122 
rollee incurs out-of-pocket costs 
with respect to covered part D 
drugs that make it likely the en-
rollee is an applicable enrollee; 
‘‘(ee) shall provide that a 
pharmacy, after receiving a noti-
fication described in item (dd) 
with respect to an enrollee, in-
forms the enrollee of such notifi-
cation; 
‘‘(ff) shall ensure that the 
application of this subparagraph 
has no effect on the amount paid 
to pharmacies (or the timing of 
such payments) with respect to 
covered part D drugs dispensed 
to the enrollee; and 
‘‘(gg) shall have in place a 
financial reconciliation process to 
correct inaccuracies in payments 
made by an enrollee under this 
subparagraph with respect to 
covered part D drugs during the 
plan year. 
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‘‘(III) FAILURE TO PAY AMOUNT 
BILLED
UNDER
MONTHLY
OUT-OF- 
POCKET COST SHARING MAXIMUM OP-
TION.—If an applicable enrollee fails 
to pay the amount billed for a month 
as required under this subparagraph, 
the applicable enrollee’s enrollment in 
the monthly out-of-pocket cost sharing 
maximum option shall be terminated 
and the enrollee shall pay the cost- 
sharing otherwise applicable for any 
covered part D drugs subsequently 
dispensed to the enrollee up to the an-
nual out-of-pocket threshold specified 
in paragraph (4)(B). 
‘‘(IV) CLARIFICATION
REGARD-
ING PAST DUE AMOUNTS.—Nothing in 
this subparagraph shall be construed 
as prohibiting a PDP sponsor or an 
MA organization from billing an en-
rollee for an amount owed under this 
subparagraph. 
‘‘(V) TREATMENT
OF
UNSET-
TLED BALANCES.—Any unsettled bal-
ances with respect to amounts owed 
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under this subparagraph shall be 
treated as plan losses and the Sec-
retary shall not be liable for any such 
balances outside of those assumed as 
losses estimated in plan bids.’’; and 
(2) in paragraph (4)— 
(A) in subparagraph (C), by striking ‘‘and 
subject to subparagraph (F)’’ and inserting 
‘‘and subject to subparagraphs (F) and (G)’’; 
and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(G) INCLUSION OF COSTS PAID UNDER 
MONTHLY OUT-OF-POCKET COST SHARING MAX-
IMUM OPTION.—In applying subparagraph (A), 
with respect to an applicable enrollee who is en-
rolled in the monthly out-of-pocket cost sharing 
maximum option described in clause (i)(I) of 
paragraph (2)(E), costs shall be treated as in-
curred if such costs are paid by a PDP sponsor 
or an MA organization under the process pro-
vided under such paragraph.’’. 
(b) APPLICATION TO ALTERNATIVE PRESCRIPTION 
DRUG COVERAGE.—Section 1860D–2(c) of the Social Se-
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curity Act (42 U.S.C. 1395w–102(c)) is amended by add-
ing at the end the following new paragraph: 
‘‘(4) SAME
MONTHLY
OUT-OF-POCKET
COST 
SHARING MAXIMUM.—For plan years beginning on 
or after January 1, 2024, the monthly out-of-pocket 
cost sharing maximum for applicable enrollees under 
the process provided under subsection (b)(2)(E) 
shall apply to such coverage.’’. 
Subtitle C—Miscellaneous 
SEC. 221. DRUG MANUFACTURER PRICE TRANSPARENCY. 
Title XI of the Social Security Act (42 U.S.C. 1301 
et seq.) is amended by inserting after section 1128K the 
following new section: 
‘‘SEC. 
1128L. 
DRUG 
MANUFACTURER 
PRICE 
TRANS-
PARENCY. 
‘‘(a) IN GENERAL.— 
‘‘(1) DETERMINATIONS.—Beginning July 1, 
2025, the Secretary shall make determinations as to 
whether a drug is an applicable drug as described in 
subsection (b). 
‘‘(2) REQUIRED
JUSTIFICATION.—If the Sec-
retary determines under paragraph (1) that an ap-
plicable drug is described in subsection (b), the man-
ufacturer of the applicable drug shall submit to the 
Secretary the justification described in subsection (c) 
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in accordance with the timing described in sub-
section (d). 
‘‘(b) APPLICABLE DRUG DESCRIBED.— 
‘‘(1) IN GENERAL.—An applicable drug is de-
scribed in this subsection if it meets any of the fol-
lowing at the time of the determination: 
‘‘(A) LARGE
INCREASE.—The drug (per 
dose)— 
‘‘(i) has a wholesale acquisition cost of 
at least $10; and 
‘‘(ii) had an increase in the wholesale 
acquisition cost, with respect to determina-
tions made— 
‘‘(I) during 2023, of at least 100 
percent since the date of the enact-
ment of this section; 
‘‘(II) during 2024, of at least 
100 percent in the preceding 12 
months or of at least 150 percent in 
the preceding 24 months; 
‘‘(III) during 2025, of at least 
100 percent in the preceding 12 
months or of at least 200 percent in 
the preceding 36 months; 
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‘‘(IV) during 2026, of at least 
100 percent in the preceding 12 
months or of at least 250 percent in 
the preceding 48 months; or 
‘‘(V) on or after January 1, 
2027, of at least 100 percent in the 
preceding 12 months or of at least 
300 percent in the preceding 60 
months. 
‘‘(B) HIGH SPENDING WITH INCREASE.— 
The drug— 
‘‘(i) was in the top 50th percentile of 
net spending under title XVIII or XIX (to 
the extent data is available) during any 12- 
month period in the preceding 60 months; 
and 
‘‘(ii) per dose, had an increase in the 
wholesale acquisition cost, with respect to 
determinations made— 
‘‘(I) during 2023, of at least 15 
percent since the date of the enact-
ment of this section; 
‘‘(II) during 2024, of at least 15 
percent in the preceding 12 months or 
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128 
of at least 20 percent in the preceding 
24 months; 
‘‘(III) during 2025, of at least 15 
percent in the preceding 12 months or 
of at least 30 percent in the preceding 
36 months; 
‘‘(IV) during 2026, of at least 15 
percent in the preceding 12 months or 
of at least 40 percent in the preceding 
48 months; or 
‘‘(V) on or after January 1, 
2027, of at least 15 percent in the 
preceding 12 months or of at least 50 
percent in the preceding 60 months. 
‘‘(C) HIGH
LAUNCH
PRICE
FOR
NEW 
DRUGS.—In the case of a drug that is marketed 
for the first time on or after January 1, 2023, 
and for which the manufacturer has established 
the first wholesale acquisition cost on or after 
such date, such wholesale acquisition cost for a 
year’s supply or a course of treatment for such 
drug exceeds the gross spending for covered 
part D drugs at which the annual out-of-pocket 
threshold 
under 
section 
1860D–2(b)(4)(B) 
would be met for the year. 
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‘‘(2) SPECIAL RULES.— 
‘‘(A) AUTHORITY OF SECRETARY TO SUB-
STITUTE PERCENTAGES WITHIN A DE MINIMIS 
RANGE.—For purposes of applying paragraph 
(1), the Secretary may substitute for each per-
centage described in subparagraph (A) or (B) 
of such paragraph (other than the percentile de-
scribed subparagraph (B)(i) of such paragraph) 
a percentage within a de minimis range speci-
fied by the Secretary below the percentage so 
described. 
‘‘(B) DRUGS WITH HIGH LAUNCH PRICES 
ANNUALLY
REPORT
UNTIL
A
THERAPEUTIC 
EQUIVALENT IS AVAILABLE.—In the case of a 
drug that the Secretary determines is an appli-
cable drug described in subparagraph (C) of 
paragraph (1), such drug shall remain de-
scribed in such subparagraph (C) (and the 
manufacturer of such drug shall annually re-
port the justification under subsection (c)(2)) 
until the Secretary determines that there is a 
therapeutic equivalent (as defined in section 
314.3 of title 21, Code of Federal Regulations, 
or any successor regulation) for such drug. 
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‘‘(3) DOSE.—For purposes of applying para-
graph (1), the Secretary shall establish a definition 
of the term ‘dose’. 
‘‘(c) JUSTIFICATION DESCRIBED.— 
‘‘(1) INCREASE IN WAC.—In the case of a drug 
that the Secretary determines is an applicable drug 
described in subparagraph (A) or (B) of subsection 
(b)(1), the justification described in this subsection 
is all relevant, truthful, and nonmisleading informa-
tion and supporting documentation necessary to jus-
tify the increase in the wholesale acquisition cost of 
the applicable drug of the manufacturer, as deter-
mined appropriate by the Secretary and which may 
include the following: 
‘‘(A) The individual factors that have con-
tributed to the increase in the wholesale acqui-
sition cost. 
‘‘(B) An explanation of the role of each 
factor in contributing to such increase. 
