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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3245 Introduced in Senate (IS)]

<DOC>

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.

    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 ``Ensuring Accurate Payments to 
Specialty Pharmacies Act''.

SEC. 2. ENSURING ACCURATE PAYMENTS TO PHARMACIES UNDER MEDICAID.

    (a) In General.--Section 1927(f) of the Social Security Act (42 
U.S.C. 1396r-8(f)) is amended--
            (1) by redesignating paragraphs (2) through (4) as 
        paragraphs (3), (4), and (6), respectively;
            (2) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) Determining applicable non-retail pharmacy actual 
        acquisition costs.--
                    ``(A) In general.--The Secretary shall conduct a 
                survey of applicable non-retail pharmacy drug prices to 
                determine national average drug acquisition cost 
                benchmarks. In conducting such survey, the Secretary 
                may contract services for--
                            ``(i) the determination of survey prices, 
                        separate from the survey prices described in 
                        paragraph (1)(A)(i), of the applicable non-
                        retail national average drug acquisition cost 
                        for covered outpatient drugs that represent a 
                        nationwide average of consumer purchase prices 
                        for such drugs, net of all discounts and 
                        rebates (to the extent any information with 
                        respect to such discounts and rebates is 
                        available) based on a monthly survey of 
                        applicable non-retail pharmacies; and
                            ``(ii) at the discretion of the Secretary, 
                        for each type of applicable non-retail pharmacy 
                        (as identified pursuant to the type indicators 
                        established by the Secretary under subsection 
                        (k)(12)(B)(ii)), the determination of survey 
                        prices, separate from the survey prices 
                        described in paragraph (1)(A)(i) or clause (i) 
                        of this subparagraph, of the national average 
                        drug acquisition cost for such type of pharmacy 
                        for covered outpatient drugs that represent a 
                        nationwide average of consumer purchase prices 
                        for such drugs, net of all discounts and 
                        rebates (to the extent any information with 
                        respect to such discounts and rebates is 
                        available) based on a monthly survey of such 
                        pharmacies.
                    ``(B) Application of requirements.--Subparagraphs 
                (C), (D), and (E) of paragraph (1) shall apply to 
                surveys of non-retail pharmacy drug prices conducted 
                under this paragraph in the same manner as such 
                subparagraphs apply to surveys of retail pharmacy drug 
                prices conducted under subparagraph (1).
                    ``(C) Additional requirement.--In addition to the 
                terms and conditions identified in paragraph (1)(D), 
                and such other terms and conditions as the Secretary 
                shall specify, a contract with a vendor under this 
                paragraph shall require that the vendor must 
                differentiate, in collecting and reporting survey data, 
                the relevant pharmacy type indicator for all cost 
                information collected, including whether a pharmacy is 
                owned by, operated by, or otherwise affiliated with a 
                pharmacy benefit manager and whether a pharmacy is an 
                applicable non-retail pharmacy, and, in the case of an 
                applicable non-retail pharmacy, which type of 
                applicable non-retail pharmacy (as identified pursuant 
                to the type indicators established by the Secretary 
                under subsection (k)(12)(B)(ii)) it is.
                    ``(D) Survey reporting.--In order to meet the 
                requirement of section 1902(a)(54), a State shall 
                require that any applicable non-retail 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, reimbursement, administrative 
                fee, discount, or rebate is received from the State or 
                a managed care entity or other specified entity (as 
                such terms are defined in section 1903(m)(9)(D)) 
                directly or from a pharmacy benefit manager or another 
                entity that has a contract with the State or a managed 
                care entity or other specified entity (as so defined), 
                shall respond to surveys conducted under this 
                paragraph.
                    ``(E) 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 to the 
                        survey including a list of applicable non-
                        retail pharmacies not in compliance with 
                        subparagraph (D).
                            ``(ii) The sampling frame and number of 
                        applicable non-retail pharmacies sampled 
                        monthly.
                            ``(iii) Information on price concessions to 
                        applicable non-retail pharmacies, including 
                        discounts, rebates, and other price 
                        concessions, to the extent that such 
                        information may be publicly released and has 
                        been collected by the Secretary as part of the 
                        survey.
                    ``(F) Penalties.--The Secretary, in consultation 
                with the Office of the Inspector General of the 
                Department of Health and Human Services, shall enforce 
                the provisions of this paragraph with respect to an 
                applicable non-retail pharmacy through the 
                establishment of appropriate civil monetary penalties, 
                which may be assessed with respect to each violation or 
                survey non-response, and with respect to each non-
                compliant applicable non-retail pharmacy (including a 
                pharmacy that is part of a chain), until compliance 
