 12 months after the date of
the enactment of this Act, the Secretary of Health and Human
Services (referred to in this section as the ``Secretary'')
shall convene a public meeting for the purposes of discussing
and providing input on improvements to coordination between
the Food and Drug Administration and the Centers for Medicare
& Medicaid Services in preparing for the availability of
novel medical products described in subsection (c) on the
market in the United States.
(B) Attendees.--The Secretary shall invite the following to
the public meeting:
(i) Representatives of relevant Federal agencies, including
representatives from each of the medical product centers
within the Food and Drug Administration and representatives
from the coding, coverage, and payment offices within the
Centers for Medicare & Medicaid Services.
(ii) Stakeholders with expertise in the research and
development of novel medical products, including
manufacturers of such products.
(iii) Representatives of commercial health insurance
payers.
(iv) Stakeholders with expertise in the administration and
use of novel medical products, including physicians.
(v) Stakeholders representing patients and with expertise
in the utilization of patient experience data in medical
product development.
(C) Topics.--The public meeting agenda shall include--
(i) an overview of the types of products and product
categories in the drug and medical device development
pipeline and the volume of products which may meet the
description of a novel medical product under subsection (c);
(ii) the anticipated expertise necessary to review the
safety and effectiveness of such products at the Food and
Drug Administration and current gaps in such expertise, if
any;
(iii) the expertise necessary to make coding, coverage, and
payment decisions with respect to such products within the
Centers for Medicare & Medicaid Services, and current gaps in
such expertise, if any;
(iv) trends in the differences in the data necessary to
determine the safety and effectiveness of a novel medical
product and the data necessary to determine whether a novel
medical product meets the reasonable and necessary
requirements for coverage and payment under title XVIII of
the Social Security Act pursuant to section 1862(a)(1)(A) of
such Act (42 U.S.C. 1395y(a)(1)(A));
(v) the availability of information for sponsors of such
novel medical products to meet each of those requirements;
and
(vi) the coordination of information related to significant
clinical improvement over existing therapies for patients
between the Food and Drug Administration and the Centers for
Medicare & Medicaid Services with respect to novel medical
products.
(D) Trade secrets and confidential information.--Nothing
under this section shall be construed as authorizing the
Secretary to disclose any information that is a trade secret
or confidential information subject to section 552(b)(4) of
title 5, United States Code.
(2) Improving transparency of criteria for medicare
coverage.--
(A) Draft guidance.--Not later than 18 months after the
public meeting under paragraph (1), the Secretary shall
update the final guidance titled ``National Coverage
Determinations with Data Collection as a Condition of
Coverage: Coverage with Evidence Development'' to address any
opportunities to improve the availability and coordination of
information as described in clauses (iv) through (vi) of
paragraph (1)(C).
(B) Final guidance.--Not later than 12 months after issuing
draft guidance under subparagraph (A), the Secretary shall
finalize the updated guidance to address any such
opportunities.
(b) Report on Coding, Coverage, and Payment Processes Under
Medicare for Novel Medical Products.--Not later than 12
months after the date of the enactment of this Act, the
Secretary shall publish a report on the Internet website of
the Department of Health and Human Services regarding
processes under the Medicare program under title XVIII of the
Social Security Act (42 U.S.C. 1395 et seq.) with respect to
the coding, coverage, and payment of novel medical products
described in subsection (c). Such report shall include the
following:
(1) A description of challenges in the coding, coverage,
and payment processes under the Medicare program for novel
medical products.
(2) Recommendations to--
(A) incorporate patient experience data (such as the impact
of a disease or condition on the lives of patients and
patient treatment preferences) into the coverage and payment
processes within the Centers for Medicare & Medicaid
Services;
(B) decrease the length of time to make national and local
coverage determinations under the Medicare program (as those
terms are defined in subparagraphs (A) and (B), respectively,
of section 1862(l)(6) of the Social Security Act (42 U.S.C.
1395y(l)(6));
(C) streamline the coverage process under the Medicare
program and incorporate input from relevant stakeholders into
such coverage determinations; and
(D) identify potential mechanisms to incorporate novel
payment designs similar to those in development in commercial
insurance plans and State plans under title XIX of such Act
(42 U.S.C. 1396 et seq.) into the Medicare program.
(c) Novel Medical Products Described.--For purposes of this
section, a novel medical product described in this subsection
is a drug, including a biological product (including gene and
cell therapy), or medical device, that has been designated as
a breakthrough therapy under section 506(a) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 356(a)), a
breakthrough device under section 515B of such Act (21 U.S.C.
360e-3), or a regenerative advanced therapy under section
506(g) of such Act (21 U.S.C. 356(g)).
SEC. 14205. PATIENT CONSULTATION IN MEDICARE NATIONAL AND
LOCAL COVERAGE DETERMINATIONS IN ORDER TO
MITIGATE BARRIERS TO INCLUSION OF SUCH
PERSPECTIVES.
Section 1862(l) of the Social Security Act (42 U.S.C.
1395y(l)) is amended by adding at the end the following new
paragraph:
``(7) Patient consultation in national and local coverage
determinations.--With respect to national coverage
determinations, the Secretary, and with respect to local
coverage determinations, the Medicare administrative
contractor, may consult with patients and organizations
representing patients, including patients with disabilities,
in making national and local coverage determinations.''.
SEC. 14206. GAO STUDY ON INCREASES TO MEDICARE AND MEDICAID
SPENDING DUE TO COPAYMENT COUPONS AND OTHER
PATIENT ASSISTANCE PROGRAMS.
(a) Study.--The Comptroller General of the United States
shall conduct a study on the impact of copayment coupons and
other patient assistance programs on prescription drug
pricing and expenditures within the Medicare and Medicaid
programs. The study shall assess the following:
(1) The extent to which copayment coupons and other patient
assistance programs contribute to inflated prescription drug
prices under such programs.
(2) The impact copayment coupons and other patient
assistance programs have in the Medicare Part D program
established under part D of title XVIII of the Social
Security Act (42 U.S.C. 1395w-101 et seq.) on utilization of
higher-cost brand drugs and lower utilization of generic
drugs in that program.
(3) The extent to which manufacturers report or obtain tax
benefits, including deductions of business expenses and
charitable contributions, for any of the following:
(A) Offering copayment coupons or other patient assistance
programs.
(B) Sponsoring manufacturer patient assistance programs.
(C) Paying for sponsorships at outreach and advocacy events
organized by patient assistance programs.
(4) The efficacy of oversight conducted to ensure that
independent charity patient assistance programs adhere to
guidance from the Office of the Inspector General of the
Department of Health and Human Services on avoiding waste,
fraud, and abuse.
(b) Definitions.--In this section:
[[Page S4369]]
(1) Independent charity patient assistance program.--The
term ``independent charity patient assistance program'' means
any organization described in section 501(c)(3) of the
Internal Revenue Code of 1986 and exempt from taxation under
section 501(a) of such Code and which is not a private
foundation (as defined in section 509(a) of such Code) that
offers patient assistance.
(2) Manufacturer.--The term ``manufacturer'' has the
meaning given that term in section 1927(k)(5) of the Social
Security Act (42 U.S.C. 1396r-8(k)(5)).
(3) Manufacturer patient assistance program.--The term
``manufacturer patient assistance program'' means an
organization, including a private foundation (as so defined),
that is sponsored by, or receives funding from, a
manufacturer and that offers patient assistance. Such term
does not include an independent charity patient assistance
program.
(4) Patient assistance.--The term ``patient assistance''
means assistance provided to offset the cost of drugs for
individuals. Such term includes free products, coupons,
rebates, copay or discount cards, and other means of
providing assistance to individuals related to drug costs, as
determined by the Secretary of Health and Human Services.
(c) Report.--Not later than 24 months after the date of the
enactment of this Act, the Comptroller General of the United
States shall submit to Congress a report describing the
findings of the study required under subsection (a).
SEC. 14207. MEDPAC REPORT ON SHIFTING COVERAGE OF CERTAIN
MEDICARE PART B DRUGS TO MEDICARE PART D.
(a) Study.--The Medicare Payment Advisory Commission (in
this section referred to as the ``Commission'') shall conduct
a study on shifting coverage of certain drugs and biologicals
for which payment is currently made under part B of title
XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) to
part D of such title (42 U.S.C. 1395w-21 et seq.). Such study
shall include an analysis of--
(1) differences in program structures and payment methods
for drugs and biologicals covered under such parts B and D,
including effects of such a shift on program spending,
beneficiary cost-sharing liability, and utilization
management techniques for such drugs and biologicals; and
(2) the feasibility and policy implications of shifting
coverage of drugs and biologicals for which payment is
currently made under such part B to such part D.