‘‘(C) Total expenditures of the manufac-
turer on— 
‘‘(i) materials and manufacturing for 
such drug; 
‘‘(ii) acquiring patents and licensing 
for each drug of the manufacturer; and 
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131 
‘‘(iii) costs to purchase or acquire the 
drug from another company, if applicable. 
‘‘(D) The percentage of total expenditures 
of the manufacturer on research and develop-
ment for such drug that was derived from Fed-
eral funds. 
‘‘(E) The total expenditures of the manu-
facturer on research and development for such 
drug. 
‘‘(F) The total revenue and net profit gen-
erated from the applicable drug for each cal-
endar year since drug approval. 
‘‘(G) The total expenditures of the manu-
facturer that are associated with marketing and 
advertising for the applicable drug. 
‘‘(H) Additional information specific to the 
manufacturer of the applicable drug, such as— 
‘‘(i) the total revenue and net profit of 
the manufacturer for the period of such in-
crease, as determined by the Secretary; 
‘‘(ii) metrics used to determine execu-
tive compensation; and 
‘‘(iii) any additional information re-
lated to drug pricing decisions of the man-
ufacturer, such as total expenditures on— 
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132 
‘‘(I) drug research and develop-
ment; or 
‘‘(II) clinical trials on drugs that 
failed to receive approval by the Food 
and Drug Administration. 
‘‘(2) HIGH LAUNCH PRICE.—In the case of a 
drug that the Secretary determines is an applicable 
drug described in subparagraph (C) of subsection 
(b)(1), the justification described in this subsection 
is all relevant, truthful, and nonmisleading informa-
tion and supporting documentation necessary to jus-
tify the wholesale acquisition cost of the applicable 
drug of the manufacturer, as determined by the Sec-
retary and which may include the items described in 
subparagraph (C) through (H) of paragraph (1). 
‘‘(d) TIMING.— 
‘‘(1) NOTIFICATION.—Not later than 60 days 
after the date on which the Secretary makes the de-
termination that a drug is an applicable drug under 
subsection (b), the Secretary shall notify the manu-
facturer of the applicable drug of such determina-
tion. 
‘‘(2) SUBMISSION
OF
JUSTIFICATION.—Not 
later than 180 days after the date on which a manu-
facturer receives a notification under paragraph (1), 
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133 
the manufacturer shall submit to the Secretary the 
justification required under subsection (a). 
‘‘(3) POSTING ON INTERNET WEBSITE.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), not later than 30 days after receiv-
ing the justification under paragraph (2), the 
Secretary shall post on the Internet website of 
the Centers for Medicare & Medicaid Services 
the justification, together with a summary of 
such justification that is written and formatted 
using language that is easily understandable by 
beneficiaries under titles XVIII and XIX. 
‘‘(B) EXCLUSION OF PROPRIETARY INFOR-
MATION.—The Secretary shall exclude propri-
etary information, such as trade secrets and in-
tellectual property, submitted by the manufac-
turer in the justification under paragraph (2) 
from the posting described in subparagraph 
(A). 
‘‘(e) EXCEPTION
TO REQUIREMENT
FOR SUBMIS-
SION.—In the case of a drug that the Secretary deter-
mines is an applicable drug described in subparagraph (A) 
or (B) of subsection (b)(1), the requirement to submit a 
justification under subsection (a) shall not apply where the 
manufacturer, after receiving the notification under sub-
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section (d)(1) with respect to the applicable drug of the 
manufacturer, reduces the wholesale acquisition cost of a 
drug so that it no longer is described in such subpara-
graph (A) or (B) for at least a 4-month period, as deter-
mined by the Secretary. 
‘‘(f) PENALTIES.— 
‘‘(1) FAILURE TO SUBMIT TIMELY JUSTIFICA-
TION.—If the Secretary determines that a manufac-
turer has failed to submit a justification as required 
under this section, including in accordance with the 
timing and form required, with respect to an appli-
cable drug, the Secretary shall apply a civil mone-
tary penalty in an amount of $10,000 for each day 
the manufacturer has failed to submit such justifica-
tion as so required. 
‘‘(2) FALSE INFORMATION.—Any manufacturer 
that submits a justification under this section and 
knowingly provides false information in such jus-
tification is subject to a civil monetary penalty in an 
amount not to exceed $100,000 for each item of 
false information. 
‘‘(3) APPLICATION OF PROCEDURES.—The pro-
visions of section 1128A (other than subsections (a) 
and (b)) shall apply to a civil monetary penalty 
under this subsection in the same manner as such 
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provisions apply to a penalty or proceeding under 
section 1128A(a). Civil monetary penalties imposed 
under this subsection are in addition to other pen-
alties as may be prescribed by law. 
‘‘(g) DEFINITIONS.—In this section: 
‘‘(1) DRUG.—The term ‘drug’ means a drug, as 
defined in section 201(g) of the Federal Food, Drug, 
and Cosmetic Act, that is intended for human use 
and subject to section 503(b)(1) of such Act, includ-
ing a product licensed under section 351 of the Pub-
lic Health Service Act. 
‘‘(2) MANUFACTURER.—The term ‘manufac-
turer’ has the meaning given that term in section 
1847A(c)(6)(A). 
‘‘(3) WHOLESALE
ACQUISITION
COST.—The 
term ‘wholesale acquisition cost’ has the meaning 
given that term in section 1847A(c)(6)(B).’’. 
SEC. 222. STRENGTHENING AND EXPANDING PHARMACY 
BENEFIT 
MANAGERS 
TRANSPARENCY 
RE-
QUIREMENTS. 
Section 1150A of the Social Security Act (42 U.S.C. 
1320b–23), as amended by section 223, is amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by striking ‘‘or’’ at 
then end; 
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(B) in paragraph (2), by striking the 
comma at the end and inserting ‘‘; or’’; and 
(C) by inserting after paragraph (2) the 
following new paragraph: 
‘‘(3) a State plan under title XIX, including a 
managed 
care 
entity 
(as 
defined 
in 
section 
1932(a)(1)(B)),’’; 
(2) in subsection (b)— 
(A) in paragraph (2)— 
(i) by striking ‘‘(excluding bona fide’’ 
and all that follows through ‘‘patient edu-
cation programs))’’; and 
(ii) by striking ‘‘aggregate amount of’’ 
and inserting ‘‘aggregate amount and per-
centage of’’; 
(B) in paragraph (3), by striking ‘‘aggre-
gate amount of’’ and inserting ‘‘aggregate 
amount and percentage (defined as a share of 
gross drug costs) of’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(4) The aggregate amount of bona fide service 
fees (which include distribution service fees, inven-
tory management fees, product stocking allowances, 
and fees associated with administrative services 
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agreements and patient care programs (such as 
medication compliance programs and patient edu-
cation programs)) the PBM received from— 
‘‘(A) PDP sponsors; 
‘‘(B) qualified health benefit plans; 
‘‘(C) managed care entities (as defined in 
section 1932(a)(1)(b)); and 
‘‘(D) drug manufacturers.’’; 
(3) in subsection (c), by adding at the end the 
following new paragraphs: 
‘‘(5) To States to carry out their administration 
and oversight of the State plan under title XIX. 
‘‘(6) To the Federal Trade Commission to carry 
out section 5(a) of the Federal Trade Commission 
Act (15 U.S.C. 45a) and any other relevant con-
sumer protection or antitrust authorities enforced by 
such Commission, including reviewing proposed 
mergers in the prescription drug sector. 
‘‘(7) To assist the Department of Justice to 
carry out its antitrust authorities, including review-
ing proposed mergers in the prescription drug sec-
tor.’’; and 
(4) by adding at the end the following new sub-
section: 
‘‘(f) ANNUAL OIG EVALUATION AND REPORT.— 
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‘‘(1) ANALYSIS.—The Inspector General of the 
Department of Health and Human Services shall 
conduct an annual evaluation of the information pro-
vided to the Secretary under this section. Such eval-
uation shall include an analysis of— 
‘‘(A) PBM rebates; 
‘‘(B) administrative fees; 
‘‘(C) the difference between what plans pay 
PBMs and what PBMs pay pharmacies; 
‘‘(D) generic dispensing rates; and 
‘‘(E) other areas determined appropriate 
by the Inspector General. 
‘‘(2) REPORT.—Not later than July 1, 2023, 
and annually thereafter, the Inspector General of the 
Department of Health and Human Services shall 
submit to Congress a report containing the results 
of the evaluation conducted under paragraph (1), to-
gether with recommendations for such legislation 
and administrative action as the Inspector General 
determines appropriate. Such report shall not dis-
close the identity of a specific PBM, plan, or price 
charged for a drug.’’. 
SEC. 223. PRESCRIPTION DRUG PRICING DASHBOARDS. 
Part A of title XI of the Social Security Act is 
amended by adding at the end the following new section: 
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‘‘SEC. 1150C. PRESCRIPTION DRUG PRICING DASHBOARDS. 
