[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

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     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--

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       (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)''.
                                 ______