(b) Report.--
(1) In general.--Not later than June 30, 2023, the
Commission shall submit to Congress a report containing the
results of the study conducted under subsection (a).
(2) Contents.--The report under paragraph (1) shall include
information, and recommendations as the Commission deems
appropriate, regarding--
(A) formulary design under such part D;
(B) the ability of the benefit structure under such part D
to control total spending on drugs and biologicals for which
payment is currently made under such part B;
(C) changes to the bid process under such part D, if any,
that may be necessary to integrate coverage of such drugs and
biologicals into such part D; and
(D) any other changes to the program that Congress should
consider in determining whether to shift coverage of such
drugs and biologicals from such part B to such part D.
SEC. 14208. TAKING STEPS TO FULFILL TREATY OBLIGATIONS TO
TRIBAL COMMUNITIES.
(a) GAO Study.--The Comptroller General shall conduct a
study regarding access to, and the cost of, prescription
drugs among Indians. The study shall include--
(1) a review of what Indian health programs pay for
prescription drugs on reservations, in urban centers, and in
Tribal communities relative to other consumers;
(2) recommendations to align the value of prescription drug
discounts available under the Medicaid drug rebate program
established under section 1927 of the Social Security Act (42
U.S.C. 1396r-8) with prescription drug discounts available to
Tribal communities through the purchased/referred care
program of the Indian Health Service for physician
administered drugs; and
(3) an examination of how Tribal communities and urban
Indian organizations utilize the Medicare part D program
established under title XVIII of the Social Security Act (42
U.S.C. 1395w-101 et seq.) and recommendations to improve
enrollment among Indians in that program.
(b) Report.--Not later than 18 months after the date of the
enactment of this Act, the Comptroller General shall submit
to Congress a report containing the results of the study
conducted under subsection (a), together with recommendations
for such legislation and administrative action as the
Comptroller General determines appropriate.
(c) Definitions.--In this section:
(1) Comptroller general.--The term ``Comptroller General''
means the Comptroller General of the United States.
(2) Indian; indian health program; indian tribe.--The terms
``Indian'', ``Indian health program'', and ``Indian tribe''
have the meanings given those terms in section 4 of the
Indian Health Care Improvement Act (25 U.S.C. 1603).
PART 2--MEDICAID DRUG PRICING REFORMS
SEC. 14301. MEDICAID PHARMACY AND THERAPEUTICS COMMITTEE
IMPROVEMENTS.
(a) In General.--Subparagraph (A) of section 1927(d)(4) of
the Social Security Act (42 U.S.C. 1396r-8(d)(4)) is amended
to read as follows:
``(A)(i) The formulary is developed and reviewed by a
pharmacy and therapeutics committee consisting of physicians,
pharmacists, and other appropriate individuals appointed by
the Governor of the State.
``(ii) Subject to clause (vi), the State establishes and
implements a conflict of interest policy for the pharmacy and
therapeutics committee that--
``(I) is publicly accessible;
``(II) requires all committee members to complete, on at
least an annual basis, a disclosure of relationships,
associations, and financial dealings that may affect their
independence of judgement in committee matters; and
``(III) contains clear processes, such as recusal from
voting or discussion, for those members who report a conflict
of interest, along with appropriate processes to address any
instance where a member fails to report a conflict of
interest.
``(iii) The membership of the pharmacy and therapeutics
committee--
``(I) is made publicly available;
``(II) is composed of members who are independent and free
of any conflict, including with respect to manufacturers,
medicaid managed care entities, and pharmacy benefit
managers; and
``(III) includes at least 1 actively practicing physician
and at least 1 actively practicing pharmacist, each of whom
has expertise in the care of 1 or more Medicaid-specific
populations such as elderly or disabled individuals, children
with complex medical needs, or low-income individuals with
chronic illnesses.
``(iv) At the option of the State, the State's drug use
review board established under subsection (g)(3) may serve as
the pharmacy and therapeutics committee provided the State
ensures that such board meets the requirements of clauses
(ii) and (iii).
``(v) The State reviews and has final approval of the
formulary established by the pharmacy and therapeutics
committee.
``(vi) If the Secretary determines it appropriate or
necessary based on the findings and recommendations of the
Comptroller General of the United States in the report
submitted to Congress under section 203 of the Prescription
Drug Pricing Reduction Act of 2022, the Secretary shall issue
guidance that States must follow for establishing conflict of
interest policies for the pharmacy and therapeutics committee
in accordance with the requirements of clause (ii), including
appropriate standards and requirements for identifying,
addressing, and reporting on conflicts of interest.''.
(b) Application to Medicaid Managed Care Organizations.--
(1) In general.--Clause (xiii) of section 1903(m)(2)(A) of
the Social Security Act (42 U.S.C. 1396b(m)(2)(A)) is
amended--
(A) by striking ``and (III)'' and inserting ``(III)'';
(B) by striking the period at the end and inserting ``, and
(IV) any formulary used by the entity for covered outpatient
drugs dispensed to individuals eligible for medical
assistance who are enrolled with the entity is developed and
reviewed by a pharmacy and therapeutics committee that meets
the requirements of clauses (ii) and (iii) of section
1927(d)(4)(A).''; and
(C) by moving the left margin 2 ems to the left.
(2) Application to pihps and pahps.--Section 1903(m) of the
Social Security Act (42 U.S.C. 1396b(m)) is amended by adding
at the end the following new paragraph:
``(10) No payment shall be made under this title to a State
with respect to expenditures incurred by the State for
payment for services provided by an other specified entity
(as defined in paragraph (9)(D)(iii)) unless such services
are provided in accordance with a contract between the State
and the entity which satisfies the requirements of paragraph
(2)(A)(xiii).''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date that is 1 year after the date
of enactment of this Act.
SEC. 14302. IMPROVING REPORTING REQUIREMENTS AND DEVELOPING
STANDARDS FOR THE USE OF DRUG USE REVIEW BOARDS
IN STATE MEDICAID PROGRAMS.
(a) In General.--Section 1927(g)(3) of the Social Security
Act (42 U.S.C. 1396r-8(g)(3)) is amended--
(1) by amending subparagraph (B) to read as follows:
``(B) Membership.--
``(i) In general.--The membership of the DUR Board shall
include health care professionals who have recognized
knowledge and expertise in one or more of the following:
``(I) The clinically appropriate prescribing of covered
outpatient drugs.
``(II) The clinically appropriate dispensing and monitoring
of covered outpatient drugs.
``(III) Drug use review, evaluation, and intervention.
``(IV) Medical quality assurance.
``(ii) Membership requirements.--The membership of the DUR
Board shall--
``(I) be made publicly available;
``(II) be composed of members who are independent and free
of any conflict, including with respect to manufacturers,
medicaid managed care entities, and pharmacy benefit
managers;
[[Page S4370]]
``(III) be made up of at least \1/3\ but no more than 51
percent members who are licensed and actively practicing
physicians and at least \1/3\ members who are licensed and
actively practicing pharmacists; and
``(IV) include at least 1 actively practicing physician and
at least 1 actively practicing pharmacist, each of whom has
expertise in the care of 1 or more Medicaid-specific
populations such as elderly or disabled individuals, children
with complex medical needs, or low-income individuals with
chronic illnesses.
``(iii) Conflict of interest policy.--The State shall
establish and implement a conflict of interest policy for the
DUR Board that--
``(I) is publicly accessible;
``(II) requires all board members to complete, on at least
an annual basis, a disclosure of relationships, associations,
and financial dealings that may affect their independence of
judgement in board matters; and
``(III) contains clear processes, such as recusal from
voting or discussion, for those members who report a conflict
of interest, along with appropriate processes to address any
instance where a member fails to report a conflict of
interest.''; and
(2) by adding at the end the following new subparagraph:
``(E) DUR board membership reports.--
``(i) DUR board reports.--Each State shall require the DUR
Board to prepare and submit to the State an annual report on
the DUR Board membership. Each such report shall include any
conflicts of interest with respect to members of the DUR
Board that the DUR Board recorded or was aware of during the
period that is the subject of the report, and the process
applied to address such conflicts of interest, in addition to
any other information required by the State.
``(ii) Inclusion of dur board membership information in
state reports.--Each annual State report to the Secretary
required under subparagraph (D) shall include--
``(I) the number of individuals serving on the State's DUR
Board;
``(II) the names and professions of the individuals serving
on such DUR Board;
``(III) any conflicts of interest or recusals with respect
to members of such DUR Board reported by the DUR Board or
that the State was aware of during the period that is the
subject of the report; and
``(IV) whether the State has elected for such DUR Board to
serve as the committee responsible for developing a State
formulary under subsection (d)(4)(A).''.