‘‘(a) IN GENERAL.—Beginning not later than Janu-
ary 1, 2023, the Secretary shall establish, and annually 
update, internet website-based dashboards, through which 
beneficiaries, clinicians, researchers, and the public can re-
view information on spending for, and utilization of, pre-
scription drugs and biologicals (and related supplies and 
mechanisms of delivery) covered under each of parts B 
and D of title XVIII and under a State program under 
title XIX, including information on trends of such spend-
ing and utilization over time. 
‘‘(b) MEDICARE PART B DRUG AND BIOLOGICAL 
DASHBOARD.— 
‘‘(1) IN GENERAL.—The dashboard established 
under subsection (a) for part B of title XVIII shall 
provide the information described in paragraph (2). 
‘‘(2) INFORMATION DESCRIBED.—The informa-
tion described in this paragraph is the following in-
formation with respect to drug or biologicals covered 
under such part B: 
‘‘(A) The brand name and, if applicable, 
the generic names of the drug or biological. 
‘‘(B) Consumer-friendly information on the 
uses and clinical indications of the drug or bio-
logical. 
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‘‘(C) The manufacturer or labeler of the 
drug or biological. 
‘‘(D) To the extent feasible, the following 
information: 
‘‘(i) Average total spending per dos-
age unit of the drug or biological in the 
most recent 2 calendar years for which 
data is available. 
‘‘(ii) The percentage change in aver-
age spending on the drug or biological per 
dosage unit between the most recent cal-
endar year for which data is available 
and— 
‘‘(I) the preceding calendar year; 
and 
‘‘(II) the preceding 5 and 10 cal-
endar years. 
‘‘(iii) The annual growth rate in aver-
age spending per dosage unit of the drug 
or biological in the most recent 5 or 10 
calendar years for which data is available. 
‘‘(iv) Total spending for the drug or 
biological for the most recent calendar year 
for which data is available. 
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141 
‘‘(v) The number of beneficiaries re-
ceiving the drug or biological in the most 
recent calendar year for which data is 
available. 
‘‘(vi) Average spending on the drug 
per beneficiary for the most recent cal-
endar year for which data is available. 
‘‘(E) The average sales price of the drug 
or biological (as determined under section 
1847A) for the most recent quarter. 
‘‘(F) Consumer-friendly information about 
the coinsurance amount for the drug or biologi-
cal for beneficiaries for the most recent quarter. 
Such information shall not include coinsurance 
amounts for qualified medicare beneficiaries (as 
defined in section 1905(p)(1)). 
‘‘(G) For the most recent calendar year for 
which data is available— 
‘‘(i) the 15 drugs and biologicals with 
the highest total spending under such part; 
and 
‘‘(ii) any drug or biological for which 
the average annual per beneficiary spend-
ing exceeds the gross spending for covered 
part D drugs at which the annual out-of- 
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pocket threshold under section 1860D– 
2(b)(4)(B) would be met for the year. 
‘‘(H) Other information (not otherwise 
prohibited in law from being disclosed) that the 
Secretary determines would provide bene-
ficiaries, clinicians, researchers, and the public 
with helpful information about drug and bio-
logical spending and utilization (including 
trends of such spending and utilization). 
‘‘(c) MEDICARE COVERED PART D DRUG DASH-
BOARD.— 
‘‘(1) IN GENERAL.—The dashboard established 
under subsection (a) for part D of title XVIII shall 
provide the information described in paragraph (2). 
‘‘(2) INFORMATION DESCRIBED.—The informa-
tion described in this paragraph is the following in-
formation with respect to covered part D drugs 
under such part D: 
‘‘(A) The information described in sub-
paragraphs (A) through (D) of subsection 
(b)(2). 
‘‘(B) Information on average annual bene-
ficiary out-of-pocket costs below and above the 
annual out-of-pocket threshold under section 
1860D–2(b)(4)(B) for the current plan year. 
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Such information shall not include out-of-pocket 
costs for subsidy eligible individuals under sec-
tion 1860D–14. 
‘‘(C) Information on how to access re-
sources as described in sections 1860D–1(c) 
and 1851(d). 
‘‘(D) For the most recent calendar year for 
which data is available— 
‘‘(i) the 15 covered part D drugs with 
the highest total spending under such part; 
and 
‘‘(ii) any covered part D drug for 
which the average annual per beneficiary 
spending exceeds the gross spending for 
covered part D drugs at which the annual 
out-of-pocket 
threshold 
under 
section 
1860D–2(b)(4)(B) would be met for the 
year. 
‘‘(E) Other information (not otherwise pro-
hibited in law from being disclosed) that the 
Secretary determines would provide bene-
ficiaries, clinicians, researchers, and the public 
with helpful information about covered part D 
drug spending and utilization (including trends 
of such spending and utilization). 
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‘‘(d) MEDICAID COVERED OUTPATIENT DRUG DASH-
BOARD.— 
‘‘(1) IN GENERAL.—The dashboard established 
under subsection (a) for title XIX shall provide the 
information described in paragraph (2). 
‘‘(2) INFORMATION DESCRIBED.—The informa-
tion described in this paragraph is the following in-
formation with respect to covered outpatient drugs 
under such title: 
‘‘(A) The information described in sub-
paragraphs (A) through (D) of subsection 
(b)(2). 
‘‘(B) For the most recent calendar year for 
which data is available, the 15 covered out-
patient drugs with the highest total spending 
under such title. 
‘‘(C) Other information (not otherwise pro-
hibited in law from being disclosed) that the 
Secretary determines would provide bene-
ficiaries, clinicians, researchers, and the public 
with helpful information about covered out-
patient drug spending and utilization (including 
trends of such spending and utilization). 
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‘‘(e) DATA FILES.—The Secretary shall make avail-
able the underlying data for each dashboard established 
under subsection (a) in a machine-readable format.’’. 
SEC. 224. IMPROVING COORDINATION BETWEEN THE FOOD 
AND DRUG ADMINISTRATION AND THE CEN-
TERS FOR MEDICARE & MEDICAID SERVICES. 
(a) IN GENERAL.— 
(1) PUBLIC MEETING.— 
(A) IN
GENERAL.—Not later than 12 
months after the date of the enactment of this 
Act, the Secretary of Health and Human Serv-
ices (referred to in this section as the ‘‘Sec-
retary’’) shall convene a public meeting for the 
purposes of discussing and providing input on 
improvements to coordination between the Food 
and Drug Administration and the Centers for 
Medicare & Medicaid Services in preparing for 
the availability of novel medical products de-
scribed in subsection (c) on the market in the 
United States. 
(B) ATTENDEES.—The public meeting 
shall include— 
(i) representatives of relevant Federal 
agencies, including representatives from 
each of the medical product centers within 
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146 
the Food and Drug Administration and 
representatives from the coding, coverage, 
and payment offices within the Centers for 
Medicare & Medicaid Services; 
(ii) stakeholders with expertise in the 
research and development of novel medical 
products, including manufacturers of such 
products; 
(iii) representatives of commercial 
health insurance payers; 
(iv) stakeholders with expertise in the 
administration and use of novel medical 
products, including physicians; and 
(v) stakeholders representing patients 
and with expertise in the utilization of pa-
tient experience data in medical product 
development. 
(C) TOPICS.—The public meeting shall in-
clude a discussion of— 
(i) the status of the drug and medical 
device development pipeline related to the 
availability of novel medical products; 
(ii) the anticipated expertise necessary 
to review the safety and effectiveness of 
such products at the Food and Drug Ad-
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147 
ministration and current gaps in such ex-
pertise, if any; 
(iii) the expertise necessary to make 
coding, coverage, and payment decisions 
with respect to such products within the 
Centers for Medicare & Medicaid Services, 
and current gaps in such expertise, if any; 
(iv) trends in the differences in the 
data necessary to determine the safety and 
effectiveness of a novel medical product 
and the data necessary to determine 
whether a novel medical product meets the 
reasonable and necessary requirements for 
coverage and payment under title XVIII of 
the Social Security Act pursuant to section 
1862(a)(1)(A) of such Act (42 U.S.C. 
1395y(a)(1)(A)); 
(v) the availability of information for 
sponsors of such novel medical products to 
meet each of those requirements; and 
(vi) the coordination of information 
related to significant clinical improvement 
over existing therapies for patients between 
the Food and Drug Administration and the 
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Centers for Medicare & Medicaid Services 
with respect to novel medical products. 
(D) TRADE SECRETS AND CONFIDENTIAL 
INFORMATION.—No information discussed as a 
part of the public meeting under this paragraph 
shall be construed as authorizing the Secretary 
to disclose any information that is a trade se-
cret or confidential information subject to sec-
tion 552(b)(4) of title 5, United States Code. 
