I 

117TH CONGRESS 

1ST SESSION H. R. 6101 

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 

DECEMBER 1, 2021 

Mr. CARTER of Georgia (for himself and Mr. VICENTE GONZALEZ of Texas) 

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. 

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 ‘‘Drug Price Trans5 parency in Medicaid Act of 2021’’. 

6 SEC. 2. IMPROVING TRANSPARENCY AND PREVENTING THE 

7 USE OF ABUSIVE SPREAD PRICING AND RE8 LATED PRACTICES IN MEDICAID. 

9 (a) PASS-THROUGH PRICING REQUIRED.— 


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1 (1) IN GENERAL.—Section 1927(e) of the So2 cial Security Act (42 U.S.C. 1396r–8(e)) is amended 

3 by adding at the end the following: 

4 ‘‘(6) PASS-THROUGH PRICING REQUIRED.—A 

5 contract between the State and a pharmacy benefit 

6 manager (referred to in this paragraph as a ‘PBM’), 

7 or a contract between the State and a managed care 

8 entity or other specified entity (as such terms are 

9 defined in section 1903(m)(9)(D)) that includes pro10 visions making the entity responsible for coverage of 

11 covered outpatient drugs dispensed to individuals en12 rolled with the entity, shall require that payment for 

13 such drugs and related administrative services (as 

14 applicable), including payments made by a PBM on 

15 behalf of the State or entity, is based on a pass16 through pricing model under which— 

17 ‘‘(A) any payment made by the entity or 

18 the PBM (as applicable) for such a drug— 

19 ‘‘(i) is limited to— 

20 ‘‘(I) ingredient cost; and 

21 ‘‘(II) a professional dispensing 

22 fee that is not less than the profes23 sional dispensing fee that the State 

24 plan or waiver would pay if the plan 


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1 or waiver was making the payment di2 rectly; 

3 ‘‘(ii) is passed through in its entirety 

4 by the entity or PBM to the pharmacy or 

5 provider that dispenses the drug; and 

6 ‘‘(iii) is made in a manner that is con7 sistent with section 1902(a)(30)(A) and 

8 sections 447.512, 447.514, and 447.518 of 

9 title 42, Code of Federal Regulations (or 

10 any successor regulation) as if such re11 quirements applied directly to the entity or 

12 the PBM, except that any payment by the 

13 entity or the PBM (as applicable) for the 

14 ingredient cost of a covered outpatient 

15 drug dispensed by providers and phar16 macies referenced in clauses (i) or (ii) of 

17 section 447.518(a)(1) of title 42, Code of 

18 Federal Regulations (or any successor reg19 ulation) shall be the same as the payment 

20 amount for the ingredient cost when dis21 pensed by providers and pharmacies not 

22 referenced in such clauses, and in no case 

23 shall payment for the ingredient cost of a 

24 covered outpatient drug be based on the 

25 actual acquisition cost of a drug dispensed 


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1 by providers and pharmacies referenced in 

2 such clauses or take into account a drug’s 

3 status as a drug purchased at a discounted 

4 price by a provider or pharmacy referenced 

5 in such clauses; 

6 ‘‘(B) payment to the entity or the PBM 

7 (as applicable) for administrative services per8 formed by the entity or PBM is limited to a 

9 reasonable administrative fee that covers the 

10 reasonable cost of providing such services; 

11 ‘‘(C) the entity or the PBM (as applicable) 

12 shall make available to the State, and the Sec13 retary upon request, all costs and payments re14 lated to covered outpatient drugs and accom15 panying administrative services incurred, re16 ceived, or made by the entity or the PBM, in17 cluding ingredient costs, professional dispensing 

18 fees, administrative fees, post-sale and post-in19 voice fees, discounts, or related adjustments 

20 such as direct and indirect remuneration fees, 

21 and any and all other remuneration; and 

22 ‘‘(D) any form of spread pricing whereby 

23 any amount charged or claimed by the entity or 

24 the PBM (as applicable) is in excess of the 

25 amount paid to the pharmacies on behalf of the 


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1 entity, including any post-sale or post-invoice 

2 fees, discounts, or related adjustments such as 

3 direct and indirect remuneration fees or assess4 ments (after allowing for a reasonable adminis5 trative fee as described in subparagraph (B)) is 

6 not allowable for purposes of claiming Federal 

7 matching payments under this title. 

8 ‘‘(7) PROTECTION AGAINST MANDATES RELAT9 ING TO USE OF 340B DRUGS.— 

10 ‘‘(A) IN GENERAL.—Notwithstanding any 

11 other provision of law, no State, Medicaid man12 aged care organization (as defined in section 

13 1903(m)(1)(A)), or pharmacy benefit manager 

14 may prohibit a covered entity under section 

15 340B of the Public Health Service Act, or a 

16 pharmacy under contract with a covered entity 

17 to dispense drugs on behalf of the covered enti18 ty, from dispensing covered outpatient drugs 

19 purchased under such section to individuals re20 ceiving benefits under this title and from receiv21 ing payment in accordance with this section, or 

22 require that such covered entity or pharmacy 

23 dispense covered outpatient drugs purchased 

24 under section 340B to such individuals. 


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1 ‘‘(B) NOTIFICATION.—The Secretary shall 

2 notify States that States may not prohibit a 

3 provider under this title that is a covered entity 

4 under section 340B of the Public Health Serv5 ices Act, or a pharmacy under contract with a 

6 covered entity, from submitting claims for reim7 bursement for drugs purchased under such sec8 tion that are dispensed to individuals receiving 

9 benefits under this title and may not require 

10 such provider to dispense covered outpatient 

11 drugs purchased under such section to such in12 dividuals.’’. 