(b) Managed Care Requirements.--Section 1932(i) of the
Social Security Act (42 U.S.C. 1396u-2(i)) is amended--
(1) by inserting ``and each contract under a State plan
with an other specified entity (as defined in section
1903(m)(9)(D)(iii))'' after ``under section 1903(m)'';
(2) by striking ``section 483.3(s)(4)'' and inserting
``section 438.3(s)(4)'';
(3) by striking ``483.3(s)(5)'' and inserting
``438.3(s)(5)''; and
(4) by adding at the end the following: ``Such a managed
care entity or other specified entity shall not be considered
to be in compliance with the requirement of such section
438.3(s)(5) that the entity provide a detailed description of
its drug utilization review activities unless the entity
includes a description of the prospective drug review
activities described in paragraph (2)(A) of section 1927(g)
and the activities listed in paragraph (3)(C) of section
1927(g), makes the underlying drug utilization review data
available to the State and the Secretary, and provides such
other information as deemed appropriate by the Secretary.''.
(c) Development of National Standards for Medicaid Drug Use
Review.--The Secretary of Health and Human Services may
promulgate regulations or guidance establishing national
standards for Medicaid drug use review programs under section
1927(g) of the Social Security Act (42 U.S.C. 1396r-8(g)) and
drug utilization review activities and requirements under
section 1932(i) of such Act (42 U.S.C. 1396u-2(i)), for the
purpose of aligning review criteria for prospective and
retrospective drug use review across all State Medicaid
programs.
(d) CMS Guidance.--Not later than 18 months after the date
of enactment of this Act, the Secretary of Health and Human
Services shall issue guidance--
(1) outlining steps that States must take to come into
compliance with statutory and regulatory requirements for
prospective and retrospective drug use review under section
1927(g) of the Social Security Act (42 U.S.C. 1396r-8(g)) and
drug utilization review activities and requirements under
section 1932(i) of such Act (42 U.S.C. 1396u-2(i)) (including
with respect to requirements that were in effect before the
date of enactment of this Act); and
(2) describing the actions that the Secretary will take to
enforce such requirements.
(e) Effective Date.--The amendments made by this section
shall take effect on the date that is 18 months after the
date of enactment of this Act.
SEC. 14303. GAO REPORT ON CONFLICTS OF INTEREST IN STATE
MEDICAID PROGRAM DRUG USE REVIEW BOARDS AND
PHARMACY AND THERAPEUTICS (P&T) COMMITTEES.
(a) Investigation.--The Comptroller General of the United
States shall conduct an investigation of potential or
existing conflicts of interest among members of State
Medicaid program State drug use review boards (in this
section referred to as ``DUR Boards'') and pharmacy and
therapeutics committees (in this section referred to as ``P&T
Committees'').
(b) Report.--Not later than 24 months after the date of
enactment of this Act, the Comptroller General shall submit
to Congress a report on the investigation conducted under
subsection (a) that includes the following:
(1) A description outlining how DUR Boards and P&T
Committees operate in States, including details with respect
to--
(A) the structure and operation of DUR Boards and statewide
P&T Committees;
(B) States that operate separate P&T Committees for their
fee-for-service Medicaid program and their Medicaid managed
care organizations or other Medicaid managed care
arrangements (including other specified entities (as defined
in section 1903(m)(9)(D)(iii) of the Social Security Act (42
U.S.C. 1396b(m)(9)(D)(iii)) and collectively referred to in
this section as ``Medicaid MCOs''); and
(C) States that allow Medicaid MCOs to have their own P&T
Committees and the extent to which pharmacy benefit managers
administer or participate in such P&T Committees.
(2) A description outlining the differences between DUR
Boards established in accordance with section 1927(g)(3) of
the Social Security Act (42 U.S.C. 1396r(g)(3)) and P&T
Committees.
(3) A description outlining the tools P&T Committees may
use to determine Medicaid drug coverage and utilization
management policies.
(4) An analysis of whether and how States or P&T Committees
establish participation and independence requirements for DUR
Boards and P&T Committees, including with respect to entities
with connections with drug manufacturers, State Medicaid
programs, managed care organizations, and other entities or
individuals in the pharmaceutical industry.
(5) A description outlining how States, DUR Boards, or P&T
Committees define conflicts of interest.
(6) A description of how DUR Boards and P&T Committees
address conflicts of interest, including who is responsible
for implementing such policies.
(7) A description of the tools, if any, States use to
ensure that there are no conflicts of interest on DUR Boards
and P&T Committees.
(8) An analysis of the effectiveness of tools States use to
ensure that there are no conflicts of interest on DUR Boards
and P&T Committees and, if applicable, recommendations as to
how such tools could be improved.
(9) A review of strategies States may use to guard against
conflicts of interest on DUR Boards and P&T Committees and to
ensure compliance with the requirements of titles XI and XIX
of the Social Security Act (42 U.S.C. 1301 et seq., 1396 et
seq.) and access to effective, clinically appropriate, and
medically necessary drug treatments for Medicaid
beneficiaries, including recommendations for such legislative
and administrative actions as the Comptroller General
determines appropriate.
SEC. 14304. ENSURING THE ACCURACY OF MANUFACTURER PRICE AND
DRUG PRODUCT INFORMATION UNDER THE MEDICAID
DRUG REBATE PROGRAM.
(a) Audit of Manufacturer Price and Drug Product
Information.--
(1) In general.--Subparagraph (B) of section 1927(b)(3) of
the Social Security Act (42 U.S.C. 1396r-8(b)(3)) is amended
to read as follows:
``(B) Audits and surveys of manufacturer price and drug
product information.--
``(i) Audits.--The Secretary shall conduct regular audits
of the price and drug product information reported by
manufacturers under subparagraph (A) for the most recently
ended rebate period to ensure the accuracy and timeliness of
such information. In conducting such audits, the Secretary
may employ evaluations, surveys, statistical sampling,
predictive analytics and other relevant tools and methods.
``(ii) Verifications surveys of average manufacturer price
and manufacturer's average sales price.--In addition to the
audits required under clause (i), the Secretary may survey
wholesalers and manufacturers (including manufacturers that
directly distribute their covered outpatient drugs (in this
subparagraph referred to as `direct sellers')), when
necessary, to verify manufacturer prices and manufacturer's
average sales prices (including wholesale acquisition cost)
to make payment reported under subparagraph (A).
``(iii) Penalties.--In addition to other penalties as may
be prescribed by law, including under subparagraph (C) of
this paragraph, the Secretary may impose a civil monetary
penalty in an amount not to exceed $185,000 on an annual
basis on a wholesaler, manufacturer, or direct seller, if the
wholesaler, manufacturer, or direct seller of a covered
outpatient drug refuses a request for information about
charges or prices by the Secretary in connection with an
audit or survey under this subparagraph or knowingly provides
false information. The provisions of section 1128A (other
than subsections (a) (with respect to amounts of penalties or
additional assessments) and (b)) shall apply to a civil money
penalty under this clause in the same manner as such
provisions apply to a penalty or proceeding under section
1128A(a).
``(iv) Reports.--
[[Page S4371]]
``(I) Report to congress.--The Secretary shall, not later
than 18 months after date of enactment of this subparagraph,
submit a report to the Committee on Energy and Commerce of
the House of Representatives and the Committee on Finance of
the Senate regarding additional regulatory or statutory
changes that may be required in order to ensure accurate and
timely reporting and oversight of manufacturer price and drug
product information, including whether changes should be made
to reasonable assumption requirements to ensure such
assumptions are reasonable and accurate or whether another
methodology for ensuring accurate and timely reporting of
price and drug product information should be considered to
ensure the integrity of the drug rebate program under this
section.
``(II) Annual reports.--The Secretary shall, on at least an
annual basis, submit a report to the Committee on Energy and
Commerce of the House of Representatives and the Committee on
Finance of the Senate summarizing the results of the audits
and surveys conducted under this subparagraph during the
period that is the subject of the report.
``(III) Content.--Each report submitted under subclause
(II) shall, with respect to the period that is the subject of
the report, include summaries of--
``(aa) error rates in the price, drug product, and other
relevant information supplied by manufacturers under
subparagraph (A);
``(bb) the timeliness with which manufacturers,
wholesalers, and direct sellers provide information required
under subparagraph (A) or under clause (i) or (ii) of this
subparagraph;
``(cc) the number of manufacturers, wholesalers, and direct
sellers and drug products audited under this subparagraph;
``(dd) the types of price and drug product information
reviewed under the audits conducted under this subparagraph;
``(ee) the tools and methodologies employed in such audits;
``(ff) the findings of such audits, including which
manufacturers, if any, were penalized under this
subparagraph; and
``(gg) such other relevant information as the Secretary
shall deem appropriate.