(2) IMPROVING
TRANSPARENCY
OF
CRITERIA 
FOR MEDICARE COVERAGE.— 
(A) DRAFT GUIDANCE.—Not later than 18 
months after the public meeting under para-
graph (1), the Secretary shall update the final 
guidance titled ‘‘National Coverage Determina-
tions with Data Collection as a Condition of 
Coverage: Coverage with Evidence Develop-
ment’’ to address any opportunities to improve 
the availability and coordination of information 
as described in clauses (iv) through (vi) of para-
graph (1)(C). 
(B) FINAL GUIDANCE.—Not later than 12 
months after issuing draft guidance under sub-
paragraph (A), the Secretary shall finalize the 
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149 
updated guidance to address any such opportu-
nities. 
(b) REPORT ON CODING, COVERAGE, AND PAYMENT 
PROCESSES UNDER MEDICARE
FOR NOVEL MEDICAL 
PRODUCTS.—Not later than 12 months after the date of 
the enactment of this Act, the Secretary shall publish a 
report on the Internet website of the Department of 
Health and Human Services regarding processes under 
the Medicare program under title XVIII of the Social Se-
curity Act (42 U.S.C. 1395 et seq.) with respect to the 
coding, coverage, and payment of novel medical products 
described in subsection (c). Such report shall include the 
following: 
(1) A description of challenges in the coding, 
coverage, and payment processes under the Medicare 
program for novel medical products. 
(2) Recommendations to— 
(A) incorporate patient experience data 
(such as the impact of a disease or condition on 
the lives of patients and patient treatment pref-
erences) into the coverage and payment proc-
esses within the Centers for Medicare & Med-
icaid Services; 
(B) decrease the length of time to make 
national and local coverage determinations 
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under the Medicare program (as those terms 
are defined in subparagraph (A) and (B), re-
spectively, of section 1862(l)(6) of the Social 
Security Act (42 U.S.C. 1395y(l)(6))); 
(C) streamline the coverage process under 
the Medicare program and incorporate input 
from relevant stakeholders into such coverage 
determinations; and 
(D) identify potential mechanisms to incor-
porate novel payment designs similar to those 
in development in commercial insurance plans 
and State plans under title XIX of such Act 
(42 U.S.C. 1396 et seq.) into the Medicare pro-
gram. 
(c) NOVEL MEDICAL PRODUCTS DESCRIBED.—For 
purposes of this section, a novel medical product described 
in this subsection is a medical product, including a drug, 
biological (including gene and cell therapy), or medical de-
vice, that has been designated as a breakthrough therapy 
under section 506(a) of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 356(a)), a breakthrough device 
under section 515B of such Act (21 U.S.C. 360e–3), or 
a regenerative advanced therapy under section 506(g) of 
such Act (21 U.S.C. 356(g)). 
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151 
SEC. 225. PATIENT CONSULTATION IN MEDICARE NA-
TIONAL AND LOCAL COVERAGE DETERMINA-
TIONS IN ORDER TO MITIGATE BARRIERS TO 
INCLUSION OF SUCH PERSPECTIVES. 
Section 1862(l) of the Social Security Act (42 U.S.C. 
1395y(l)) is amended by adding at the end the following 
new paragraph: 
‘‘(7) PATIENT
CONSULTATION
IN
NATIONAL 
AND LOCAL COVERAGE DETERMINATIONS.—The Sec-
retary may consult with patients and organizations 
representing patients in making national and local 
coverage determinations.’’. 
SEC. 226. GAO STUDY ON INCREASES TO MEDICARE AND 
MEDICAID SPENDING DUE TO COPAYMENT 
COUPONS AND OTHER PATIENT ASSISTANCE 
PROGRAMS. 
(a) STUDY.—The Comptroller General of the United 
States shall conduct a study on the impact of copayment 
coupons and other patient assistance programs on pre-
scription drug pricing and expenditures within the Medi-
care and Medicaid programs. The study shall assess the 
following: 
(1) The extent to which copayment coupons and 
other patient assistance programs contribute to in-
flated prescription drug prices under such programs. 
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(2) The impact copayment coupons and other 
patient assistance programs have in the Medicare 
Part D program established under part D of title 
XVIII of the Social Security Act (42 U.S.C. 1395w– 
101 et seq.) on utilization of higher-cost brand drugs 
and lower utilization of generic drugs in that pro-
gram. 
(3) The extent to which manufacturers report 
or obtain tax benefits, including deductions of busi-
ness expenses and charitable contributions, for any 
of the following: 
(A) Offering copayment coupons or other 
patient assistance programs. 
(B) Sponsoring manufacturer patient as-
sistance programs. 
(C) Paying for sponsorships at outreach 
and advocacy events organized by patient as-
sistance programs. 
(4) The efficacy of oversight conducted to en-
sure that independent charity patient assistance pro-
grams adhere to guidance from the Office of the In-
spector General of the Department of Health and 
Human Services on avoiding waste, fraud, and 
abuse. 
(b) DEFINITIONS.—In this section: 
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(1) INDEPENDENT CHARITY PATIENT ASSIST-
ANCE
PROGRAM.—The term ‘‘independent charity 
patient assistance program’’ means any organization 
described in section 501(c)(3) of the Internal Rev-
enue Code of 1986 and exempt from taxation under 
section 501(a) of such Code and which is not a pri-
vate foundation (as defined in section 509(a) of such 
Code) that offers patient assistance. 
(2) MANUFACTURER.—The term ‘‘manufac-
turer’’ has the meaning given that term in section 
1927(k)(5) of the Social Security Act (42 U.S.C. 
1396r–8(k)(5)). 
(3) MANUFACTURER PATIENT ASSISTANCE PRO-
GRAM.—The term ‘‘manufacturer patient assistance 
program’’ means an organization, including a private 
foundation (as so defined), that is sponsored by, or 
receives funding from, a manufacturer and that of-
fers patient assistance. Such term does not include 
an independent charity patient assistance program. 
(4) PATIENT ASSISTANCE.—The term ‘‘patient 
assistance’’ means assistance provided to offset the 
cost of drugs for individuals. Such term includes free 
products, coupons, rebates, copay or discount cards, 
and other means of providing assistance to individ-
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154 
uals related to drug costs, as determined by the Sec-
retary of Health and Human Services. 
(c) REPORT.—Not later than 24 months after the 
date of the enactment of this Act, the Comptroller General 
of the United States shall submit to Congress a report 
describing the findings of the study required under sub-
section (a). 
SEC. 227. MEDPAC REPORT ON SHIFTING COVERAGE OF 
CERTAIN MEDICARE PART B DRUGS TO MEDI-
CARE PART D. 
(a) STUDY.—The Medicare Payment Advisory Com-
mission (in this section referred to as the ‘‘Commission’’) 
shall conduct a study on shifting coverage of certain drugs 
and biologicals for which payment is currently made under 
part B of title XVIII of the Social Security Act (42 U.S.C. 
1395j et seq.) to part D of such title (42 U.S.C. 1395w– 
21 et seq.). Such study shall include an analysis of— 
(1) differences in program structures and pay-
ment methods for drugs and biologicals covered 
under such parts B and D, including effects of such 
a shift on program spending, beneficiary cost-shar-
ing liability, and utilization management techniques 
for such drugs and biologicals; and 
(2) the feasibility and policy implications of 
shifting coverage of drugs and biologicals for which 
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payment is currently made under such part B to 
such part D. 
(b) REPORT.— 
(1) IN
GENERAL.—Not later than June 30, 
2024, the Commission shall submit to Congress a re-
port containing the results of the study conducted 
under subsection (a). 
(2) CONTENTS.—The report under paragraph 
(1) shall include information, and recommendations 
as the Commission deems appropriate, regarding— 
(A) formulary design under such part D; 
(B) the ability of the benefit structure 
under such part D to control total spending on 
drugs and biologicals for which payment is cur-
rently made under such part B; 
(C) changes to the bid process under such 
part D, if any, that may be necessary to inte-
grate coverage of such drugs and biologicals 
into such part D; and 
(D) any other changes to the program that 
Congress should consider in determining wheth-
er to shift coverage of such drugs and 
biologicals from such part B to such part D. 
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156 
SEC. 228. TAKING STEPS TO FULFILL TREATY OBLIGATIONS 
TO TRIBAL COMMUNITIES. 
(a) GAO STUDY.—The Comptroller General shall 
conduct a study regarding access to, and the cost of, pre-
scription drugs among Indians. The study shall include— 
(1) a review of what Indian health programs 
pay for prescription drugs on reservations and in 
urban centers relative to other consumers; 
(2) recommendations to align the value of pre-
scription drug discounts available under the Med-
icaid drug rebate program established under section 
1927 of the Social Security Act (42 U.S.C. 1396r– 
8) with prescription drug discounts available to 
Tribal communities through the purchased/referred 
care program of the Indian Health Service for physi-
cian administered drugs; and 
(3) an examination of how Tribal communities 
and urban Indian organizations utilize the Medicare 
part D program established under title XVIII of the 
Social Security Act (42 U.S.C. 1395w–101 et seq.) 
and recommendations to improve enrollment among 
Indians in that program. 
