II 

118TH CONGRESS 

2D SESSION S. 4204 

To amend title XIX of the Social Security Act to codify value-based purchasing arrangements under the Medicaid program and reforms related 

to price reporting under such arrangements, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 30, 2024 

Mr. MULLIN (for himself, Ms. SINEMA, Mr. SCOTT of South Carolina, and Ms. 

HASSAN) introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend title XIX of the Social Security Act to codify 

value-based purchasing arrangements under the Medicaid 

program and reforms related to price reporting under 

such arrangements, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Medicaid VBPs for 

5 Patients Act’’ or the ‘‘MVP Act’’. 


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1 SEC. 2. CODIFYING VALUE-BASED PURCHASING ARRANGE2 MENTS UNDER MEDICAID AND REFORMS RE3 LATED TO PRICE REPORTING UNDER SUCH 

4 ARRANGEMENTS. 

5 (a) CODIFYING MULTIPLE BEST PRICE POINTS.— 

6 (1) IN GENERAL.—Section 1927(c)(1)(C)(ii) of 

7 the Social Security Act (42 U.S.C. 1396r– 

8 8(c)(1)(C)(ii)) is amended— 

9 (A) in subclause (IV), by striking ‘‘and’’ at 

10 the end; 

11 (B) in subclause (V), by striking the period 

12 and inserting ‘‘; and’’; and 

13 (C) by adding at the end the following new 

14 subclause: 

15 ‘‘(VI) may include multiple best 

16 price points for a single dosage form 

17 and strength of a drug of a manufac18 turer subject to a value-based pur19 chasing arrangement (as defined in 

20 subsection (k)(12)), but only if such 

21 manufacturer offers such arrangement 

22 to all States.’’. 

23 (2) RULE OF CONSTRUCTION.—Nothing in the 

24 amendments made by this subsection may be con25 strued to prohibit a manufacturer from treating a 


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1 value-based purchasing arrangement as a bundled 

2 sale. 

3 (b) DEFINITION OF AVERAGE MANUFACTURER

4 PRICE.— 

5 (1) IN GENERAL.—Section 1927(k)(1) of the 

6 Social Security Act (42 U.S.C. 1396r–8(k)(1)) is 

7 amended— 

8 (A) in subparagraph (B)(i)— 

9 (i) in subclause (VII), by striking at 

10 the end ‘‘and’’; 

11 (ii) in subclause (VIII), by striking 

12 the period at the end and inserting ‘‘; 

13 and’’; and 

14 (iii) by adding at the end the fol15 lowing new subclause: 

16 ‘‘(IX) with respect to a covered 

17 outpatient drug that is sold under a 

18 value-based purchasing arrangement 

19 (as defined in paragraph (12)) during 

20 the rebate period, including such a 

21 drug that is an inhalation, infusion, 

22 instilled, implanted, or injectable drug 

23 that is not generally dispensed 

24 through a retail community phar25 macy— 


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1 ‘‘(aa) a refund, rebate, reim2 bursement, or free goods from 

3 the manufacturer or third party 

4 on behalf of the manufacturer; or 

5 ‘‘(bb) the withholding or re6 duction of a payment to the man7 ufacturer or third party on behalf 

8 of the manufacturer; 

9 that is triggered by a patient who 

10 fails to achieve outcomes or measures 

11 defined under the terms of such value12 based purchasing arrangement during 

13 the period for which such arrange14 ment is effective.’’; and 

15 (B) by adding at the end the following new 

16 subparagraph: 

17 ‘‘(D) SPECIAL RULE FOR CERTAIN VALUE18 BASED PURCHASING ARRANGEMENTS.—For 

19 purposes of subparagraph (A), in determining 

20 the average price paid to a manufacturer for a 

21 covered outpatient drug that is sold under a 

22 value-based purchasing arrangement (as defined 

23 in paragraph (12)) that provides that payment 

24 for such drug is made in installments over the 

25 course of such arrangement, such price shall be 


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1 determined as if the aggregate price per the 

2 terms of the arrangement were paid in full in 

3 the first installment during the rebate period.’’. 

4 (2) RULEMAKING.—Not later than 180 days 

5 after the date of the enactment of this Act, the Sec6 retary of Health and Human Services shall imple7 ment the amendments made by this subsection 

8 through rulemaking. 

9 (c) DEFINITION OF VALUE-BASED PURCHASING AR10 RANGEMENT.—Section 1927(k) of the Social Security Act 

11 (42 U.S.C. 1396r–8(k)) is amended by adding at the end 

12 the following paragraph: 

13 ‘‘(12) VALUE-BASED PURCHASING ARRANGE14 MENT.—The term ‘value-based purchasing arrange15 ment’ has the meaning given such term in section 

16 447.502 of title 42, Code of Federal Regulations (or 

17 any successor regulation).’’. 

18 SEC. 3. CALCULATION OF AVERAGE SALES PRICE UNDER 

19 MEDICARE. 

20 Section 1847A(c)(3) of the Social Security Act (42 

21 U.S.C. 1395w–3a(c)(3)) is amended— 

22 (1) by striking ‘‘In calculating’’ and inserting 

23 the following: 

24 ‘‘(A) IN GENERAL.—Subject to subpara25 graph (B), in calculating’’; and 


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1 (2) by adding at the end the following new sub2 paragraph: 

3 ‘‘(B) CERTAIN REMUNERATION UNDER

4 VALUE-BASED PURCHASING ARRANGEMENTS

5 EXCLUDED.—In calculating the manufacturer’s 

6 average sales price under this subsection for a 

7 drug or biological that is sold under a value8 based purchasing arrangement (as defined in 

9 section 1927(k)(12)) and with respect to which 

10 the manufacturer of such drug or biological has 

11 elected to include multiple best price points (as 

12 described in section 1927(c)(1)(C)(ii)(VI)) in 

13 reporting the best price of such drug under sec14 tion 1927(b), such manufacturer’s average sales 

15 price shall not include any amount that is ex16 cluded from the calculation of the average man17 ufacturer price of such drug or biological under 

18 section 1927(k)(1)(B)(i)(IX).’’. 

