[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6101 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 6101
To amend title XIX of the Social Security Act to improve transparency
and prevent the use of abusive spread pricing and related practices in
the Medicaid program.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 1, 2021
Mr. Carter of Georgia (for himself and Mr. Vicente Gonzalez of Texas)
introduced the following bill; which was referred to the Committee on
Energy and Commerce
_______________________________________________________________________
A BILL
To amend title XIX of the Social Security Act to improve transparency
and prevent the use of abusive spread pricing and related practices in
the Medicaid program.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Drug Price Transparency in Medicaid
Act of 2021''.
SEC. 2. 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 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 or provider
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,
except that any payment by the entity or the
PBM (as applicable) for the ingredient cost of
a covered outpatient drug dispensed by
providers and pharmacies referenced in clauses
(i) or (ii) of section 447.518(a)(1) of title
42, Code of Federal Regulations (or any
successor regulation) shall be the same as the
payment amount for the ingredient cost when
dispensed by providers and pharmacies not
referenced in such clauses, and in no case
shall payment for the ingredient cost of a
covered outpatient drug be based on the actual
acquisition cost of a drug dispensed by
providers and pharmacies referenced in such
clauses or take into account a drug's status as
a drug purchased at a discounted price by a
provider or pharmacy referenced in such
clauses;
``(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, 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.
``(7) Protection against mandates relating to use of 340b
drugs.--
``(A) In general.--Notwithstanding any other
provision of law, no State, Medicaid managed care
organization (as defined in section 1903(m)(1)(A)), or
pharmacy benefit manager may prohibit a covered entity
under section 340B of the Public Health Service Act, or
a pharmacy under contract with a covered entity to
dispense drugs on behalf of the covered entity, from
dispensing covered outpatient drugs purchased under
such section to individuals receiving benefits under
this title and from receiving payment in accordance
with this section, or require that such covered entity
or pharmacy dispense covered outpatient drugs purchased
under section 340B to such individuals.
``(B) Notification.--The Secretary shall notify
States that States may not prohibit a provider under
this title that is a covered entity under section 340B
of the Public Health Services Act, or a pharmacy under
contract with a covered entity, from submitting claims
for reimbursement for drugs purchased under such
section that are dispensed to individuals receiving
benefits under this title and may not require such
provider to dispense covered outpatient drugs purchased
under such section to such individuals.''.
(2) Conforming amendment.--Section 1903(m)(2)(A)(xiii) of
such Act (42 U.S.C. 1396b(m)(2)(A)(xiii)) is amended--
(A) by striking ``and (III)'' and inserting
``(III)'';
(B) by inserting before the period at the end the
following: ``, and (IV) 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 comply with the
requirements of section 1927(e)(6)''; and
(C) by moving the left margin 2 ems to the left.
(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) Ensuring Accurate Payments to Pharmacies Under Medicaid.--
(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) Determining pharmacy actual acquisition costs.--The
Secretary shall conduct a survey of retail community pharmacy
drug prices to determine 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 of retail survey
prices of the national average drug acquisition
cost for covered outpatient drugs based on a
monthly survey of such pharmacies, net of all
discounts and rebates (to the extent any
information with respect to such discounts and
rebates is available); 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, reimbursement,
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, shall respond to surveys of retail prices
conducted under this subsection.
``(G) Survey information.--Information on retail
community actual acquisition 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
pharmacies.
``(v) Information on price concessions
including on and off invoice discounts,
rebates, and other price concessions to the
extent that such information is available
during the survey period.
``(vi) Information on average professional
dispensing fees paid.
``(H) Report on specialty pharmacies.--
``(i) In general.--Not later than 1 year
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 payments 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 first day of the first quarter that begins
on or after the date that is 18 months after the date of
enactment of this Act.
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