(b) REPORT.—Not later than 18 months after the 
date of the enactment of this Act, the Comptroller General 
shall submit to Congress a report containing the results 
of the study conducted under subsection (a), together with 
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recommendations for such legislation and administrative 
action as the Comptroller General determines appropriate. 
(c) DEFINITIONS.—In this section: 
(1) 
COMPTROLLER
GENERAL.—The 
term 
‘‘Comptroller General’’ means the Comptroller Gen-
eral of the United States. 
(2) INDIAN; INDIAN HEALTH PROGRAM; INDIAN 
TRIBE.—The terms ‘‘Indian’’, ‘‘Indian health pro-
gram’’, and ‘‘Indian tribe’’ have the meanings given 
those terms in section 4 of the Indian Health Care 
Improvement Act (25 U.S.C. 1603). 
TITLE III—MEDICAID 
SEC. 301. MEDICAID PHARMACY AND THERAPEUTICS COM-
MITTEE IMPROVEMENTS. 
(a) IN GENERAL.—Subparagraph (A) of section 
1927(d)(4) of the Social Security Act (42 U.S.C. 1396r– 
8(d)(4)) is amended to read as follows: 
‘‘(A)(i) The formulary is developed and re-
viewed by a pharmacy and therapeutics com-
mittee consisting of physicians, pharmacists, 
and other appropriate individuals appointed by 
the Governor of the State. 
‘‘(ii) Subject to clause (vi), the State estab-
lishes and implements a conflict of interest pol-
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icy for the pharmacy and therapeutics com-
mittee that— 
‘‘(I) is publicly accessible; 
‘‘(II) requires all committee members 
to complete, on at least an annual basis, a 
disclosure of relationships, associations, 
and financial dealings that may affect their 
independence of judgement in committee 
matters; and 
‘‘(III) contains clear processes, such 
as recusal from voting or discussion, for 
those members who report a conflict of in-
terest, along with appropriate processes to 
address any instance where a member fails 
to report a conflict of interest. 
‘‘(iii) The membership of the pharmacy 
and therapeutics committee— 
‘‘(I) includes at least 1 actively prac-
ticing physician and at least 1 actively 
practicing pharmacist, each of whom— 
‘‘(aa) is independent and free of 
conflict with respect to manufacturers 
and Medicaid participating plans or 
subcontractors, including pharmacy 
benefit managers; and 
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‘‘(bb) has expertise in the care of 
1 or more Medicaid-specific popu-
lations such as elderly or disabled in-
dividuals, children with complex med-
ical needs, or low-income individuals 
with chronic illnesses; and 
‘‘(II) is made publicly available. 
‘‘(iv) At the option of the State, the 
State’s drug use review board established under 
subsection (g)(3) may serve as the pharmacy 
and therapeutics committee provided the State 
ensures that such board meets the requirements 
of clauses (ii) and (iii). 
‘‘(v) The State reviews and has final ap-
proval of the formulary established by the phar-
macy and therapeutics committee. 
‘‘(vi) If the Secretary determines it appro-
priate or necessary based on the findings and 
recommendations of the Comptroller General of 
the United States in the report submitted to 
Congress under section 303 of the Reduced 
Costs and Continued Cures Act, the Secretary 
shall issue guidance that States must follow for 
establishing conflict of interest policies for the 
pharmacy and therapeutics committee in ac-
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cordance with the requirements of clause (ii), 
including appropriate standards and require-
ments for identifying, addressing, and reporting 
on conflicts of interest.’’. 
(b) APPLICATION TO MEDICAID MANAGED CARE OR-
GANIZATIONS.—Clause (xiii) of section 1903(m)(2)(A) of 
the Social Security Act (42 U.S.C. 1396b(m)(2)(A)) is 
amended— 
(1) by striking ‘‘and (III)’’ and inserting 
‘‘(III)’’; 
(2) by striking the period at the end and insert-
ing ‘‘, and (IV) any formulary used by the entity for 
covered outpatient drugs dispensed to individuals eli-
gible for medical assistance who are enrolled with 
the entity is developed and reviewed by a pharmacy 
and therapeutics committee that meets the require-
ments 
of 
clauses 
(ii) 
and 
(iii) 
of 
section 
1927(d)(4)(A).’’; and 
(3) by moving the left margin 2 ems to the left. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date that is 1 year 
after the date of enactment of this Act. 
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161 
SEC. 302. IMPROVING REPORTING REQUIREMENTS AND DE-
VELOPING STANDARDS FOR THE USE OF 
DRUG USE REVIEW BOARDS IN STATE MED-
ICAID PROGRAMS. 
(a) IN GENERAL.—Section 1927(g)(3) of the Social 
Security Act (42 U.S.C. 1396r–8(g)(3)) is amended— 
(1) by amending subparagraph (B) to read as 
follows: 
‘‘(B) MEMBERSHIP.— 
‘‘(i) IN GENERAL.—The membership 
of the DUR Board shall include health 
care professionals who have recognized 
knowledge and expertise in one or more of 
the following: 
‘‘(I) The clinically appropriate 
prescribing 
of 
covered 
outpatient 
drugs. 
‘‘(II) The clinically appropriate 
dispensing and monitoring of covered 
outpatient drugs. 
‘‘(III) Drug use review, evalua-
tion, and intervention. 
‘‘(IV) Medical quality assurance. 
‘‘(ii) MEMBERSHIP REQUIREMENTS.— 
The membership of the DUR Board 
shall— 
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‘‘(I) be made up of at least 1⁄3 
but no more than 51 percent members 
who are licensed and actively prac-
ticing physicians and at least 1⁄3 mem-
bers who are licensed and actively 
practicing pharmacists; 
‘‘(II) include at least 1 licensed 
and actively practicing physician and 
at least 1 licensed and actively prac-
ticing pharmacist, each of whom— 
‘‘(aa) is independent and 
free of any conflict, including 
with respect to manufacturers, 
medicaid managed care entities, 
or pharmacy benefit managers; 
and 
‘‘(bb) has expertise in the 
care of 1 or more categories of 
individuals who are likely to be 
eligible for benefits under this 
title, including elderly or disabled 
individuals, children with complex 
medical needs, or low-income in-
dividuals with chronic illnesses; 
and 
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‘‘(III) be made publicly available. 
‘‘(iii) CONFLICT
OF
INTEREST
POL-
ICY.—The State shall establish and imple-
ment a conflict of interest policy for the 
DUR Board that— 
‘‘(I) is publicly accessible; 
‘‘(II) requires all board members 
to complete, on at least an annual 
basis, a disclosure of relationships, as-
sociations, and financial dealings that 
may affect their independence of 
judgement in board matters; and 
‘‘(III) contains clear processes, 
such as recusal from voting or discus-
sion, for those members who report a 
conflict of interest, along with appro-
priate processes to address any in-
stance where a member fails to report 
a conflict of interest.’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(E) DUR 
BOARD
MEMBERSHIP
RE-
PORTS.— 
‘‘(i) DUR BOARD
REPORTS.—Each 
State shall require the DUR Board to pre-
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pare and submit to the State an annual re-
port on the DUR Board membership. Each 
such report shall include any conflicts of 
interest with respect to members of the 
DUR Board that the DUR Board recorded 
or was aware of during the period that is 
the subject of the report, and the process 
applied to address such conflicts of inter-
est, in addition to any other information 
required by the State. 
‘‘(ii) INCLUSION OF DUR BOARD MEM-
BERSHIP
INFORMATION
IN
STATE
RE-
PORTS.—Each annual State report to the 
Secretary required under subparagraph 
(D) shall include— 
‘‘(I) the number of individuals 
serving on the State’s DUR Board; 
‘‘(II) the names and professions 
of the individuals serving on such 
DUR Board; 
‘‘(III) any conflicts of interest or 
recusals with respect to members of 
such DUR Board reported by the 
DUR Board or that the State was 
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aware of during the period that is the 
subject of the report; and 
‘‘(IV) whether the State has 
elected for such DUR Board to serve 
as the committee responsible for de-
veloping a State formulary under sub-
section (d)(4)(A).’’. 
(b) 
MANAGED
CARE
REQUIREMENTS.—Section 
1932(i) of the Social Security Act (42 U.S.C. 1396u–2(i)) 
is amended— 
(1) by striking ‘‘section 483.3(s)(4)’’ and in-
serting ‘‘section 438.3(s)(4)’’; 
(2) by striking ‘‘483.3(s)(5)’’ and inserting 
‘‘438.3(s)(5)’’; and 
(3) by adding at the end the following: ‘‘Such 
a managed care entity shall not be considered to be 
in compliance with the requirement of such section 
438.3(s)(5) that the entity provide a detailed de-
scription of its drug utilization review activities un-
less the entity includes a description of the prospec-
tive drug review activities described in paragraph 
(2)(A) of section 1927(g) and the activities listed in 
paragraph (3)(C) of section 1927(g), makes the un-
derlying drug utilization review data available to the 
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166 
State and the Secretary, and provides such other in-
formation as deemed appropriate by the Secretary.’’. 