``(IV) Protection of information.--In preparing a report
required under subclause (II), the Secretary shall redact
such proprietary information as the Secretary determines
appropriate to prevent disclosure of, and to safeguard, such
information.
``(v) Appropriations.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated to the
Secretary $2,000,000 for fiscal year 2022 and each fiscal
year thereafter to carry out this subparagraph.''.
(2) Effective date.--The amendments made by this subsection
shall take effect on the first day of the first fiscal
quarter that begins after the date of enactment of this Act.
(b) Increased Penalties for Noncompliance With Reporting
Requirements.--
(1) Increased penalty for failure to provide timely
information.--Section 1927(b)(3)(C)(i) of the Social Security
Act (42 U.S.C. 1396r-8(b)(3)(C)(i)) is amended by striking
``increased by $10,000 for each day in which such information
has not been provided and such amount shall be paid to the
Treasury'' and inserting ``, for each covered outpatient drug
with respect to which such information is not provided,
$50,000 for the first day that such information is not
provided on a timely basis and $19,000 for each subsequent
day that such information is not provided (with such amounts
being paid to the Treasury),''.
(2) Increased penalty for knowingly reporting false
information.--Section 1927(b)(3)(C)(ii) of the Social
Security Act (42 U.S.C. 1396r-8(b)(3)(C)(ii)) is amended by
striking ``$100,000'' and inserting ``$500,000''.
(3) Effective date.--The amendments made by this subsection
shall take effect on the first day of the first fiscal
quarter that begins after the date of enactment of this Act.
(c) Rule of Construction.--Nothing in this section or the
amendments made by this section shall be construed to affect
the application of the Federal Civil Penalties Inflation
Adjustment Act of 1990 (28 U.S.C. 2461 note) to any civil
penalty amount under section 1927 of the Social Security Act
(42 U.S.C. 1396r-8).
SEC. 14305. APPLYING MEDICAID DRUG REBATE REQUIREMENT TO
DRUGS PROVIDED AS PART OF OUTPATIENT HOSPITAL
SERVICES.
(a) In General.--Section 1927(k)(3) of the Social Security
Act (42 U.S.C. 1396r-8(k)(3)) is amended to read as follows:
``(3) Limiting definition.--
``(A) In general.--The term `covered outpatient drug' does
not include any drug, biological product, or insulin provided
as part of, or as incident to and in the same setting as, any
of the following (and for which payment may be made under
this title as part of payment for the following and not as
direct reimbursement for the drug):
``(i) Inpatient hospital services.
``(ii) Hospice services.
``(iii) Dental services, except that drugs for which the
State plan authorizes direct reimbursement to the dispensing
dentist are covered outpatient drugs.
``(iv) Physicians' services.
``(v) Outpatient hospital services.
``(vi) Nursing facility services and services provided by
an intermediate care facility for the mentally retarded.
``(vii) Other laboratory and x-ray services.
``(viii) Renal dialysis.
``(B) Other exclusions.--Such term also does not include
any such drug or product for which a National Drug Code
number is not required by the Food and Drug Administration or
a drug or biological used for a medical indication which is
not a medically accepted indication.
``(C) State option.--At the option of a State, such term
may include any drug, biological product, or insulin provided
on an outpatient basis as part of, or as incident to and in
the same setting as, services described in clause (iv) or (v)
of subparagraph (A) (such as a drug, biological product, or
insulin being provided as part of a bundled payment).
``(D) No effect on best price.--Any drug, biological
product, or insulin excluded from the definition of such term
as a result of this paragraph shall be treated as a covered
outpatient drug for purposes of determining the best price
(as defined in subsection (c)(1)(C)) for such drug,
biological product, or insulin.''.
(b) Effective Date; Implementation Guidance.--
(1) In general.--The amendment made by subsection (a) shall
take effect on the date that is 1 year after the date of
enactment of this Act.
(2) Implementation and guidance.--Not later than 1 year
after the date of enactment of this Act, the Secretary of
Health and Human Services shall issue guidance and relevant
informational bulletins for States, manufacturers (as defined
in section 1927(k)(5) of the Social Security Act (42 U.S.C.
1396r-8(k)(5)), and other relevant stakeholders, including
health care providers, regarding implementation of the
amendment made by subsection (a).
SEC. 14306. IMPROVING TRANSPARENCY AND PREVENTING THE USE OF
ABUSIVE SPREAD PRICING AND RELATED PRACTICES IN
MEDICAID.
(a) Pass-Through Pricing Required.--
(1) In general.--Section 1927(e) of the Social Security Act
(42 U.S.C. 1396r-8(e)) is amended by adding at the end the
following:
``(6) Pass-through pricing required.--A contract between
the State and a pharmacy benefit manager (referred to in this
paragraph as a `PBM'), or a contract between the State and a
managed care entity or other specified entity (as such terms
are defined in section 1903(m)(9)(D)) that includes
provisions making the entity responsible for coverage of
covered outpatient drugs dispensed to individuals enrolled
with the entity, shall require that payment for such drugs
(excluding, at the option of the State, any drug that is
subject to an agreement under section 340B of the Public
Health Service Act) and related administrative services (as
applicable), including payments made by a PBM on behalf of
the State or entity, is based on a pass-through pricing model
under which--
``(A) any payment made by the entity or the PBM (as
applicable) for such a drug--
``(i) is limited to--
``(I) ingredient cost; and
``(II) a professional dispensing fee that is not less than
the professional dispensing fee that the State plan or waiver
would pay if the plan or waiver was making the payment
directly;
``(ii) is passed through in its entirety by the entity or
PBM to the pharmacy that dispenses the drug; and
``(iii) is made in a manner that is consistent with section
1902(a)(30)(A) and sections 447.512, 447.514, and 447.518 of
title 42, Code of Federal Regulations (or any successor
regulation) as if such requirements applied directly to the
entity or the PBM;
``(B) payment to the entity or the PBM (as applicable) for
administrative services performed by the entity or PBM is
limited to a reasonable administrative fee that covers the
reasonable cost of providing such services;
``(C) the entity or the PBM (as applicable) shall make
available to the State, and the Secretary upon request, all
costs and payments related to covered outpatient drugs and
accompanying administrative services incurred, received, or
made by the entity or the PBM, including ingredient costs,
professional dispensing fees, administrative fees, post-sale
and post-invoice fees, discounts, or related adjustments such
as direct and indirect remuneration fees, and any and all
other remuneration; and
``(D) any form of spread pricing whereby any amount charged
or claimed by the entity or the PBM (as applicable) is in
excess of the amount paid to the pharmacies on behalf of the
entity, including any post-sale or post-invoice fees,
discounts, effective rate contract adjustments, or related
adjustments such as direct and indirect remuneration fees or
assessments (after allowing for a reasonable administrative
fee as described in subparagraph (B)) is not allowable for
purposes of claiming Federal matching payments under this
title.''.
(2) Conforming amendment.--Section 1903(m)(2)(A)(xiii) of
such Act (42 U.S.C. 1396b(m)(2)(A)(xiii)), as amended by
section 14301(b)(1), is amended--
(A) by striking ``and (IV)'' and inserting ``(IV)''; and
(B) by inserting before the period at the end the
following: ``, and (V) pharmacy benefit management services
provided by the entity, or provided by a pharmacy benefit
manager on behalf of the entity under a contract or other
arrangement between the entity and the pharmacy benefit
manager, shall
[[Page S4372]]
comply with the requirements of section 1927(e)(6)''.
(3) Effective date.--The amendments made by this subsection
apply to contracts between States and managed care entities,
other specified entities, or pharmacy benefits managers that
are entered into or renewed on or after the date that is 18
months after the date of enactment of this Act.
