Drug Price Transparency in Medicaid Act of 2023
This bill requires pass-through pricing models, and prohibits spread-pricing, for payment arrangements with pharmacy benefit managers under Medicaid. The bill also extends funding for retail pharmacy surveys and requires additional information with respect to price concessions and survey participation to be made publicly available.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1613 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 1613
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
March 17, 2023
Mr. Carter of Georgia (for himself, Mr. Vicente Gonzalez of Texas, Ms.
Stefanik, Ms. Ross, Mr. Allen, and Mr. Auchincloss) 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 2023''.
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 clause
(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.''.
(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; 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 national
drug 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) Information on price concessions to
the pharmacy, including discounts, rebates, and
other price concessions, to the extent that
such information is available during the survey
period.
``(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 and
specialty pharmacies, 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),
to what extent acquisition costs for specialty
drugs are captured in the national average drug
acquisition cost survey or through another
process, examples of specialty drug dispensing
fees to support the services associated with
dispensing specialty drugs, 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 2025 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.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Energy and Commerce.
Referred to the Subcommittee on Health.
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