(c) DEVELOPMENT OF NATIONAL STANDARDS FOR 
MEDICAID DRUG USE REVIEW.—The Secretary of Health 
and Human Services may promulgate regulations or guid-
ance establishing national standards for Medicaid drug 
use review programs under section 1927(g) of the Social 
Security Act (42 U.S.C. 1396r–8) and drug utilization re-
view activities and requirements under section 1932(i) of 
such Act (42 U.S.C. 1396u–2(i)), for the purpose of align-
ing review criteria for prospective and retrospective drug 
use review across all State Medicaid programs. 
(d) CMS GUIDANCE.—Not later than 18 months 
after the date of enactment of this Act, the Secretary of 
Health and Human Services shall issue guidance— 
(1) outlining steps that States must take to 
come into compliance with statutory and regulatory 
requirements for prospective and retrospective drug 
use review under section 1927(g) of the Social Secu-
rity Act (42 U.S.C. 1396r–8(g)) and drug utilization 
review activities and requirements under section 
1932(i) of such Act (42 U.S.C. 1396u–2(i)) (includ-
ing with respect to requirements that were in effect 
before the date of enactment of this Act); and 
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(2) describing the actions that the Secretary 
will take to enforce such requirements. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date that is 1 year 
after the date of enactment of this Act. 
SEC. 303. GAO REPORT ON CONFLICTS OF INTEREST IN 
STATE MEDICAID PROGRAM DRUG USE RE-
VIEW BOARDS AND PHARMACY AND THERA-
PEUTICS (P&T) COMMITTEES. 
(a) INVESTIGATION.—The Comptroller General of the 
United States shall conduct an investigation of potential 
or existing conflicts of interest among members of State 
Medicaid program State drug use review boards (in this 
section referred to as ‘‘DUR Boards’’) and pharmacy and 
therapeutics committees (in this section referred to as 
‘‘P&T Committees’’). 
(b) REPORT.—Not later than 24 months after the 
date of enactment of this Act, the Comptroller General 
shall submit to Congress a report on the investigation con-
ducted under subsection (a) that includes the following: 
(1) A description outlining how DUR Boards 
and P&T Committees operate in States, including 
details with respect to— 
(A) the structure and operation of DUR 
Boards and statewide P&T Committees; 
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(B) States that operate separate P&T 
Committees for their fee-for-service Medicaid 
program and their Medicaid managed care or-
ganizations or other Medicaid managed care ar-
rangements (collectively referred to in this sec-
tion as ‘‘Medicaid MCOs)’’; and 
(C) States that allow Medicaid MCOs to 
have their own P&T Committees and the extent 
to which pharmacy benefit managers administer 
or participate in such P&T Committees. 
(2) A description outlining the differences be-
tween DUR Boards established in accordance with 
section 1927(g)(3) of the Social Security Act (42 
U.S.C. 1396r(g)(3)) and P&T Committees. 
(3) A description outlining the tools P&T Com-
mittees may use to determine Medicaid drug cov-
erage and utilization management policies. 
(4) An analysis of whether and how States or 
P&T Committees establish participation and inde-
pendence requirements for DUR Boards and P&T 
Committees, including with respect to entities with 
connections with drug manufacturers, State Med-
icaid programs, managed care organizations, and 
other entities or individuals in the pharmaceutical 
industry. 
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(5) A description outlining how States, DUR 
Boards, or P&T Committees define conflicts of inter-
est. 
(6) A description of how DUR Boards and P&T 
Committees address conflicts of interest, including 
who is responsible for implementing such policies. 
(7) A description of the tools, if any, States use 
to ensure that there are no conflicts of interest on 
DUR Boards and P&T Committees. 
(8) An analysis of the effectiveness of tools 
States use to ensure that there are no conflicts of 
interest on DUR Boards and P&T Committees and, 
if applicable, recommendations as to how such tools 
could be improved. 
(9) A review of strategies States may use to 
guard against conflicts of interest on DUR Boards 
and P&T Committees and to ensure compliance with 
the requirements of titles XI and XIX of the Social 
Security Act (42 U.S.C. 1301 et seq., 1396 et seq.) 
and access to effective, clinically appropriate, and 
medically necessary drug treatments for Medicaid 
beneficiaries, including recommendations for such 
legislative and administrative actions as the Comp-
troller General determines appropriate. 
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SEC. 304. ENSURING THE ACCURACY OF MANUFACTURER 
PRICE AND DRUG PRODUCT INFORMATION 
UNDER THE MEDICAID DRUG REBATE PRO-
GRAM. 
(a) AUDIT OF MANUFACTURER PRICE AND DRUG 
PRODUCT INFORMATION.— 
(1) IN GENERAL.—Subparagraph (B) of section 
1927(b)(3) of the Social Security Act (42 U.S.C. 
1396r–8(b)(3)) is amended to read as follows: 
‘‘(B) AUDITS AND SURVEYS OF MANUFAC-
TURER PRICE AND DRUG PRODUCT INFORMA-
TION.— 
‘‘(i) AUDITS.—The Secretary shall 
conduct ongoing audits of the price and 
drug product information reported by man-
ufacturers under subparagraph (A) for the 
most recently ended rebate period to en-
sure the accuracy and timeliness of such 
information. In conducting such audits, the 
Secretary may employ evaluations, surveys, 
statistical sampling, predictive analytics, 
and other relevant tools and methods. 
‘‘(ii) VERIFICATIONS SURVEYS OF AV-
ERAGE MANUFACTURER PRICE AND MANU-
FACTURER’S
AVERAGE
SALES
PRICE.—In 
addition to the audits required under 
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clause (i), the Secretary may survey whole-
salers and manufacturers (including manu-
facturers that directly distribute their cov-
ered outpatient drugs (in this subpara-
graph referred to as ‘direct sellers’)), when 
necessary, to verify manufacturer prices 
and manufacturer’s average sales prices 
(including wholesale acquisition cost) to 
make payment reported under subpara-
graph (A). 
‘‘(iii) PENALTIES.—In addition to 
other penalties as may be prescribed by 
law, including under subparagraph (C) of 
this paragraph, the Secretary may impose 
a civil monetary penalty in an amount not 
to exceed $185,000 on an annual basis on 
a wholesaler, manufacturer, or direct sell-
er, if the wholesaler, manufacturer, or di-
rect seller of a covered outpatient drug re-
fuses a request for information about 
charges or prices by the Secretary in con-
nection with an audit or survey under this 
subparagraph or knowingly provides false 
information. The provisions of section 
1128A (other than subsections (a) (with 
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respect to amounts of penalties or addi-
tional assessments) and (b)) shall apply to 
a civil money penalty under this clause in 
the same manner as such provisions apply 
to a penalty or proceeding under section 
1128A(a). 
‘‘(iv) REPORTS.— 
‘‘(I) REPORT
TO
CONGRESS.— 
The Secretary shall, not later than 18 
months after date of enactment of 
this subparagraph, submit a report to 
the Committee on Energy and Com-
merce of the House of Representatives 
and the Committee on Finance of the 
Senate regarding additional regulatory 
or statutory changes that may be re-
quired in order to ensure accurate and 
timely reporting and oversight of 
manufacturer price and drug product 
information, 
including 
whether 
changes should be made to reasonable 
assumption requirements to ensure 
such assumptions are reasonable and 
accurate or whether another method-
ology for ensuring accurate and timely 
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reporting of price and drug product 
information should be considered to 
ensure the integrity of the drug rebate 
program under this section. 
‘‘(II) ANNUAL
REPORTS.—The 
Secretary shall, on at least an annual 
basis, submit a report to the Com-
mittee on Energy and Commerce of 
the House of Representatives and the 
Committee on Finance of the Senate 
summarizing the results of the audits 
and surveys conducted under this sub-
paragraph during the period that is 
the subject of the report. 
‘‘(III) CONTENT.—Each report 
submitted under subclause (II) shall, 
with respect to the period that is the 
subject of the report, include sum-
maries of— 
‘‘(aa) error rates in the 
price, drug product, and other 
relevant information supplied by 
manufacturers under subpara-
graph (A); 
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‘‘(bb) the timeliness with 
which 
manufacturers, 
whole-
salers, and direct sellers provide 
information required under sub-
paragraph (A) or under clause (i) 
or (ii) of this subparagraph; 
‘‘(cc) the number of manu-
facturers, wholesalers, and direct 
sellers and drug products audited 
under this subparagraph; 
‘‘(dd) the types of price and 
drug product information re-
viewed under the audits con-
ducted under this subparagraph; 
‘‘(ee) the tools and meth-
odologies employed in such au-
dits; 
‘‘(ff) the findings of such 
audits, including which manufac-
turers, if any, were penalized 
under this subparagraph; and 
‘‘(gg) such other relevant in-
formation as the Secretary shall 
deem appropriate. 
