Bill summaries are authored by CRS.

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Passed House amended (09/22/1992)

Medicaid and Department of Veterans Affairs Drug Rebate Amendments of 1992 - Amends the Social Security Act to exclude the prices charged for prescription drugs procured by the following methods from the calculation of best price procurement for purposes of application of Medicaid (title XIX of the Social Security Act) rebate agreements: (1) purchase by the Indian Health Service, the Department of Veterans Affairs (Department), or certain federally-funded clinics and public or private nonprofit hospitals; (2) charged under the Federal Supply Schedule of the General Services Administration (FSS); or (3) charged under a State pharmaceutical assistance program by reference to prices charged to the Department.

Requires an agreement between the Secretary of Health and Human Services and a drug manufacturer limiting the purchase price of drugs procured by covered entities (the federally-funded clinics and public or private nonprofit hospitals referred to above) on or after October 1, 1992, to an amount equal to the average manufacturer price for such drug in the preceding calendar quarter, reduced by a specified rebate percentage. Defines further the "covered entities" eligible for such reduced prescription drug purchase prices and requires such covered entities, in order to receive such favored prices, to: (1) take certain steps to avoid duplicative rebates; (2) refrain from reselling such purchased drug to a person who is not a patient of such entity; (3) permit audits of records in order to determine agreement compliance; and (4) be liable to the manufacturer for the full amount of any reduced price if the Secretary determines agreement noncompliance.

Outlines requirements with respect to drugs procured by the Department from a drug manufacturer on or after October 1, 1992, under either the FSS or under a depot contracting system. Includes only certain covered drugs and innovator multiple source drugs under such price reduction provisions and limits prices charged under the FSS or a depot contracting system to no more than 76 percent of the non-Federal average manufacturing price. Provides an additional price discount for covered drugs purchased under a purchase agreement that is based on a percentage of the average non-Federal manufacturing price of the drug and the percentage increases in the Consumer Price Index for the applicable period. Provides for the calculation of drug price discounts under multiyear drug purchase contracts entered into between a manufacturer and the Secretary of Veterans Affairs. Makes applicable to the Secretary of Veterans Affairs all agreement and discount eligibility requirements applicable to the Secretary of Health and Human Services and covered outpatient drugs.

Directs the Secretary of Health and Human Services to conduct a study of, and report to the Congress on, the feasibility and desirability of including the following entities as covered entities eligible for limitations on the prices of covered outpatient drugs: (1) entities receiving funds from a State for the provision of mental health or substance abuse treatment services under the Public Health Service Act; (2) entities receiving funds under such Act for services relating to the treatment of sexually transmitted diseases or tuberculosis; and (3) entities receiving funds from a State under the Social Security Act for the provision of maternal and child health care services that are furnished on an outpatient basis.

Provides a new determination of the basic Medicaid rebate for single source and innovator multiple source drugs for specified calendar quarters beginning after September 30, 1992.

Directs the Secretary of Health and Human Services, after each calendar quarter that begins on or after October 1, 1992, and ends on or before December 31, 1995, to report to the Congress specified information relating to Medicaid best price changes and rebate payments. Prohibits any report submitted from containing any information with respect to any prescription drug unless the Secretary finds that expenditures for the drug are significant expenditures under the Medicaid drug purchase and rebate program.

Amends Federal veterans' benefits provisions to direct the Secretary of Veterans Affairs to enter into an agreement with each manufacturer of covered drugs or innovator multiple source drugs under which: (1) beginning January 1, 1993, the manufacturer makes available on the FSS each such drug; and (2) for each drug that is purchased under the depot contracting system or listed on the FSS, the price charged may not exceed 76 percent of the non-Federal average manufacturer price, less any required additional discounts. Provides an additional discount in the purchase price of such covered drugs based on a percentage of the average non-Federal manufacturing price of the drug and the percentage increase in the Consumer Price Index for applicable periods beginning on or after October 1, 1992. Provides for such additional discount determination under multiyear drug procurement contracts entered into between a manufacturer and the Secretary of Veterans Affairs. Requires the manufacturer of any drug covered under any such agreement to report to the Secretary quarterly on the non-Federal average manufacturer price for the covered drug for the previous quarter. Authorizes the Secretary to audit the relevant records of the manufacturer or of any wholesaler that distributes a covered drug. Requires all information obtained by the Secretary from manufacturer reports or audits to remain confidential, with the exception of allowing the Comptroller General to review the information provided.