or other arrangements are not excluded under 
this section from the determination of average 
manufacturer price or best price.’’ 
(2) RULES OF CONSTRUCTION.—Nothing in the 
amendments made by paragraph (1) shall be con-
strued as— 
(A) requiring— 
(i) a State to enter into a value-based 
purchasing arrangement with a manufac-
turer for a covered outpatient drug; or 
(ii) a manufacturer to enter into a 
value-based purchasing arrangement with 
a State for a covered outpatient drug; 
(B) prohibiting a manufacturer from treat-
ing a value-based purchasing arrangement as a 
bundled sale; or 
(C) precluding the execution of a supple-
mental rebate agreement, as provided in section 
1927(a)(1) of the Social Security Act (42 
U.S.C. 1396r–8(a)(1)), for a covered outpatient 
drug sold under a value-based purchasing ar-
rangement. 
(c) DEFINITION
OF
AVERAGE
MANUFACTURER 
PRICE.—Section 1927(k)(1) of the Social Security Act (42 
U.S.C. 1396r–8(k)(1)) is amended— 
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(1) in subparagraph (B)(i)— 
(A) in subclause (IV), by striking at the 
end ‘‘and’’; 
(B) in subclause (V), by striking the period 
at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subclause: 
‘‘(VI) in accordance with sub-
section (b)(3)(A)(vi), with respect to 
such covered outpatient drug that is 
sold under a value-based purchasing 
arrangement (as defined in paragraph 
(12)) during the rebate period— 
‘‘(aa) a refund, rebate, reim-
bursement, or free goods from 
the manufacturer or third party 
on behalf of the manufacturer; or 
‘‘(bb) the withholding or re-
duction of a payment to the man-
ufacturer or third party on behalf 
of the manufacturer; 
that is triggered by a patient who 
fails to achieve outcomes or measures 
defined under the terms of such value- 
based purchasing arrangement during 
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the period for which such agreement 
is effective.’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(D) SPECIAL RULE FOR CERTAIN VALUE- 
BASED
PURCHASING
ARRANGEMENTS.—For 
purposes of subparagraph (A), in determining 
the average price paid to the manufacturer for 
a covered outpatient drug that is sold under a 
value-based purchasing arrangement (as defined 
in paragraph (12)) that provides that payment 
for such drug is made in installments over the 
course of such agreement, such price shall be 
determined as if the aggregate price per the 
terms of the agreement was paid in full in the 
first installment during the rebate period.’’. 
(d) DEFINITION OF VALUE-BASED PURCHASING AR-
RANGEMENT.—Section 1927(k) of the Social Security Act 
(42 U.S.C. 1396r–8(k)) shall be amended by adding at 
the end the following paragraph: 
‘‘(12) VALUE-BASED
PURCHASING
ARRANGE-
MENT.—The term ‘value-based purchasing arrange-
ment’ means an arrangement or agreement intended 
to align pricing or payments to an observed or ex-
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pbinns on DSKJLVW7X2PROD with $$_JOB
pected therapeutic or clinical value in a select popu-
lation and includes— 
‘‘(A) evidence-based measures, which sub-
stantially link the cost of a covered outpatient 
drug to existing evidence of effectiveness and 
potential value for specific uses of that product; 
or 
‘‘(B) outcomes-based measures, which sub-
stantially link payment for the covered out-
patient drug to that of the drug’s actual per-
formance in patient or a population, or a reduc-
tion in other medical expenses.’’. 
SEC. 4. CALCULATION OF AVERAGE SALES PRICE UNDER 
MEDICARE. 
Section 1847A(c)(2) of the Social Security Act (42 
U.S.C. 1395w–3a(c)(2)) is amended by adding at the end 
the following new subparagraph: 
‘‘(C) SALES SUBJECT TO A VALUE-BASED 
PURCHASING ARRANGEMENT.—Sales of a drug 
made under a value-based purchasing arrange-
ment (as defined in section 1927(k)(12)), but 
only if the manufacturer of such drug has elect-
ed to report multiple best prices under section 
1927(c) with respect to such drug in accordance 
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with the revision described in section 3(a) of 
the MVP Act.’’. 
SEC. 5. VALUE-BASED PURCHASING ARRANGEMENTS FOR 
INPATIENT DRUGS UNDER MEDICAID. 
Title XIX of the Social Security Act (42 U.S.C. 1396 
et seq.) is amended by adding at the end the following 
new section: 
‘‘SEC. 1948. VALUE-BASED PURCHASING ARRANGEMENTS 
FOR INPATIENT DRUGS. 
‘‘(a) 
IN
GENERAL.—Notwithstanding 
section 
1902(a)(1) 
(relating 
to 
statewideness), 
section 
1902(a)(10)(b) (relating to comparability), and any other 
provision of this title for which the secretary determines 
it is necessary to waive in order to implement this section, 
beginning on January 1, 2024, the Secretary shall estab-
lish a program under which States may provide under 
their State plans under this title (including such a plan 
operating under a statewide waiver under section 1115) 
medical assistance for drugs furnished to individuals in 
an inpatient setting pursuant to a value-based purshasing 
arrangement (as defined in section 1927(k)(12)) with 
manufacturers of such drugs. 
‘‘(b) APPLICATION OF CERTAIN OUTPATIENT PROVI-
SIONS TO INPATIENT DRUGS.— 
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