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 En-
ergy and Commerce 
A BILL 
To amend title XIX of the Social Security Act to improve 
transparency and prevent the use of abusive spread pric-
ing and related practices in the Medicaid program. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Drug Price Trans-
parency in Medicaid Act of 2021’’. 
SEC. 2. IMPROVING TRANSPARENCY AND PREVENTING THE 
USE OF ABUSIVE SPREAD PRICING AND RE-
LATED PRACTICES IN MEDICAID. 
(a) PASS-THROUGH PRICING REQUIRED.— 
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(1) IN GENERAL.—Section 1927(e) of the So-
cial Security Act (42 U.S.C. 1396r–8(e)) is amended 
by adding at the end the following: 
‘‘(6) PASS-THROUGH
PRICING
REQUIRED.—A 
contract between the State and a pharmacy benefit 
manager (referred to in this paragraph as a ‘PBM’), 
or a contract between the State and a managed care 
entity or other specified entity (as such terms are 
defined in section 1903(m)(9)(D)) that includes pro-
visions making the entity responsible for coverage of 
covered outpatient drugs dispensed to individuals en-
rolled with the entity, shall require that payment for 
such drugs and related administrative services (as 
applicable), including payments made by a PBM on 
behalf of the State or entity, is based on a pass- 
through pricing model under which— 
‘‘(A) any payment made by the entity or 
the PBM (as applicable) for such a drug— 
‘‘(i) is limited to— 
‘‘(I) ingredient cost; and 
‘‘(II) a professional dispensing 
fee that is not less than the profes-
sional dispensing fee that the State 
plan or waiver would pay if the plan 
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or waiver was making the payment di-
rectly; 
‘‘(ii) is passed through in its entirety 
by the entity or PBM to the pharmacy or 
provider that dispenses the drug; and 
‘‘(iii) is made in a manner that is con-
sistent with section 1902(a)(30)(A) and 
sections 447.512, 447.514, and 447.518 of 
title 42, Code of Federal Regulations (or 
any successor regulation) as if such re-
quirements applied directly to the entity or 
the PBM, except that any payment by the 
entity or the PBM (as applicable) for the 
ingredient cost of a covered outpatient 
drug dispensed by providers and phar-
macies referenced in clauses (i) or (ii) of 
section 447.518(a)(1) of title 42, Code of 
Federal Regulations (or any successor reg-
ulation) shall be the same as the payment 
amount for the ingredient cost when dis-
pensed by providers and pharmacies not 
referenced in such clauses, and in no case 
shall payment for the ingredient cost of a 
covered outpatient drug be based on the 
actual acquisition cost of a drug dispensed 
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entity, including any post-sale or post-invoice 
fees, discounts, or related adjustments such as 
direct and indirect remuneration fees or assess-
ments (after allowing for a reasonable adminis-
trative fee as described in subparagraph (B)) is 
not allowable for purposes of claiming Federal 
matching payments under this title. 
‘‘(7) PROTECTION AGAINST MANDATES RELAT-
ING TO USE OF 340B DRUGS.— 
‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of law, no State, Medicaid man-
aged care organization (as defined in section 
1903(m)(1)(A)), or pharmacy benefit manager 
may prohibit a covered entity under section 
340B of the Public Health Service Act, or a 
pharmacy under contract with a covered entity 
to dispense drugs on behalf of the covered enti-
ty, from dispensing covered outpatient drugs 
purchased under such section to individuals re-
ceiving benefits under this title and from receiv-
ing payment in accordance with this section, or 
require that such covered entity or pharmacy 
dispense covered outpatient drugs purchased 
under section 340B to such individuals. 
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‘‘(B) NOTIFICATION.—The Secretary shall 
notify States that States may not prohibit a 
provider under this title that is a covered entity 
under section 340B of the Public Health Serv-
ices Act, or a pharmacy under contract with a 
covered entity, from submitting claims for reim-
bursement for drugs purchased under such sec-
tion that are dispensed to individuals receiving 
benefits under this title and may not require 
such provider to dispense covered outpatient 
drugs purchased under such section to such in-
dividuals.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
1903(m)(2)(A)(xiii) 
of 
such 
Act 
(42 
U.S.C. 