(b) Survey of Retail Prices.--
(1) In general.--Section 1927(f) of the Social Security Act
(42 U.S.C. 1396r-8(f)) is amended--
(A) by striking ``and'' after the semicolon at the end of
paragraph (1)(A)(i) and all that precedes it through ``(1)''
and inserting the following:
``(1) Survey of retail prices.--The Secretary shall conduct
a survey of retail community drug prices, to include at least
the national average drug acquisition cost, as follows:
``(A) Use of vendor.--The Secretary may contract services
for--
``(i) with respect to retail community pharmacies, the
determination on a monthly basis of retail survey prices of
the national average drug acquisition cost for covered
outpatient drugs for such pharmacies, net of all discounts
and rebates (to the extent any information with respect to
such discounts and rebates is available), the average
reimbursement received for such drugs by such pharmacies from
all sources of payment, including third parties, and, to the
extent available, the usual and customary charges to
consumers for such drugs; and'';
(B) by adding at the end of paragraph (1) the following:
``(F) Survey reporting.--In order to meet the requirement
of section 1902(a)(54), a State shall require that any retail
community pharmacy in the State that receives any payment,
administrative fee, discount, or rebate related to the
dispensing of covered outpatient drugs to individuals
receiving benefits under this title, regardless of whether
such payment, fee, discount, or rebate is received from the
State or a managed care entity directly or from a pharmacy
benefit manager or another entity that has a contract with
the State or a managed care entity or other specified entity
(as such terms are defined in section 1903(m)(9)(D)), shall
respond to surveys of retail prices conducted under this
subsection.
``(G) Survey information.--Information on retail community
prices obtained under this paragraph shall be made publicly
available and shall include at least the following:
``(i) The monthly response rate of the survey including a
list of pharmacies not in compliance with subparagraph (F).
``(ii) The sampling frame and number of pharmacies sampled
monthly.
``(iii) Characteristics of reporting pharmacies, including
type (such as independent or chain), geographic or regional
location, and dispensing volume.
``(iv) Reporting of a separate national average drug
acquisition cost for each drug for independent retail
pharmacies and chain operated pharmacies.
``(v) Information on price concessions including on and off
invoice discounts, rebates, and other price concessions.
``(vi) Information on average professional dispensing fees
paid.
``(H) Penalties.--
``(i) Failure to provide timely information.--A retail
community pharmacy that knowingly fails to respond to a
survey conducted under this subsection on a timely basis may
be subject to a civil monetary penalty in an amount not to
exceed $10,000 for each day in which such information has not
been provided.
``(ii) False information.--A retail community pharmacy that
knowingly provides false information in response to a survey
conducted under this subsection may be subject to a civil
money penalty in an amount not to exceed $100,000 for each
item of false information.
``(iii) Other penalties.--Any civil money penalties imposed
under this subparagraph shall be in addition to other
penalties as may be prescribed by law. The provisions of
section 1128A (other than subsections (a) and (b)) shall
apply to a civil money penalty under this subparagraph in the
same manner as such provisions apply to a penalty or
proceeding under section 1128A(a).
``(I) Report on specialty drugs and pharmacies.--
``(i) In general.--Not later than 18 months after the
effective date of this subparagraph, the Secretary shall
submit a report to Congress examining specialty drug coverage
and reimbursement under this title.
``(ii) Content of report.--Such report shall include a
description of how State Medicaid programs define specialty
drugs, how much State Medicaid programs pay for specialty
drugs, how States and managed care plans determine payment
for specialty drugs, the settings in which specialty drugs
are dispensed (such as retail community pharmacies or
specialty pharmacies), whether acquisition costs for
specialty drugs are captured in the national average drug
acquisition cost survey, and recommendations as to whether
specialty pharmacies should be included in the survey of
retail prices to ensure national average drug acquisition
costs capture drugs sold at specialty pharmacies and how such
specialty pharmacies should be defined.'';
(C) in paragraph (2)--
(i) in subparagraph (A), by inserting ``, including payment
rates under Medicaid managed care plans,'' after ``under this
title''; and
(ii) in subparagraph (B), by inserting ``and the basis for
such dispensing fees'' before the semicolon; and
(D) in paragraph (4), by inserting ``, and $5,000,000 for
fiscal year 2023 and each fiscal year thereafter,'' after
``2010''.
(2) Effective date.--The amendments made by this subsection
take effect on the 1st day of the 1st quarter that begins on
or after the date that is 18 months after the date of
enactment of this Act.
(c) Manufacturer Reporting of Wholesale Acquisition Cost.--
Section 1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is
amended--
(1) in subparagraph (A)(i)--
(A) in subclause (I), by striking ``and'' after the
semicolon;
(B) in subclause (II), by adding ``and'' after the
semicolon;
(C) by moving the left margins of subclause (I) and (II) 2
ems to the right; and
(D) by adding at the end the following:
``(III) in the case of rebate periods that begin on or
after the date of enactment of this subclause, on the
wholesale acquisition cost (as defined in section
1847A(c)(6)(B)) for covered outpatient drugs for the rebate
period under the agreement (including for all such drugs that
are sold under a new drug application approved under section
505(c) of the Federal Food, Drug, and Cosmetic Act);''; and
(2) in subparagraph (D)--
(A) in the matter preceding clause (i), by inserting ``and
clause (viii) of this subparagraph'' after ``1847A'';
(B) in clause (vi), by striking ``and'' after the comma;
(C) in clause (vii), by striking the period and inserting
``, and''; and
(D) by inserting after clause (vii) the following:
``(viii) to the Secretary to disclose (through a website
accessible to the public) the most recently reported
wholesale acquisition cost (as defined in section
1847A(c)(6)(B)) for each covered outpatient drug (including
for all such drugs that are sold under a new drug application
approved under section 505(c) of the Federal Food, Drug, and
Cosmetic Act), as reported under subparagraph (A)(i)(III).''.
SEC. 14307. T-MSIS DRUG DATA ANALYTICS REPORTS.
(a) In General.--Not later than May 1 of each calendar year
beginning with calendar year 2021, the Secretary of Health
and Human Services (in this section referred to as the
``Secretary'') shall publish on a website of the Centers for
Medicare & Medicaid Services that is accessible to the public
a report of the most recently available data on patterns
related to prescriptions filled by providers and reimbursed
under the Medicaid program.
(b) Content of Report.--
(1) Required content.--Each report required under
subsection (a) for a calendar year shall include the
following information with respect to each State (and, to the
extent available, with respect to Puerto Rico, the United
States Virgin Islands, Guam, the Northern Mariana Islands,
and American Samoa):
(A) A comparison of covered outpatient drug (as defined in
section 1927(k)(2) of the Social Security Act (42 U.S.C.
1396r-8(k)(2))) prescribing patterns under the State Medicaid
plan or waiver of such plan (including drugs prescribed on a
fee-for-service basis and drugs prescribed under managed care
arrangements under such plan or waiver)--
(i) across all available forms or models of reimbursement
used under the plan or waiver;
(ii) within specialties and subspecialties, as defined by
the Secretary;
(iii) by episodes of care for--
(I) each chronic disease category, as defined by the
Secretary, that is represented in the 10 conditions that
accounted for the greatest share of total spending under the
plan or waiver during the year that is the subject of the
report;
(II) procedural groupings; and
(III) rare disease diagnosis codes (except where the
inclusion of such information would jeopardize the privacy of
an individual, as determined by the Secretary);
(iv) by patient demographic characteristics, including race
(to the extent that the Secretary determines that there is
sufficient data available with respect to such characteristic
in a majority of States and that inclusion of such
characteristic would not jeopardize the privacy of the
individual), gender, and age;
(v) by patient high-utilizer or risk status; and
(vi) by high and low resource settings by facility and
place of service categories, as determined by the Secretary.
(B) In the case of medical assistance for covered
outpatient drugs (as so defined) provided under a State
Medicaid plan or waiver of such plan in a managed care
setting, an analysis of the differences in managed care
prescribing patterns when a covered outpatient drug is
prescribed in a managed care setting as compared to when the
drug is prescribed in a fee-for-service setting.
(2) Additional content.--To the extent available, a report
required under subsection (a) for a calendar year may include
State-specific information about prescription utilization
management tools under State Medicaid plans or waivers of
such plans, including--
[[Page S4373]]
(A) a description of prescription utilization management
tools under State programs to provide long-term services and
supports under a State Medicaid plan or a waiver of such
plan;
(B) a comparison of prescription utilization management
tools applicable to populations covered under a State
Medicaid plan waiver under section 1115 of the Social
Security Act (42 U.S.C. 1315) and the models applicable to
populations that are not covered under the waiver;
(C) a comparison of the prescription utilization management
tools employed by different Medicaid managed care
organizations, pharmacy benefit managers, and related
entities within the State;
(D) a comparison of the prescription utilization management
tools applicable to each enrollment category under a State
Medicaid plan or waiver; and
(E) a comparison of the prescription utilization management
tools applicable under the State Medicaid plan or waiver by
patient high-utilizer or risk status.
