II 

118TH CONGRESS 

1ST SESSION S. 3245 

To amend title XIX of the Social Security Act to require the Secretary 

of Health and Human Services to conduct surveys of non-retail pharmacy 

drug prices, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 7, 2023 

Mr. WARNER (for himself and Mr. CASSIDY) 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 require 

the Secretary of Health and Human Services to conduct 

surveys of non-retail pharmacy drug prices, 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 ‘‘Ensuring Accurate 

5 Payments to Specialty Pharmacies Act’’. 


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1 SEC. 2. ENSURING ACCURATE PAYMENTS TO PHARMACIES 

2 UNDER MEDICAID. 

3 (a) IN GENERAL.—Section 1927(f) of the Social Se4 curity Act (42 U.S.C. 1396r–8(f)) is amended— 

5 (1) by redesignating paragraphs (2) through 

6 (4) as paragraphs (3), (4), and (6), respectively; 

7 (2) by inserting after paragraph (1) the fol8 lowing new paragraph: 

9 ‘‘(2) DETERMINING APPLICABLE NON-RETAIL

10 PHARMACY ACTUAL ACQUISITION COSTS.— 

11 ‘‘(A) IN GENERAL.—The Secretary shall 

12 conduct a survey of applicable non-retail phar13 macy drug prices to determine national average 

14 drug acquisition cost benchmarks. In con15 ducting such survey, the Secretary may con16 tract services for— 

17 ‘‘(i) the determination of survey 

18 prices, separate from the survey prices de19 scribed in paragraph (1)(A)(i), of the ap20 plicable non-retail national average drug 

21 acquisition cost for covered outpatient 

22 drugs that represent a nationwide average 

23 of consumer purchase prices for such 

24 drugs, net of all discounts and rebates (to 

25 the extent any information with respect to 

26 such discounts and rebates is available) 


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1 based on a monthly survey of applicable 

2 non-retail pharmacies; and 

3 ‘‘(ii) at the discretion of the Sec4 retary, for each type of applicable non-re5 tail pharmacy (as identified pursuant to 

6 the type indicators established by the Sec7 retary under subsection (k)(12)(B)(ii)), the 

8 determination of survey prices, separate 

9 from the survey prices described in para10 graph (1)(A)(i) or clause (i) of this sub11 paragraph, of the national average drug 

12 acquisition cost for such type of pharmacy 

13 for covered outpatient drugs that represent 

14 a nationwide average of consumer purchase 

15 prices for such drugs, net of all discounts 

16 and rebates (to the extent any information 

17 with respect to such discounts and rebates 

18 is available) based on a monthly survey of 

19 such pharmacies. 

20 ‘‘(B) APPLICATION OF REQUIREMENTS.— 

21 Subparagraphs (C), (D), and (E) of paragraph 

22 (1) shall apply to surveys of non-retail phar23 macy drug prices conducted under this para24 graph in the same manner as such subparaVerDate Sep 11 2014 22:15 Nov 14, 2023 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3245.IS S3245

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1 graphs apply to surveys of retail pharmacy drug 

2 prices conducted under subparagraph (1). 

3 ‘‘(C) ADDITIONAL REQUIREMENT.—In ad4 dition to the terms and conditions identified in 

5 paragraph (1)(D), and such other terms and 

6 conditions as the Secretary shall specify, a con7 tract with a vendor under this paragraph shall 

8 require that the vendor must differentiate, in 

9 collecting and reporting survey data, the rel10 evant pharmacy type indicator for all cost infor11 mation collected, including whether a pharmacy 

12 is owned by, operated by, or otherwise affiliated 

13 with a pharmacy benefit manager and whether 

14 a pharmacy is an applicable non-retail phar15 macy, and, in the case of an applicable non-re16 tail pharmacy, which type of applicable non-re17 tail pharmacy (as identified pursuant to the 

18 type indicators established by the Secretary 

19 under subsection (k)(12)(B)(ii)) it is. 