                with this paragraph has been completed. The provisions 
                of section 1128A (other than subsections (a) and (b)) 
                shall apply to a civil money penalty under the 
                preceding sentence in the same manner as such 
                provisions apply to a civil money penalty or proceeding 
                under section 1128A(a).
                    ``(G) Limitation on use of applicable non-retail 
                pharmacy pricing information.--No State shall use 
                pricing information reported by applicable non-retail 
                pharmacies under subparagraph (A) to develop or inform 
                reimbursement rates for retail community pharmacies.'';
            (3) in paragraph (3), as so redesignated--
                    (A) in subparagraph (A), by inserting ``, including 
                payment rates under managed care entities or other 
                specified entities (as such terms are defined in 
                section 1903(m)(9)(D)),'' after ``under this title''; 
                and
                    (B) in subparagraph (B), by inserting ``and the 
                basis for such dispensing fees'' before the semicolon;
            (4) by inserting after paragraph (4), as so redesignated, 
        the following new paragraph:
            ``(5) Oversight.--
                    ``(A) In general.--The Inspector General of the 
                Department of Health and Human Services shall conduct 
                periodic studies of the survey data reported under this 
                subsection, as appropriate, including with respect to 
                substantial variations in acquisition costs or other 
                applicable costs, as well as with respect to how 
                internal transfer prices and related party transactions 
                may influence the costs reported by pharmacies 
                affiliated with pharmacy benefit managers, wholesalers, 
                distributors, and other entities that acquire covered 
                outpatient drugs relative to costs reported by 
                pharmacies not affiliated with such entities. The 
                Inspector General shall provide periodic updates to 
                Congress on the results of such studies, as 
                appropriate, in a manner that does not disclose trade 
                secrets or other proprietary information.
                    ``(B) Appropriation.--There is appropriated to the 
                Inspector General of the Department of Health and Human 
                Services, out of any money in the Treasury not 
                otherwise appropriated, $5,000,000 for fiscal year 
                2024, to remain available until expended, to carry out 
                this paragraph.''; and
            (5) in paragraph (6), as so redesignated, by inserting ``, 
        and $9,000,000 for fiscal year 2024 and each fiscal year 
        thereafter,'' after ``2010''.
    (b) Definitions.--Section 1927(k) of the Social Security Act (42 
U.S.C. 1396r-8(k)) is amended by adding the following--
            ``(12) Applicable non-retail pharmacy.--
                    ``(A) In general.--The term `applicable non-retail 
                pharmacy' means a pharmacy that is licensed as a 
                pharmacy by the State and that is not a retail 
                community pharmacy, including a pharmacy that dispenses 
                prescription medications to patients primarily through 
                mail and specialty pharmacies. Such term does not 
                include nursing home pharmacies, long-term care 
                facility pharmacies, hospital pharmacies, clinics, 
                charitable or not-for-profit pharmacies, government 
                pharmacies, or low dispensing pharmacies (as defined by 
                the Secretary).
                    ``(B) Identification of applicable non-retail 
                pharmacies.--
                            ``(i) In general.--For purposes of 
                        subsection (f), the Secretary shall, not later 
                        than January 1, 2026, in consultation with 
                        stakeholders as appropriate, issue guidance 
                        specifying pharmacies that meet the definition 
                        of applicable non-retail pharmacies and that 
                        will, beginning January 1, 2027, be subject to 
                        the survey requirements under subsection 
                        (f)(2).
                            ``(ii) Inclusion of pharmacy type 
                        indicators.--The guidance promulgated under 
                        clause (i) shall include pharmacy type 
                        indicators to distinguish between different 
                        types of applicable non-retail pharmacies, such 
                        as pharmacies that dispense prescriptions 
                        primarily through the mail and pharmacies that 
                        dispense prescriptions that require special 
                        handling or distribution. An applicable non-
                        retail pharmacy may be identified through 
                        multiple pharmacy type indicators.
            ``(13) Pharmacy benefit manager.--The term `pharmacy 
        benefit manager' means any person or entity that, either 
        directly or through an intermediary, acts as a price negotiator 
        or group purchaser on behalf of a State, managed care entity or 
        other specified entity (as such terms are defined in section 
        1903(m)(9)(D)), or manages the prescription drug benefits 
        provided by such State, managed care entity, or other specified 
        entity, including the processing and payment of claims for 
        prescription drugs, the performance of drug utilization review, 
        the processing of drug prior authorization requests, the 
        managing of appeals or grievances related to the prescription 
        drug benefits, contracting with pharmacies, controlling the 
        cost of covered outpatient drugs, or the provision of services 
        related thereto. Such term includes any person or entity that 
        carries out 1 or more of the activities described in the 
        preceding sentence, irrespective of whether such person or 
        entity calls itself a `pharmacy benefit manager'.''.
    (c) Effective Date.--The amendments made by this section 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>
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