(3) Additional analysis.--To the extent practicable, the
Secretary shall include in each report published under
subsection (a)--
(A) analyses of national, State, and local patterns of
Medicaid population-based prescribing behaviors (including an
analysis of the impact of non-filled prescriptions on
identifying such patterns); and
(B) recommendations for administrative or legislative
action to improve the effectiveness of, and reduce costs for,
covered outpatient drugs under Medicaid while ensuring timely
beneficiary access to medically necessary covered outpatient
drugs.
(c) Use of T-MSIS Data.--Each report required under
subsection (a) shall, to the extent practicable--
(1) be prepared using data and definitions from the
Transformed Medicaid Statistical Information System (``T-
MSIS'') data set (or a successor data set) that is not more
than 24 months old on the date that the report is published;
and
(2) as appropriate, include a description with respect to
each State of the quality and completeness of the data, as
well as any necessary caveats describing the limitations of
the data reported to the Secretary by the State that are
sufficient to communicate the appropriate uses for the
information.
(d) Preparation of Report.--Each report required under
subsection (a) shall be prepared by the Administrator for the
Centers for Medicare & Medicaid Services.
(e) Appropriation.--For fiscal year 2022 and each fiscal
year thereafter, there is appropriated to the Secretary
$2,000,000 to carry out this section.
SEC. 14308. RISK-SHARING VALUE-BASED PAYMENT AGREEMENTS FOR
COVERED OUTPATIENT DRUGS UNDER MEDICAID.
(a) In General.--Section 1927 of the Social Security Act
(42 U.S.C. 1396r-8) is amended by adding at the end the
following new subsection:
``(l) State Option To Pay for Covered Outpatient Drugs
Through Risk-Sharing Value-Based Agreements.--
``(1) In general.--Beginning January 1, 2024, a State shall
have the option to pay (whether on a fee-for-service or
managed care basis) for covered outpatient drugs that are
potentially curative treatments intended for one-time use
that are administered to individuals under this title by
entering into a risk-sharing value-based payment agreement
with the manufacturer of the drug in accordance with the
requirements of this subsection.
``(2) Secretarial approval.--
``(A) In general.--A State shall submit a request to the
Secretary to enter into a risk-sharing value-based payment
agreement, and the Secretary shall not approve a proposed
risk-sharing value-based payment agreement between a State
and a manufacturer for payment for a covered outpatient drug
of the manufacturer unless the following requirements are
met:
``(i) Manufacturer has in effect a rebate agreement and is
in compliance with all applicable requirements.--The
manufacturer has a rebate agreement in effect as required
under subsections (a) and (b) of this section and is in
compliance with all applicable requirements under this title.
``(ii) No expected increase to projected net federal
spending.--
``(I) In general.--The Chief Actuary certifies that the
projected payments for each covered outpatient drug under a
proposed risk-sharing value-based payment agreement is not
expected to result in greater estimated Federal spending
under this title than the net Federal spending that would
result in the absence of such agreement.
``(II) Net federal spending defined.--For purposes of this
subsection, the term `net Federal spending' means the amount
of Federal payments the Chief Actuary estimates would be made
under this title for administering a covered outpatient drug
to an individual eligible for medical assistance under a
State plan or a waiver of such plan, reduced by the amount of
all rebates the Chief Actuary estimates would be paid with
respect to the administering of such drug, including all
rebates under this title and any supplemental or other
additional rebates, in the absence of such an agreement.
``(III) Information.--The Chief Actuary shall make the
certifications required under this clause based on the most
recently available and reliable drug pricing and product
information. The State and manufacturer shall provide the
Secretary and the Chief Actuary with all necessary
information required to make the estimates needed for such
certifications.
``(iii) Launch and list price justifications.--The
manufacturer submits all relevant information and supporting
documentation necessary for pricing decisions as deemed
appropriate by the Secretary, which shall be truthful and
non-misleading, including manufacturer information and
supporting documentation for launch price or list price
increases, and any applicable justification required under
section 1128L.
``(iv) Confidentiality of information; penalties.--The
provisions of subparagraphs (C) and (D) of subsection (b)(3)
shall apply to a manufacturer that fails to submit the
information and documentation required under clauses (ii) and
(iii) on a timely basis, or that knowingly provides false or
misleading information, in the same manner as such provisions
apply to a manufacturer with a rebate agreement under this
section.
``(B) Consideration of state request for approval.--
``(i) In general.--The Secretary shall treat a State
request for approval of a risk-sharing value-based payment
agreement in the same manner that the Secretary treats a
State plan amendment, and subpart B of part 430 of title 42,
Code of Federal Regulations, including, subject to clause
(ii), the timing requirements of section 430.16 of such title
(as in effect on the date of enactment of this subsection),
shall apply to a request for approval of a risk-sharing
value-based payment agreement in the same manner as such
subpart applies to a State plan amendment.
``(ii) Timing.--The Secretary shall consult with the
Commissioner of Food and Drugs as required under subparagraph
(C) and make a determination on whether to approve a request
from a State for approval of a proposed risk-sharing value-
based payment agreement (or request additional information
necessary to allow the Secretary to make a determination with
respect to such request for approval) within the time period,
to the extent practicable, specified in section 430.16 of
title 42, Code of Federal Regulations (as in effect on the
date of enactment of this subsection), but in no case shall
the Secretary take more than 180 days after the receipt of
such request for approval or response to such request for
additional information to make such a determination (or
request additional information).
``(C) Consultation with the commissioner of food and
drugs.--In considering whether to approve a risk-sharing
value-based payment agreement, the Secretary, to the extent
necessary, shall consult with the Commissioner of Food and
Drugs to determine whether the relevant clinical parameters
specified in such agreement are appropriate.
``(3) Installment-based payment structure.--
``(A) In general.--A risk-sharing value-based payment
agreement shall provide for a payment structure under which,
for every installment year of the agreement (subject to
subparagraph (B)), the State shall pay the total installment
year amount in equal installments to be paid at regular
intervals over a period of time that shall be specified in
the agreement.
``(B) Requirements for installment payments.--
``(i) Timing of first payment.--The State shall make the
first of the installment payments described in subparagraph
(A) for an installment year not later than 30 days after the
end of such year.
``(ii) Length of installment period.--The period of time
over which the State shall make the installment payments
described in subparagraph (A) for an installment year shall
not be longer than 5 years.
``(iii) Nonpayment or reduced payment of installments
following a failure to meet clinical parameter.--If, prior to
the payment date (as specified in the agreement) of any
installment payment described in subparagraph (A) or any
other alternative date or time frame (as otherwise specified
in the agreement), the covered outpatient drug which is
subject to the agreement fails to meet a relevant clinical
parameter of the agreement, the agreement shall provide
that--
``(I) the installment payment shall not be made; or
``(II) the installment payment shall be reduced by a
percentage specified in the agreement that is based on the
outcome achieved by the drug relative to the relevant
clinical parameter.
``(4) Notice of intent.--
``(A) In general.--Subject to subparagraph (B), a
manufacturer of a covered outpatient drug shall not be
eligible to enter into a risk-sharing value-based payment
agreement under this subsection with respect to such drug
unless the manufacturer notifies the Secretary that the
manufacturer is interested in entering into such an agreement
with respect to such drug. The decision to submit and timing
of a request to enter into a proposed risk-sharing value-
based payment agreement shall remain solely within the
discretion of the State and shall only be effective upon
Secretarial approval as required under this subsection.
``(B) Treatment of subsequently approved drugs.--
``(i) In general.--In the case of a manufacturer of a
covered outpatient drug designated under section 526 of the
Federal Food, Drug, and Cosmetics Act, and approved under
section 505 of such Act or licensed under subsection (a) or
(k) of section 351 of the Public Health Service Act after the
[[Page S4374]]
date of enactment of this subsection, not more than 90 days
after meeting with the Food and Drug Administration following
phase II clinical trials for such drug (or, in the case of a
drug described in clause (ii), not later than March 31,
2022), the manufacturer must notify the Secretary of the
manufacturer's intent to enter into a risk-sharing value-
based payment agreement under this subsection with respect to
such drug. If no such meeting has occurred, the Secretary may
use discretion as to whether a potentially curative treatment
intended for one-time use may qualify for a risk-sharing
value-based payment agreement under this section. A
manufacturer notification of interest shall not have any
influence on a decision for drug approval by the Food and
Drug Administration.