20 ‘‘(D) SURVEY REPORTING.—In order to 

21 meet the requirement of section 1902(a)(54), a 

22 State shall require that any applicable non-re23 tail pharmacy in the State that receives any 

24 payment, reimbursement, administrative fee, 

25 discount, or rebate related to the dispensing of 


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1 covered outpatient drugs to individuals receiv2 ing benefits under this title, regardless of 

3 whether such payment, reimbursement, admin4 istrative fee, discount, or rebate is received 

5 from the State or a managed care entity or 

6 other specified entity (as such terms are defined 

7 in section 1903(m)(9)(D)) directly or from a 

8 pharmacy benefit manager or another entity 

9 that has a contract with the State or a man10 aged care entity or other specified entity (as so 

11 defined), shall respond to surveys conducted 

12 under this paragraph. 

13 ‘‘(E) SURVEY INFORMATION.—Information 

14 on national drug acquisition prices obtained 

15 under this paragraph shall be made publicly 

16 available and shall include at least the fol17 lowing: 

18 ‘‘(i) The monthly response rate to the 

19 survey including a list of applicable non-re20 tail pharmacies not in compliance with 

21 subparagraph (D). 

22 ‘‘(ii) The sampling frame and number 

23 of applicable non-retail pharmacies sam24 pled monthly. 


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1 ‘‘(iii) Information on price concessions 

2 to applicable non-retail pharmacies, includ3 ing discounts, rebates, and other price con4 cessions, to the extent that such informa5 tion may be publicly released and has been 

6 collected by the Secretary as part of the 

7 survey. 

8 ‘‘(F) PENALTIES.—The Secretary, in con9 sultation with the Office of the Inspector Gen10 eral of the Department of Health and Human 

11 Services, shall enforce the provisions of this 

12 paragraph with respect to an applicable non-re13 tail pharmacy through the establishment of ap14 propriate civil monetary penalties, which may 

15 be assessed with respect to each violation or 

16 survey non-response, and with respect to each 

17 non-compliant applicable non-retail pharmacy 

18 (including a pharmacy that is part of a chain), 

19 until compliance with this paragraph has been 

20 completed. The provisions of section 1128A 

21 (other than subsections (a) and (b)) shall apply 

22 to a civil money penalty under the preceding 

23 sentence in the same manner as such provisions 

24 apply to a civil money penalty or proceeding 

25 under section 1128A(a). 


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1 ‘‘(G) LIMITATION ON USE OF APPLICABLE

2 NON-RETAIL PHARMACY PRICING INFORMA3 TION.—No State shall use pricing information 

4 reported by applicable non-retail pharmacies 

5 under subparagraph (A) to develop or inform 

6 reimbursement rates for retail community phar7 macies.’’; 

8 (3) in paragraph (3), as so redesignated— 

9 (A) in subparagraph (A), by inserting ‘‘, 

10 including payment rates under managed care 

11 entities or other specified entities (as such 

12 terms are defined in section 1903(m)(9)(D)),’’ 

13 after ‘‘under this title’’; and 

14 (B) in subparagraph (B), by inserting 

15 ‘‘and the basis for such dispensing fees’’ before 

16 the semicolon; 

17 (4) by inserting after paragraph (4), as so re18 designated, the following new paragraph: 

19 ‘‘(5) OVERSIGHT.— 

20 ‘‘(A) IN GENERAL.—The Inspector General 

21 of the Department of Health and Human Serv22 ices shall conduct periodic studies of the survey 

23 data reported under this subsection, as appro24 priate, including with respect to substantial 

25 variations in acquisition costs or other applicaVerDate Sep 11 2014 22:15 Nov 14, 2023 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3245.IS S3245

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1 ble costs, as well as with respect to how internal 

2 transfer prices and related party transactions 

3 may influence the costs reported by pharmacies 

4 affiliated with pharmacy benefit managers, 

5 wholesalers, distributors, and other entities that 

6 acquire covered outpatient drugs relative to 

7 costs reported by pharmacies not affiliated with 

8 such entities. The Inspector General shall pro9 vide periodic updates to Congress on the results 

10 of such studies, as appropriate, in a manner 

11 that does not disclose trade secrets or other 

12 proprietary information. 

