,i #aafth ,,congress #ast ,session ,h4 ,r4 #ebha ,,in ,,the ,,house ,,of ,,representatives ,december #c1 #bjai,mr4 ,carter of ,georgia 7for himself and ,mr4 ,crdenas7 introduced the following bill2 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 program4 #a4 ,short title ,this ,act may be cited as the ,drug ,price ,transparency in ,medicaid ,act of #bjai4 #b4 ,improving transparency and preventing the use of abusive spread pricing and related practices in ,medicaid 7a7 ,pass-,through pricing required 7#a7 ,in general ,section #aibg7;e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;e77 is amended by adding at the end the following3 7#f7 ,pass-through pricing required ,a contract between the ,state and a pharmacy benefit manager 7referred to in this paragraph as a ,,pbm71 or a contract between the ,state and a managed care entity or other specified entity 7as such terms are defined in section #aijc7m77#i77;,d77 that includes provisions making the entity responsible for coverage of covered outpatient drugs dispensed to individuals enrolled with the entity1 shall require that payment for such drugs and related administrative services 7as applicable71 including payments made by a ,,pbm on behalf of the ,state or entity1 is based on a pass-through pricing model under which-- 7,a7 any payment made by the entity or the ,,pbm 7as applicable7 for such a drug-- 7i7 is limited to-- 7,i7 ingredient cost2 and 7,,ii7 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 directly2 7ii7 is passed through in its entirety by the entity or ,,pbm to the pharmacy that dispenses the drug2 and 7iii7 is made in a manner that is consistent with section #aijb7;a77#cj77;,a7 and sections #ddg4eab1 #ddg4ead1 and #ddg4eah of title #db1 ,code of ,federal ,regulations 7or any successor regulation7 as if such requirements applied directly to the entity or the ,,pbm2 7,b7 payment to the entity or the ,,pbm 7as applicable7 for administrative services performed by the entity or ,,pbm is limited to a reasonable administrative fee that covers the reasonable cost of providing such services2 7,c7 the entity or the ,,pbm 7as applicable7 shall make available to the ,state1 and the ,secretary upon request1 all costs and payments related to covered outpatient drugs and accompanying administrative services incurred1 received1 or made by the entity or the ,,pbm1 including ingredient costs1 professional dispensing fees1 administrative fees1 post-sale and post-invoice fees1 discounts1 or related adjustments such as direct and indirect remuneration fees1 and any and all other remuneration2 and 7,d7 any form of spread pricing whereby any amount charged or claimed by the entity or the ,,pbm 7as applicable7 is in excess of the amount paid to the pharmacies on behalf of the entity1 including any post-sale or post-invoice fees1 discounts1 or related adjustments such as direct and indirect remuneration fees or assessments 7after allowing for a reasonable administrative fee as described in subparagraph 7,b77 is not allowable for purposes of claiming ,federal matching payments under this title4 4 7#b7 ,conforming amendment ,section #aijc7m77#b77;,a77xiii7 of such ,act 7#db ,u4,s4,c4 #acif;b7m77#b77;,a77xiii77 is amended-- 7,a7 by striking and 7,,iii7 and inserting 7,,iii72 7,b7 by inserting before the period at the end the following3 1 and 7,,iv7 pharmacy benefit management services provided by the entity1 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 manager1 shall comply with the requirements of section #aibg7;e77#f72 and 7,c7 by moving the left margin #b ems to the left4 7#c7 ,effective date ,the amendments made by this subsection apply to contracts between ,states and managed care entities1 other specified entities1 or pharmacy benefits managers that are entered into or renewed on or after the date that is #ah months after the date of enactment of this ,act4 7b7 ,survey of retail prices 7#a7 ,in general ,section #aibg7;f7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acifr-#h7;f77 is amended-- 7,a7 by striking and after the semicolon at the end of paragraph 7#a77;,a77i7 and all that precedes it through 7#a7 and inserting the following3 7#a7 ,survey of retail prices ,the ,secretary shall conduct a survey of retail community drug prices1 to include at least the national average drug acquisition cost1 as follows3 7,a7 ,use of vendor ,the ,secretary may contract services for-- 7i7 with respect to retail community pharmacies1 the determination on a monthly basis of retail survey prices of the national average drug acquisition cost for covered outpatient drugs for such pharmacies1 net of all discounts and rebates 7to the extent any information with respect to such discounts and rebates is available71 the average reimbursement received for such drugs by such pharmacies from all sources of payment1 including third parties1 and1 to the extent available1 the usual and customary charges to consumers for such drugs2 and 2 7,b7 by adding at the end of paragraph 7#a7 the following3 7,f7 ,survey reporting ,in order to meet the requirement of section #aijb7;a77#ed71 a ,state shall require that any retail community pharmacy in the ,state that receives any payment1 administrative fee1 discount1 or rebate related to the dispensing of covered outpatient drugs to individuals receiving benefits under this title1 regardless of whether such payment1 fee1 discount1 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 entity1 shall respond to surveys of retail prices conducted under this subsection4 7,g7 ,survey information ,information on retail community prices obtained under this paragraph shall be made publicly available and shall include at least the following3 7i7 ,the monthly response rate of the survey including a list of pharmacies not in compliance with subparagraph 7,f74 7ii7 ,the sampling frame and number of pharmacies sampled monthly4 7iii7 ,characteristics of reporting pharmacies1 including type 7such as independent or chain71 geographic or regional location1 and dispensing volume4 7iv7 ,reporting of a separate national average drug acquisition cost for each drug for independent retail pharmacies and chain operated pharmacies4 7v7 ,information on price concessions including on and off invoice discounts1 rebates1 and other price concessions4 7vi7 ,information on average professional dispensing fees paid4 7,h7 ,report on specialty pharmacies 7i7 ,in general ,not later than #a year after the effective date of this subparagraph1 the ,secretary shall submit a report to ,congress examining specialty drug coverage and reimbursement under this title4 7ii7 ,content of report ,such report shall include a description of how ,state ,medicaid programs define specialty drugs1 how much ,state ,medicaid programs pay for specialty drugs1 how ,states and managed care plans determine payment for specialty drugs1 the settings in which specialty drugs are dispensed 7such as retail community pharmacies or specialty pharmacies71 whether acquisition costs for specialty drugs are captured in the national average drug acquisition cost survey1 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 defined4 2 7,c7 in paragraph 7#b7-- 7i7 in subparagraph 7,a71 by inserting 1 including payments rates under ,medicaid managed care plans1 after under this title2 and 7ii7 in subparagraph 7,b71 by inserting and the basis for such dispensing fees before the semicolon2 and 7,d7 in paragraph 7#d71 by inserting 1 and #e1jjj1jjj for fiscal year #bjbj and each fiscal year thereafter1 after #bjaj4 7#b7 ,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 #ah months after the date of enactment of this ,act4