13 (2) CONFORMING AMENDMENT.—Section 

14 1903(m)(2)(A)(xiii) of such Act (42 U.S.C. 

15 1396b(m)(2)(A)(xiii)) is amended— 

16 (A) by striking ‘‘and (III)’’ and inserting 

17 ‘‘(III)’’; 

18 (B) by inserting before the period at the 

19 end the following: ‘‘, and (IV) pharmacy benefit 

20 management services provided by the entity, or 

21 provided by a pharmacy benefit manager on be22 half of the entity under a contract or other ar23 rangement between the entity and the phar24 macy benefit manager, shall comply with the re25 quirements of section 1927(e)(6)’’; and 


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1 (C) by moving the left margin 2 ems to the 

2 left. 

3 (3) EFFECTIVE DATE.—The amendments made 

4 by this subsection apply to contracts between States 

5 and managed care entities, other specified entities, 

6 or pharmacy benefits managers that are entered into 

7 or renewed on or after the date that is 18 months 

8 after the date of enactment of this Act. 

9 (b) ENSURING ACCURATE PAYMENTS TO PHAR10 MACIES UNDER MEDICAID.— 

11 (1) IN GENERAL.—Section 1927(f) of the Social 

12 Security Act (42 U.S.C. 1396r–8(f)) is amended— 

13 (A) by striking ‘‘and’’ after the semicolon 

14 at the end of paragraph (1)(A)(i) and all that 

15 precedes it through ‘‘(1)’’ and inserting the fol16 lowing: 

17 ‘‘(1) DETERMINING PHARMACY ACTUAL ACQUI18 SITION COSTS.—The Secretary shall conduct a sur19 vey of retail community pharmacy drug prices to de20 termine the national average drug acquisition cost as 

21 follows: 

22 ‘‘(A) USE OF VENDOR.—The Secretary 

23 may contract services for— 

24 ‘‘(i) with respect to retail community 

25 pharmacies, the determination of retail 


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1 survey prices of the national average drug 

2 acquisition cost for covered outpatient 

3 drugs based on a monthly survey of such 

4 pharmacies, net of all discounts and re5 bates (to the extent any information with 

6 respect to such discounts and rebates is 

7 available); and’’; 

8 (B) by adding at the end of paragraph (1) 

9 the following: 

10 ‘‘(F) SURVEY REPORTING.—In order to 

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

12 State shall require that any retail community 

13 pharmacy in the State that receives any pay14 ment, reimbursement, administrative fee, dis15 count, or rebate related to the dispensing of 

16 covered outpatient drugs to individuals receiv17 ing benefits under this title, regardless of 

18 whether such payment, fee, discount, or rebate 

19 is received from the State or a managed care 

20 entity directly or from a pharmacy benefit man21 ager or another entity that has a contract with 

22 the State or a managed care entity, shall re23 spond to surveys of retail prices conducted 

24 under this subsection. 


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1 ‘‘(G) SURVEY INFORMATION.—Information 

2 on retail community actual acquisition prices 

3 obtained under this paragraph shall be made 

4 publicly available and shall include at least the 

5 following: 

6 ‘‘(i) The monthly response rate of the 

7 survey including a list of pharmacies not in 

8 compliance with subparagraph (F). 

9 ‘‘(ii) The sampling frame and number 

10 of pharmacies sampled monthly. 

11 ‘‘(iii) Characteristics of reporting 

12 pharmacies, including type (such as inde13 pendent or chain), geographic or regional 

14 location, and dispensing volume. 

15 ‘‘(iv) Reporting of a separate national 

16 average drug acquisition cost for each drug 

17 for independent retail pharmacies and 

18 chain pharmacies. 

19 ‘‘(v) Information on price concessions 

20 including on and off invoice discounts, re21 bates, and other price concessions to the 

22 extent that such information is available 

23 during the survey period. 

24 ‘‘(vi) Information on average profes25 sional dispensing fees paid. 


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1 ‘‘(H) REPORT ON SPECIALTY PHAR2 MACIES.— 

3 ‘‘(i) IN GENERAL.—Not later than 1 

4 year after the effective date of this sub5 paragraph, the Secretary shall submit a re6 port to Congress examining specialty drug 

7 coverage and reimbursement under this 

8 title. 

9 ‘‘(ii) CONTENT OF REPORT.—Such re10 port shall include a description of how 

11 State Medicaid programs define specialty 

12 drugs, how much State Medicaid programs 

13 pay for specialty drugs, how States and 

14 managed care plans determine payment for 

15 specialty drugs, the settings in which spe16 cialty drugs are dispensed (such as retail 

17 community pharmacies or specialty phar18 macies), whether acquisition costs for spe19 cialty drugs are captured in the national 

20 average drug acquisition cost survey, and 

21 recommendations as to whether specialty 

22 pharmacies should be included in the sur23 vey of retail prices to ensure national aver24 age drug acquisition costs capture drugs 


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1 sold at specialty pharmacies and how such 

2 specialty pharmacies should be defined.’’; 

3 (C) in paragraph (2)— 

4 (i) in subparagraph (A), by inserting 

5 ‘‘, including payments rates under Med6 icaid managed care plans,’’ after ‘‘under 

7 this title’’; and 

8 (ii) in subparagraph (B), by inserting 

9 ‘‘and the basis for such dispensing fees’’ 

10 before the semicolon; and 

11 (D) in paragraph (4), by inserting ‘‘, and 

12 $5,000,000 for fiscal year 2023 and each fiscal 

13 year thereafter,’’ after ‘‘2010’’. 

14 (2) EFFECTIVE DATE.—The amendments made 

15 by this subsection take effect on the first day of the 

16 first quarter that begins on or after the date that is 

17 18 months after the date of enactment of this Act. 

Æ 


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