1396b(m)(2)(A)(xiii)) is amended— 
(A) by striking ‘‘and (III)’’ and inserting 
‘‘(III)’’; 
(B) by inserting before the period at the 
end the following: ‘‘, and (IV) pharmacy benefit 
management services provided by the entity, or 
provided by a pharmacy benefit manager on be-
half of the entity under a contract or other ar-
rangement between the entity and the phar-
macy benefit manager, shall comply with the re-
quirements of section 1927(e)(6)’’; and 
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(C) by moving the left margin 2 ems to the 
left. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection apply to contracts between States 
and managed care entities, other specified entities, 
or pharmacy benefits managers that are entered into 
or renewed on or after the date that is 18 months 
after the date of enactment of this Act. 
(b) ENSURING ACCURATE PAYMENTS
TO PHAR-
MACIES UNDER MEDICAID.— 
(1) IN GENERAL.—Section 1927(f) of the Social 
Security Act (42 U.S.C. 1396r–8(f)) is amended— 
(A) by striking ‘‘and’’ after the semicolon 
at the end of paragraph (1)(A)(i) and all that 
precedes it through ‘‘(1)’’ and inserting the fol-
lowing: 
‘‘(1) DETERMINING PHARMACY ACTUAL ACQUI-
SITION COSTS.—The Secretary shall conduct a sur-
vey of retail community pharmacy drug prices to de-
termine the national average drug acquisition cost as 
follows: 
‘‘(A) USE
OF
VENDOR.—The Secretary 
may contract services for— 
‘‘(i) with respect to retail community 
pharmacies, the determination of retail 
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survey prices of the national average drug 
acquisition cost for covered outpatient 
drugs based on a monthly survey of such 
pharmacies, net of all discounts and re-
bates (to the extent any information with 
respect to such discounts and rebates is 
available); and’’; 
(B) by adding at the end of paragraph (1) 
the following: 
‘‘(F) SURVEY
REPORTING.—In order to 
meet the requirement of section 1902(a)(54), a 
State shall require that any retail community 
pharmacy in the State that receives any pay-
ment, reimbursement, administrative fee, dis-
count, or rebate related to the dispensing of 
covered outpatient drugs to individuals receiv-
ing benefits under this title, regardless of 
whether such payment, fee, discount, or rebate 
is received from the State or a managed care 
entity directly or from a pharmacy benefit man-
ager or another entity that has a contract with 
the State or a managed care entity, shall re-
spond to surveys of retail prices conducted 
under this subsection. 
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‘‘(G) SURVEY INFORMATION.—Information 
on retail community actual acquisition prices 
obtained under this paragraph shall be made 
publicly available and shall include at least the 
following: 
‘‘(i) The monthly response rate of the 
survey including a list of pharmacies not in 
compliance with subparagraph (F). 
‘‘(ii) The sampling frame and number 
of pharmacies sampled monthly. 
‘‘(iii) 
Characteristics 
of 
reporting 
pharmacies, including type (such as inde-
pendent or chain), geographic or regional 
location, and dispensing volume. 
‘‘(iv) Reporting of a separate national 
average drug acquisition cost for each drug 
for independent retail pharmacies and 
chain pharmacies. 
‘‘(v) Information on price concessions 
including on and off invoice discounts, re-
bates, and other price concessions to the 
extent that such information is available 
during the survey period. 
‘‘(vi) Information on average profes-
sional dispensing fees paid. 
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‘‘(H) 
REPORT
ON
SPECIALTY
PHAR-
MACIES.— 
‘‘(i) IN GENERAL.—Not later than 1 
year after the effective date of this sub-
paragraph, the Secretary shall submit a re-
port to Congress examining specialty drug 
coverage and reimbursement under this 
title. 
‘‘(ii) CONTENT OF REPORT.—Such re-
port shall include a description of how 
State Medicaid programs define specialty 
drugs, how much State Medicaid programs 
pay for specialty drugs, how States and 
managed care plans determine payment for 
specialty drugs, the settings in which spe-
cialty drugs are dispensed (such as retail 
community pharmacies or specialty phar-
macies), whether acquisition costs for spe-
cialty drugs are captured in the national 
average drug acquisition cost survey, and 
recommendations as to whether specialty 
pharmacies should be included in the sur-
vey of retail prices to ensure national aver-
age drug acquisition costs capture drugs 
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