19 SEC. 4. GUIDANCE ON VALUE-BASED PURCHASING AR20 RANGEMENTS FOR INPATIENT DRUGS UNDER 

21 MEDICAID. 

22 Not later than 180 days after the date of the enact23 ment of this Act, the Secretary of Health and Human 

24 Services shall issue guidance to State Medicaid agencies 

25 on the option of entering into a value-based purchasing 


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1 arrangement (as defined in section 1927(k)(12) of the So2 cial Security Act (42 U.S.C. 1396r–8(k)(12))) with manu3 facturers for drugs or biological products provided as part 

4 of, or as incident to and in the same setting as, inpatient 

5 hospital services furnished under a State plan under title 

6 XIX of the Social Security Act (42 U.S.C. 1396 et seq.), 

7 or under a waiver of such plan, where such drugs or bio8 logical products are reimbursed directly and not paid for 

9 as part of payment for such inpatient hospital services, 

10 including guidance on how multiple States may enter into 

11 agreements with one another and with manufacturers 

12 which permit the transfer of funds between the partici13 pating States so that individuals who reside in a State 

14 different from the State in which they receive a drug sub15 ject to a value-based purchasing arrangement as an inpa16 tient may be treated as if they received such drug in the 

17 State in which they reside. 

18 SEC. 5. EXCEPTION UNDER THE ANTIKICKBACK STATUTE. 

19 (a) IN GENERAL.—Section 1128B(b)(3) of the Social 

20 Security Act (42 U.S.C. 1320a–7b(b)(3)) is amended— 

21 (1) in subparagraph (J), by moving the left 

22 margin of such subparagraph 2 ems to the left; 

23 (2) in subparagraph (K)— 

24 (A) by moving the left margin of such sub25 paragraph 2 ems to the left; and 


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1 (B) by striking ‘‘and’’ at the end; 

2 (3) in subparagraph (L)(iii), by striking the pe3 riod and inserting ‘‘; and’’; and 

4 (4) by adding at the end the following new sub5 paragraph: 

6 ‘‘(M) any remuneration provided by a 

7 manufacturer or third party on behalf of a 

8 manufacturer to a State under a value-based 

9 purchasing arrangement (as defined in section 

10 1927(k)(12)) under a State plan under title 

11 XIX (or waiver of such plan) in the case a pa12 tient fails to achieve outcomes or measures de13 fined in such arrangement following the admin14 istration of a covered outpatient drug (as de15 fined in section 1927(k)(2)).’’. 

16 (b) RULEMAKING.—Not later than 180 days after the 

17 date of the enactment of this Act, the Inspector General 

18 of the Department of Health and Human Services shall 

19 through rulemaking implement the amendments made by 

20 this section. 

21 SEC. 6. GAO STUDY AND REPORT ON USE OF VALUE-BASED 

22 PURCHASING ARRANGEMENTS. 

23 (a) STUDY.—The Comptroller General of the United 

24 States shall conduct a study on the extent to which value25 based purchasing arrangements (as defined in section 


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1 1927(k)(12)) of the Social Security Act (42 U.S.C. 

2 1396r–8(k)(12)) facilitate patient access to covered out3 patient drugs, improve patient outcomes, lower overall 

4 health system costs, and lower costs for patients in Fed5 eral health care programs. In conducting such study, the 

6 Comptroller General shall— 

7 (1) study the impact of this Act on— 

8 (A) access to transformative therapies, in9 cluding rare disease gene therapies, generally; 

10 (B) mitigating socioeconomic disparities in 

11 accessing covered outpatient drugs sold under 

12 value-based purchasing arrangements through 

13 its requirement that State Medicaid programs 

14 have access to the same value-based purchasing 

15 arrangement pricing structure that are available 

16 in the commercial market for such drugs; 

17 (C) the Medicaid drug rebate program 

18 under section 1927 of the Social Security Act 

19 (42 U.S.C. 1396r–8), the 340B drug pricing 

20 program under section 340B of the Public 

21 Health Service Act (42 U.S.C. 256b), and part 

22 B of title XVIII of the Social Security Act (42 

23 U.S.C. 1395j et seq.), including compliance 

24 with such programs; 


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1 (D) expenditures under State Medicaid 

2 programs; and 

3 (E) prices for such drugs under the Med4 icaid program in States that do not enter into 

5 such arrangements; 

6 (2) analyze all the types of value-based pur7 chasing arrangement pricing structures, which struc8 tures are working well (as measured by price and 

9 ease of implementing), and which need improvement; 

10 and 

11 (3) study the potential long-term savings for 

12 States that enter into such arrangements under 

13 State Medicaid programs. 

14 (b) REPORT.—Not later than June 30, 2028, the 

15 Comptroller General of the United States shall submit to 

16 Congress a report containing the results of the study con17 ducted under subsection (a). 

Æ 


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