13 ‘‘(B) APPROPRIATION.—There is appro14 priated to the Inspector General of the Depart15 ment of Health and Human Services, out of 

16 any money in the Treasury not otherwise ap17 propriated, $5,000,000 for fiscal year 2024, to 

18 remain available until expended, to carry out 

19 this paragraph.’’; and 

20 (5) in paragraph (6), as so redesignated, by in21 serting ‘‘, and $9,000,000 for fiscal year 2024 and 

22 each fiscal year thereafter,’’ after ‘‘2010’’. 

23 (b) DEFINITIONS.—Section 1927(k) of the Social Se24 curity Act (42 U.S.C. 1396r–8(k)) is amended by adding 

25 the following— 


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1 ‘‘(12) APPLICABLE NON-RETAIL PHARMACY.— 

2 ‘‘(A) IN GENERAL.—The term ‘applicable 

3 non-retail pharmacy’ means a pharmacy that is 

4 licensed as a pharmacy by the State and that 

5 is not a retail community pharmacy, including 

6 a pharmacy that dispenses prescription medica7 tions to patients primarily through mail and 

8 specialty pharmacies. Such term does not in9 clude nursing home pharmacies, long-term care 

10 facility pharmacies, hospital pharmacies, clinics, 

11 charitable or not-for-profit pharmacies, govern12 ment pharmacies, or low dispensing pharmacies 

13 (as defined by the Secretary). 

14 ‘‘(B) IDENTIFICATION OF APPLICABLE

15 NON-RETAIL PHARMACIES.— 

16 ‘‘(i) IN GENERAL.—For purposes of 

17 subsection (f), the Secretary shall, not 

18 later than January 1, 2026, in consulta19 tion with stakeholders as appropriate, issue 

20 guidance specifying pharmacies that meet 

21 the definition of applicable non-retail phar22 macies and that will, beginning January 1, 

23 2027, be subject to the survey require24 ments under subsection (f)(2). 


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1 ‘‘(ii) INCLUSION OF PHARMACY TYPE

2 INDICATORS.—The guidance promulgated 

3 under clause (i) shall include pharmacy 

4 type indicators to distinguish between dif5 ferent types of applicable non-retail phar6 macies, such as pharmacies that dispense 

7 prescriptions primarily through the mail 

8 and pharmacies that dispense prescriptions 

9 that require special handling or distribu10 tion. An applicable non-retail pharmacy 

11 may be identified through multiple phar12 macy type indicators. 

13 ‘‘(13) PHARMACY BENEFIT MANAGER.—The 

14 term ‘pharmacy benefit manager’ means any person 

15 or entity that, either directly or through an inter16 mediary, acts as a price negotiator or group pur17 chaser on behalf of a State, managed care entity or 

18 other specified entity (as such terms are defined in 

19 section 1903(m)(9)(D)), or manages the prescription 

20 drug benefits provided by such State, managed care 

21 entity, or other specified entity, including the proc22 essing and payment of claims for prescription drugs, 

23 the performance of drug utilization review, the proc24 essing of drug prior authorization requests, the man25 aging of appeals or grievances related to the preVerDate Sep 11 2014 22:15 Nov 14, 2023 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S3245.IS S3245

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1 scription drug benefits, contracting with pharmacies, 

2 controlling the cost of covered outpatient drugs, or 

3 the provision of services related thereto. Such term 

4 includes any person or entity that carries out 1 or 

5 more of the activities described in the preceding sen6 tence, irrespective of whether such person or entity 

7 calls itself a ‘pharmacy benefit manager’.’’. 

8 (c) EFFECTIVE DATE.—The amendments made by 

9 this section take effect on the first day of the first quarter 

10 that begins on or after the date that is 18 months after 

11 the date of enactment of this Act. 

Æ 


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