``(ii) Application to certain subsequently approved
drugs.--A drug described in this clause is a covered
outpatient drug of a manufacturer--
``(I) that is approved under section 505 of the Federal
Food, Drug, and Cosmetic Act or licensed under section 351 of
the Public Health Service Act after the date of enactment of
this subsection; and
``(II) with respect to which, as of January 1, 2024, more
than 90 days have passed after the manufacturer's meeting
with the Food and Drug Administration following phase II
clinical trials for such drug.
``(iii) Parallel approval.--The Secretary, in coordination
with the Administrator of the Centers for Medicare & Medicaid
Services and the Commissioner of Food and Drugs, shall, to
the extent practicable, approve a State's request to enter
into a proposed risk-sharing value-based payment agreement
that otherwise meets the requirements of this subsection at
the time that such a drug is approved by the Food and Drug
Administration to help provide that no State that wishes to
enter into such an agreement is required to pay for the drug
in full at one time if the State is seeking to pay over a
period of time as outlined in the proposed agreement.
``(iv) Rule of construction.--Nothing in this paragraph
shall be applied or construed to modify or affect the
timeframes or factors involved in the Secretary's
determination of whether to approve or license a drug under
section 505 of the Federal Food, Drug, and Cosmetic Act or
section 351 of the Public Health Service Act.
``(5) Special payment rules.--
``(A) In general.--Except as otherwise provided in this
paragraph, with respect to an individual who is administered
a unit of a covered outpatient drug that is reimbursed under
a State plan by a State Medicaid agency under a risk-sharing
value-based payment agreement in an installment year, the
State shall remain liable to the manufacturer of such drug
for payment for such unit without regard to whether the
individual remains enrolled in the State plan under this
title (or a waiver of such plan) for each installment year
for which the State is to make installment payments for
covered outpatient drugs purchased under the agreement in
such year.
``(B) Death.--In the case of an individual described in
subparagraph (A) who dies during the period described in such
subparagraph, the State plan shall not be liable for any
remaining payment for the unit of the covered outpatient drug
administered to the individual which is owed under the
agreement described in such subparagraph.
``(C) Withdrawal of approval.--In the case of a covered
outpatient drug that is the subject of a risk-sharing value-
based payment agreement between a State and a manufacturer
under this subsection, including a drug approved in
accordance with section 506(c) of the Federal Food, Drug, and
Cosmetic Act, and such drug is the subject of an application
that has been withdrawn by the Secretary, the State plan
shall not be liable for any remaining payment that is owed
under the agreement.
``(D) Alternative arrangement under agreement.--Subject to
approval by the Secretary, the terms of a proposed risk-
sharing value-based payment agreement submitted for approval
by a State may provide that subparagraph (A) shall not apply.
``(E) Guidance.--Not later than January 1, 2024, the
Secretary shall issue guidance to States establishing a
process for States to notify the Secretary when an individual
who is administered a unit of a covered outpatient drug that
is purchased by a State plan under a risk-sharing value-based
payment agreement ceases to be enrolled under the State plan
under this title (or a waiver of such plan) or dies before
the end of the installment period applicable to such unit
under the agreement.
``(6) Treatment of payments under risk-sharing value-based
agreements for purposes of average manufacturer price; best
price.--The Secretary shall treat any payments made to the
manufacturer of a covered outpatient drug under a risk-
sharing value-based payment agreement under this subsection
during a rebate period in the same manner that the Secretary
treats payments made under a State supplemental rebate
agreement under sections 447.504(c)(19) and 447.505(c)(7) of
title 42, Code of Federal Regulations (or any successor
regulations) for purposes of determining average manufacturer
price and best price under this section with respect to the
covered outpatient drug and a rebate period and for purposes
of offsets required under subsection (b)(1)(B).
``(7) Assessments and report to congress.--
``(A) Assessments.--
``(i) In general.--Not later than 180 days after the end of
each assessment period of any risk-sharing value-based
payment agreement for a State approved under this subsection,
the Secretary shall conduct an evaluation of such agreement
which shall include an evaluation by the Chief Actuary to
determine whether program spending under the risk-sharing
value-based payment agreement aligned with the projections
for the agreement made under paragraph (2)(A)(ii), including
an assessment of whether actual Federal spending under this
title under the agreement was less or more than net Federal
spending would have been in the absence of the agreement.
``(ii) Assessment period.--For purposes of clause (i)--
``(I) the first assessment period for a risk-sharing value-
based payment agreement shall be the period of time over
which payments are scheduled to be made under the agreement
for the first 10 individuals who are administered covered
outpatient drugs under the agreement except that such period
shall not exceed the 5-year period after the date on which
the Secretary approves the agreement; and
``(II) each subsequent assessment period for a risk-sharing
value-based payment agreement shall be the 5-year period
following the end of the previous assessment period.
``(B) Results of assessments.--
``(i) Termination option.--If the Secretary determines as a
result of the assessment by the Chief Actuary under
subparagraph (A) that the actual Federal spending under this
title for any covered outpatient drug that was the subject of
the State's risk-sharing value-based payment agreement was
greater than the net Federal spending that would have
resulted in the absence of the agreement, the Secretary may
terminate approval of such agreement and shall immediately
conduct an assessment under this paragraph of any other
ongoing risk-sharing value-based payment agreement to which
the same manufacturer is a party.
``(ii) Repayment required.--
``(I) In general.--If the Secretary determines as a result
of the assessment by the Chief Actuary under subparagraph (A)
that the Federal spending under the risk-sharing value-based
agreement for a covered outpatient drug that was subject to
such agreement was greater than the net Federal spending that
would have resulted in the absence of the agreement, the
manufacturer shall repay the difference to the State and
Federal governments in a timely manner as determined by the
Secretary.
``(II) Termination for failure to pay.--The failure of a
manufacturer to make repayments required under subclause (I)
in a timely manner shall result in immediate termination of
all risk-sharing value-based agreements to which the
manufacturer is a party.
``(III) Additional penalties.--In the case of a
manufacturer that fails to make repayments required under
subclause (I), the Secretary may treat such manufacturer in
the same manner as a manufacturer that fails to pay required
rebates under this section, and the Secretary may--
``(aa) suspend or terminate the manufacturer's rebate
agreement under this section; and
``(bb) pursue any other remedy that would be available if
the manufacturer had failed to pay required rebates under
this section.
``(C) Report to congress.--Not later than 5 years after the
first risk-sharing value-based payment agreement is approved
under this subsection, the Secretary shall submit to Congress
and make available to the public a report that includes--
``(i) an assessment of the impact of risk-sharing value-
based payment agreements on access for individuals who are
eligible for benefits under a State plan or waiver under this
title to medically necessary covered outpatient drugs and
related treatments;
``(ii) an analysis of the impact of such agreements on
overall State and Federal spending under this title;
``(iii) an assessment of the impact of such agreements on
drug prices, including launch price and price increases; and
``(iv) such recommendations to Congress as the Secretary
deems appropriate.
``(8) Guidance and regulations.--
``(A) In general.--Not later than January 1, 2024, the
Secretary shall issue guidance to States seeking to enter
into risk-sharing value-based payment agreements under this
subsection that includes a model template for such
agreements. The Secretary may issue any additional guidance
or promulgate regulations as necessary to implement and
enforce the provisions of this subsection.
``(B) Model agreements.--
``(i) In general.--If a State expresses an interest in
pursuing a risk-sharing value-based payment agreement under
this subsection with a manufacturer for the purchase of a
covered outpatient drug, the Secretary may share with such
State any risk-sharing value-based agreement between a State
and the manufacturer for the purchase of such drug that has
been approved under this subsection. While such shared
agreement may serve as a template for a State that wishes to
propose, the use of a previously approved agreement shall not
affect the submission and approval process for approval of a
proposed risk-sharing value-based payment agreement under
this subsection, including the requirements under paragraph
(2)(A).
``(ii) Confidentiality.--In the case of a risk-sharing
value-based payment agreement that is disclosed to a State by
the Secretary
[[Page S4375]]
under this subparagraph and that is only in effect with
respect to a single State, the confidentiality of information
provisions described in subsection (b)(3)(D) shall apply to
such information.
``(C) OIG consultation.--
``(i) In general.--The Secretary shall consult with the
Office of the Inspector General of the Department of Health
and Human Services to determine whether there are potential
program integrity concerns (including issues related to
compliance with sections 1128B and 1877) with agreement
approvals or templates and address accordingly.
``(ii) OIG policy updates as necessary.--The Inspector
General of the Department of Health and Human Services shall
review and update, as necessary, any policies or guidelines
of the Office of the Inspector General of the Department of
Human Services (including policies related to the enforcement
of section 1128B) to accommodate the use of risk-sharing
value-based payment agreements in accordance with this
section.