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‘‘(IV) PROTECTION OF INFORMA-
TION.—In preparing a report required 
under subclause (II), the Secretary 
shall redact such proprietary informa-
tion as the Secretary determines ap-
propriate to prevent disclosure of, and 
to safeguard, such information. 
‘‘(v) APPROPRIATIONS.—Out of any 
funds in the Treasury not otherwise appro-
priated, there is appropriated to the Sec-
retary $2,000,000 for fiscal year 2023 and 
each fiscal year thereafter to carry out this 
subparagraph.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect on the first day 
of the first fiscal quarter that begins after the date 
of enactment of this Act. 
(b) INCREASED PENALTIES
FOR NONCOMPLIANCE 
WITH REPORTING REQUIREMENTS.— 
(1) INCREASED PENALTY FOR LATE REPORTING 
OF INFORMATION.—Section 1927(b)(3)(C)(i) of the 
Social Security Act (42 U.S.C. 1396r–8(b)(3)(C)(i)) 
is amended by striking ‘‘increased by $10,000 for 
each day in which such information has not been 
provided and such amount shall be paid to the 
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Treasury’’ and inserting ‘‘, for each covered out-
patient drug with respect to which such information 
is not provided, $50,000 for the first day that such 
information is not provided on a timely basis and 
$19,000 for each subsequent day that such informa-
tion is not provided’’. 
(2) INCREASED PENALTY FOR KNOWINGLY RE-
PORTING
FALSE
INFORMATION.—Section 
1927(b)(3)(C)(ii) of the Social Security Act (42 
U.S.C. 1396r–8(b)(3)(C)(ii)) is amended by striking 
‘‘$100,000’’ and inserting ‘‘$500,000’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect on the first day 
of the first fiscal quarter that begins after the date 
of enactment of this Act. 
SEC. 305. T–MSIS DRUG DATA ANALYTICS REPORTS. 
(a) IN GENERAL.—Not later than May 1 of each cal-
endar year beginning with calendar year 2024, the Sec-
retary of Health and Human Services (in this section re-
ferred to as the ‘‘Secretary’’) shall publish on the Internet 
website of the Centers for Medicare & Medicaid Services 
that is accessible to the public a report of the most re-
cently available data on provider prescribing patterns 
under the Medicaid program. 
(b) CONTENT OF REPORT.— 
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(1) REQUIRED
CONTENT.—Each report re-
quired under subsection (a) for a calendar year shall 
include the following information with respect to 
each State (and, to the extent available, with respect 
to Puerto Rico, the United States Virgin Islands, 
Guam, the Northern Mariana Islands, and American 
Samoa): 
(A) A comparison of covered outpatient 
drug (as defined in section 1927(k)(2) of the 
Social Security Act (42 U.S.C. 1396r–8(k)(2))) 
prescribing patterns under the State Medicaid 
plan or waiver of such plan (including drugs 
prescribed on a fee-for-service basis and drugs 
prescribed under managed care arrangements 
under such plan or waiver)— 
(i) across all forms or models of reim-
bursement used under the plan or waiver; 
(ii) within specialties and subspecial-
ties, as defined by the Secretary; 
(iii) by episodes of care for— 
(I) each chronic disease category, 
as defined by the Secretary, that is 
represented in the 10 conditions that 
accounted for the greatest share of 
total spending under the plan or waiv-
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er during the year that is the subject 
of the report; 
(II) procedural groupings; and 
(III) rare disease diagnosis codes; 
(iv) by patient demographic character-
istics, including race (to the extent that 
the Secretary determines that there is suf-
ficient data available with respect to such 
characteristic in a majority of States), gen-
der, and age; 
(v) by patient high-utilizer or risk sta-
tus; and 
(vi) by high and low resource settings 
by facility and place of service categories, 
as determined by the Secretary. 
(B) In the case of medical assistance for 
covered outpatient drugs (as so defined) pro-
vided under a State Medicaid plan or waiver of 
such plan in a managed care setting, an anal-
ysis of the differences in managed care pre-
scribing patterns when a covered outpatient 
drug is prescribed in a managed care setting as 
compared to when the drug is prescribed in a 
fee-for-service setting. 
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(2) ADDITIONAL CONTENT.—A report required 
under subsection (a) for a calendar year may include 
State-specific information about prescription utiliza-
tion management tools under State Medicaid plans 
or waivers of such plans, including— 
(A) a description of prescription utilization 
management tools under State programs to pro-
vide long-term services and supports under a 
State Medicaid plan or a waiver of such plan; 
(B) a comparison of prescription utilization 
management tools applicable to populations cov-
ered under a State Medicaid plan waiver under 
section 1115 of the Social Security Act (42 
U.S.C. 1315) and the models applicable to pop-
ulations that are not covered under the waiver; 
(C) a comparison of the prescription utili-
zation management tools employed by different 
Medicaid managed care organizations, phar-
macy benefit managers, and related entities 
within the State; 
(D) a comparison of the prescription utili-
zation management tools applicable to each en-
rollment category under a State Medicaid plan 
or waiver; and 
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(E) a comparison of the prescription utili-
zation management tools applicable under the 
State Medicaid plan or waiver by patient high- 
utilizer or risk status. 
(3) ADDITIONAL
ANALYSIS.—To the extent 
practicable, the Secretary shall include in each re-
port published under subsection (a)— 
(A) analyses of national, State, and local 
patterns of Medicaid population-based pre-
scribing behaviors; and 
(B) recommendations for administrative or 
legislative action to improve the effectiveness of, 
and reduce costs for, covered outpatient drugs 
under Medicaid while ensuring timely bene-
ficiary access to medically necessary covered 
outpatient drugs. 
(c) USE OF T–MSIS DATA.—Each report required 
under subsection (a) shall— 
(1) be prepared using data and definitions from 
the Transformed Medicaid Statistical Information 
System (‘‘T–MSIS’’) data set (or a successor data 
set) that is not more than 24 months old on the date 
that the report is published; and 
(2) as appropriate, include a description with 
respect to each State of the quality and complete-
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181 
ness of the data, as well as any necessary caveats 
describing the limitations of the data reported to the 
Secretary by the State that are sufficient to commu-
nicate the appropriate uses for the information. 
(d) PREPARATION
OF REPORT.—Each report re-
quired under subsection (a) shall be prepared by the Ad-
ministrator for the Centers for Medicare & Medicaid Serv-
ices. 
(e) APPROPRIATION.—For fiscal year 2023 and each 
fiscal year thereafter, there is appropriated to the Sec-
retary $2,000,000 to carry out this section. 
SEC. 306. RISK-SHARING VALUE-BASED PAYMENT AGREE-
MENTS FOR COVERED OUTPATIENT DRUGS 
UNDER MEDICAID. 
(a) IN GENERAL.—Section 1927 of the Social Secu-
rity Act (42 U.S.C. 1396r–8) is amended by adding at 
the end the following new subsection: 
‘‘(l) STATE OPTION TO PAY FOR COVERED OUT-
PATIENT DRUGS THROUGH RISK-SHARING VALUE-BASED 
AGREEMENTS.— 
‘‘(1) IN
GENERAL.—Beginning January 1, 
2025, a State shall have the option to pay (whether 
on a fee-for-service or managed care basis) for cov-
ered outpatient drugs that are potentially curative 
treatments intended for one-time use that are ad-
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ministered to individuals under this title by entering 
into a risk-sharing value-based payment agreement 
with the manufacturer of the drug in accordance 
with the requirements of this subsection. 
‘‘(2) SECRETARIAL APPROVAL.— 
‘‘(A) IN GENERAL.—A State shall submit a 
request to the Secretary to enter into a risk- 
sharing value based payment agreement, and 
the Secretary shall not approve a proposed risk- 
sharing value-based payment agreement be-
tween a State and a manufacturer for payment 
for a covered outpatient drug of the manufac-
turer unless the following requirements are met: 
‘‘(i) MANUFACTURER IS PARTY TO RE-
BATE
AGREEMENT
AND
IN
COMPLIANCE 
WITH REQUIREMENTS.—The manufacturer 
has a rebate agreement in effect as re-
quired under subsections (a) and (b) of 
this section and is in compliance with all 
applicable requirements under this title. 
‘‘(ii) NO
INCREASE
TO
PROJECTED 
NET FEDERAL SPENDING.— 
‘‘(I) IN
GENERAL.—The Chief 
Actuary certifies that the projected 
payments for each covered outpatient 
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drug under such proposed agreement 
would not result in greater estimated 
Federal spending under this title than 
the net Federal spending that would 
result in the absence of the agree-
ment. 