``(9) Rules of construction.--
``(A) Modifications.--Nothing in this subsection or any
regulations promulgated under this subsection shall prohibit
a State from requesting a modification from the Secretary to
the terms of a risk-sharing value-based payment agreement. A
modification that is expected to result in any increase to
projected net State or Federal spending under the agreement
shall be subject to recertification by the Chief Actuary as
described in paragraph (2)(A)(ii) before the modification may
be approved.
``(B) Rebate agreements.--Nothing in this subsection shall
be construed as requiring a State to enter into a risk-
sharing value-based payment agreement or as limiting or
superseding the ability of a State to enter into a
supplemental rebate agreement for a covered outpatient drug.
``(C) FFP for payments under risk-sharing value-based
payment agreements.--Federal financial participation shall be
available under this title for any payment made by a State to
a manufacturer for a covered outpatient drug under a risk-
sharing value-based payment agreement in accordance with this
subsection, except that no Federal financial participation
shall be available for any payment made by a State to a
manufacturer under such an agreement on and after the
effective date of a disapproval of such agreement by the
Secretary.
``(D) Continued application of other provisions.--Except as
expressly provided in this subsection, nothing in this
subsection or in any regulations promulgated under this
subsection shall affect the application of any other
provision of this Act.
``(10) Appropriations.--For fiscal year 2022 and each
fiscal year thereafter, there are appropriated to the
Secretary $5,000,000 for the purpose of carrying out this
subsection.
``(11) Definitions.--In this subsection:
``(A) Chief actuary.--The term `Chief Actuary' means the
Chief Actuary of the Centers for Medicare & Medicaid
Services.
``(B) Installment year.--The term `installment year' means,
with respect to a risk-sharing value-based payment agreement,
a 12-month period during which a covered outpatient drug is
administered under the agreement.
``(C) Potentially curative treatment intended for one-time
use.--The term `potentially curative treatment intended for
one-time use' means a treatment that consists of the
administration of a covered outpatient drug that--
``(i) is a form of gene therapy for a rare disease, as
defined by the Commissioner of Food and Drugs, designated
under section 526 of the Federal Food, Drug, and Cosmetics
Act, and approved under section 505 of such Act or licensed
under subsection (a) or (k) of section 351 of the Public
Health Service Act to treat a serious or life-threatening
disease or condition;
``(ii) if administered in accordance with the labeling of
such drug, is expected to result in either--
``(I) the cure of such disease or condition; or
``(II) a reduction in the symptoms of such disease or
condition to the extent that such disease or condition is not
expected to lead to early mortality; and
``(iii) is expected to achieve a result described in clause
(ii), which may be achieved over an extended period of time,
after not more than 3 administrations.
``(D) Relevant clinical parameter.--The term `relevant
clinical parameter' means, with respect to a covered
outpatient drug that is the subject of a risk-sharing value-
based payment agreement--
``(i) a clinical endpoint specified in the drug's labeling
or supported by one or more of the compendia described in
section 1861(t)(2)(B)(ii)(I) that--
``(I) is able to be measured or evaluated on an annual
basis for each year of the agreement on an independent basis
by a provider or other entity; and
``(II) is required to be achieved (based on observed
metrics in patient populations) under the terms of the
agreement; or
``(ii) a surrogate endpoint (as defined in section
507(e)(9) of the Federal Food, Drug, and Cosmetic Act),
including those developed by patient-focused drug development
tools, that--
``(I) is able to be measured or evaluated on an annual
basis for each year of the agreement on an independent basis
by a provider or other entity; and
``(II) has been qualified by the Food and Drug
Administration.
``(E) Risk-sharing value-based payment agreement.--The term
`risk-sharing value-based payment agreement' means an
agreement between a State plan and a manufacturer--
``(i) for the purchase of a covered outpatient drug of the
manufacturer that is a potentially curative treatment
intended for one-time use;
``(ii) under which payment for such drug shall be made
pursuant to an installment-based payment structure that meets
the requirements of paragraph (3);
``(iii) which conditions payment on the achievement of at
least 2 relevant clinical parameters (as defined in
subparagraph (C));
``(iv) which provides that--
``(I) the State plan will directly reimburse the
manufacturer for the drug; or
``(II) a third party will reimburse the manufacture in a
manner approved by the Secretary;
``(v) is approved by the Secretary in accordance with
paragraph (2).
``(F) Total installment year amount.--The term `total
installment year amount' means, with respect to a risk-
sharing value-based payment agreement for the purchase of a
covered outpatient drug and an installment year, an amount
equal to the product of--
``(i) the unit price of the drug charged under the
agreement; and
``(ii) the number of units of such drug administered under
the agreement during such installment year.''.
(b) Conforming Amendments.--
(1) Section 1903(i)(10)(A) of the Social Security Act (42
U.S.C. 1396b(i)(10)(A)) is amended by striking ``or unless
section 1927(a)(3) applies'' and inserting ``, section
1927(a)(3) applies with respect to such drugs, or such drugs
are the subject of a risk-sharing value-based payment
agreement under section 1927(l)''.
(2) Section 1927(b) of the Social Security Act (42 U.S.C.
1396r-8(b)) is amended--
(A) in paragraph (1)(A), by inserting ``but excluding any
drugs for which payment is made by a State under a risk-
sharing value-based payment agreement under subsection (l))''
after ``for coverage of such drugs''; and
(B) in paragraph (3)--
(i) in subparagraph (C)(i), by inserting ``or subsection
(l)(2)(A)'' after ``subparagraph (A)''; and
(ii) in subparagraph (D), in the matter preceding clause
(i), by inserting ``, under subsection (l)(2)(A),'' after
``under this paragraph''.
SEC. 14309. MODIFICATION OF MAXIMUM REBATE AMOUNT UNDER
MEDICAID DRUG REBATE PROGRAM.
(a) In General.--Subparagraph (D) of section 1927(c)(2) of
the Social Security Act (42 U.S.C. 1396r-8(c)(2)) is amended
to read as follows:
``(D) Maximum rebate amount.--
``(i) In general.--Except as provided in clause (ii), in no
case shall the sum of the amounts applied under paragraph
(1)(A)(ii) and this paragraph with respect to each dosage
form and strength of a single source drug or an innovator
multiple source drug for a rebate period exceed--
``(I) for rebate periods beginning after December 31, 2009,
and before September 30, 2024, 100 percent of the average
manufacturer price of the drug; and
``(II) for rebate periods beginning on or after October 1,
2024, 125 percent of the average manufacturer price of the
drug.
``(ii) No maximum amount for drugs if amp increases outpace
inflation.--
``(I) In general.--If the average manufacturer price with
respect to each dosage form and strength of a single source
drug or an innovator multiple source drug increases on or
after October 1, 2023, and such increased average
manufacturer price exceeds the inflation-adjusted average
manufacturer price determined with respect to such drug under
subclause (II) for the rebate period, clause (i) shall not
apply and there shall be no limitation on the sum of the
amounts applied under paragraph (1)(A)(ii) and this paragraph
for the rebate period, and any subsequent rebate period until
the average manufacturer price of the drug is the same or
less than the inflation-adjusted average manufacturer price
determined with respect to such drug under subclause (II) for
the rebate period, with respect to each dosage form and
strength of the single source drug or innovator multiple
source drug.
``(II) Inflation-adjusted average manufacturer price
defined.--In this clause, the term `inflation-adjusted
average manufacturer price' means, with respect to a single
source drug or an innovator multiple source drug and a rebate
period, the average manufacturer price for each dosage form
and strength of the drug for the calendar quarter beginning
July 1, 1990 (without regard to whether or not the drug has
been sold or transferred to an entity, including a division
or subsidiary of the manufacturer, after the 1st day of such
quarter), increased by the percentage by which the consumer
price index for all urban consumers (United States city
average) for the month before the month in which the rebate
period begins exceeds such index for September 1990.''.
(b) Treatment of Subsequently Approved Drugs.--Section
1927(c)(2)(B) of the Social Security Act (42 U.S.C. 1396r-
8(c)(2)(B)) is amended by inserting ``and clause (ii)(II) of
subparagraph (D)'' after ``clause (ii)(II) of subparagraph
(A)''.
(c) Technical Amendments.--Section 1927(c)(3)(C)(ii)(IV) of
the Social Security Act
[[Page S4376]]
(42 U.S.C. 1396r-9(c)(3)(C)(ii)(IV)) is amended--
(1) by striking ``subparagraph (A)'' and inserting
``paragraph (3)(A)''; and
(2) by striking ``this subparagraph'' and inserting
``paragraph (3)(C)''.
______