‘‘(II) NET
FEDERAL
SPENDING 
DEFINED.—For purposes of this sub-
section, the term ‘net Federal spend-
ing’ means the amount of Federal 
payments the Chief Actuary estimates 
would be made under this title for ad-
ministering a covered outpatient drug 
to an individual eligible for medical 
assistance under a State plan or a 
waiver of such plan, reduced by the 
amount of all rebates the Chief Actu-
ary estimates would be paid with re-
spect to the administering of such 
drug, including all rebates under this 
title and any supplemental or other 
additional rebates, in the absence of 
such an agreement. 
‘‘(III) INFORMATION.—The Chief 
Actuary shall make the certifications 
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required under this clause based on 
the most recently available and reli-
able drug pricing and product infor-
mation. The State and manufacturer 
shall provide the Secretary and the 
Chief Actuary with all necessary infor-
mation required to make the estimates 
needed for such certifications. 
‘‘(iii) LAUNCH AND LIST PRICE JUS-
TIFICATIONS.—The manufacturer submits 
all relevant information and supporting 
documentation necessary for pricing deci-
sions as deemed appropriate by the Sec-
retary, which shall be truthful and non- 
misleading, including manufacturer infor-
mation and supporting documentation for 
launch price or list price increases, and 
any applicable justification required under 
section 1128L. 
‘‘(iv) CONFIDENTIALITY OF INFORMA-
TION; PENALTIES.—The provisions of sub-
paragraphs (C) and (D) of subsection 
(b)(3) shall apply to a manufacturer that 
fails to submit the information and docu-
mentation required under clauses (ii) and 
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(iii) on a timely basis, or that knowingly 
provides false or misleading information, in 
the same manner as such provisions apply 
to a manufacturer with a rebate agreement 
under this section. 
‘‘(B) CONSIDERATION OF STATE REQUEST 
FOR APPROVAL.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall treat a State request for approval of 
a risk-sharing value-based payment agree-
ment in the same manner that the Sec-
retary treats a State plan amendment, and 
subpart B of part 430 of title 42, Code of 
Federal Regulations, including, subject to 
clause (ii), the timing requirements of sec-
tion 430.16 of such title (as in effect on 
the date of enactment of this subsection), 
shall apply to a request for approval of a 
risk-sharing value-based payment agree-
ment in the same manner as such subpart 
applies to a State plan amendment. 
‘‘(ii) TIMING.—The Secretary shall 
consult with the Commissioner of Food 
and Drugs as required under subpara-
graph (C) and make a determination on 
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whether to approve a request from a State 
for approval of a proposed risk-sharing 
value-based payment agreement (or request 
additional information necessary to allow 
the Secretary to make a determination 
with respect to such request for approval) 
within the time period, to the extent prac-
ticable, specified in section 430.16 of title 
42, Code of Federal Regulations (as in ef-
fect on the date of enactment of this sub-
section), but in no case shall the Secretary 
take more than 180 days after the receipt 
of such request for approval or response to 
such request for additional information to 
make such a determination (or request ad-
ditional information). 
‘‘(C) CONSULTATION WITH THE COMMIS-
SIONER OF FOOD AND DRUGS.—In considering 
whether to approve a risk-sharing value-based 
payment agreement, the Secretary, to the ex-
tent necessary, shall consult with the Commis-
sioner of Food and Drugs to determine whether 
the relevant clinical parameters specified in 
such agreement are appropriate. 
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‘‘(3) INSTALLMENT-BASED
PAYMENT
STRUC-
TURE.— 
‘‘(A) IN GENERAL.—A risk-sharing value- 
based payment agreement shall provide for a 
payment structure under which, for every in-
stallment year of the agreement (subject to sub-
paragraph (B)), the State shall pay the total in-
stallment year amount in equal installments to 
be paid at regular intervals over a period of 
time that shall be specified in the agreement. 
‘‘(B) REQUIREMENTS
FOR
INSTALLMENT 
PAYMENTS.— 
‘‘(i) TIMING
OF
FIRST
PAYMENT.— 
The State shall make the first of the in-
stallment payments described in subpara-
graph (A) for an installment year not later 
than 30 days after the end of such year. 
‘‘(ii) LENGTH OF INSTALLMENT PE-
RIOD.—The period of time over which the 
State shall make the installment payments 
described in subparagraph (A) for an in-
stallment year shall not be longer than 5 
years. 
‘‘(iii) NONPAYMENT
OR
REDUCED 
PAYMENT OF INSTALLMENTS FOLLOWING 
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A
FAILURE
TO
MEET
CLINICAL
PARAM-
ETER.—If, prior to the payment date (as 
specified in the agreement) of any install-
ment payment described in subparagraph 
(A) or any other alternative date or time 
frame (as otherwise specified in the agree-
ment), the covered outpatient drug which 
is subject to the agreement fails to meet a 
relevant clinical parameter of the agree-
ment, the agreement shall provide that— 
‘‘(I) the installment payment 
shall not be made; or 
‘‘(II) the installment payment 
shall be reduced by a percentage spec-
ified in the agreement that is based 
on the outcome achieved by the drug 
relative to the relevant clinical param-
eter. 
‘‘(4) NOTICE OF INTENT.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a manufacturer of a covered out-
patient drug shall not be eligible to enter into 
a risk-sharing value-based payment agreement 
under this subsection with respect to such drug 
unless the manufacturer notifies the Secretary 
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that the manufacturer is interested in entering 
into such an agreement with respect to such 
drug. The decision to submit and timing of a 
request to enter into a proposed risk-sharing 
value-based payment agreement shall remain 
solely within the discretion of the State and 
shall only be effective upon Secretarial approval 
as required under this subsection. 
‘‘(B) TREATMENT OF SUBSEQUENTLY AP-
PROVED DRUGS.— 
‘‘(i) IN GENERAL.—In the case of a 
manufacturer of a covered outpatient drug 
approved under section 505 of the Federal 
Food, Drug, and Cosmetic Act or licensed 
under section 351 of the Public Health 
Service Act after the date of enactment of 
this subsection, not more than 90 days 
after meeting with the Food and Drug Ad-
ministration following phase II clinical 
trials for such drug (or, in the case of a 
drug described in clause (ii), not later than 
March 31, 2025), the manufacturer must 
notify the Secretary of the manufacturer’s 
intent to enter into a risk-sharing value- 
based payment agreement under this sub-
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section with respect to such drug. If no 
such meeting has occurred, the Secretary 
may use discretion as to whether a poten-
tially curative treatment intended for one- 
time use may qualify for a risk-sharing 
value-based payment agreement under this 
section. A manufacturer notification of in-
terest shall not have any influence on a de-
cision for approval by the Food and Drug 
Administration. 
‘‘(ii) APPLICATION TO CERTAIN SUB-
SEQUENTLY
APPROVED
DRUGS.—A drug 
described in this clause is a covered out-
patient drug of a manufacturer— 
‘‘(I) that is approved under sec-
tion 505 of the Federal Food, Drug, 
and Cosmetic Act or licensed under 
section 351 of the Public Health Serv-
ice Act after the date of enactment of 
this subsection; and 
‘‘(II) with respect to which, as of 
January 1, 2025, more than 90 days 
have passed after the manufacturer’s 
meeting with the Food and Drug Ad-
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ministration following phase II clinical 
trials for such drug. 
‘‘(iii) 
PARALLEL
APPROVAL.—The 
Secretary, in coordination with the Admin-
istrator of the Centers for Medicare & 
Medicaid Services and the Commissioner of 
Food and Drugs, shall, to the extent prac-
ticable, approve a State’s request to enter 
into a proposed risk-sharing value-based 
payment agreement that otherwise meets 
the requirements of this subsection at the 
time that such a drug is approved by the 
Food and Drug Administration to help 
provide that no State that wishes to enter 
into such an agreement is required to pay 
for the drug in full at one time if the State 
is seeking to pay over a period of time as 
outlined in the proposed agreement. 
‘‘(iv) RULE
OF
CONSTRUCTION.— 
Nothing in this paragraph shall be applied 
or construed to modify or affect the time-
frames or factors involved in the Sec-
retary’s determination of whether to ap-
prove or license a drug under section 505 
of the Federal Food, Drug, and Cosmetic 
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Act or section 351 of the Public Health 
Service Act. 
‘‘(5) SPECIAL PAYMENT RULES.— 
‘‘(A) IN GENERAL.—Except as otherwise 
provided in this paragraph, with respect to an 
individual who is administered a unit of a cov-
ered outpatient drug that is purchased under a 
State plan by a State Medicaid agency under a 
risk-sharing value-based payment agreement in 
an installment year, the State shall remain lia-
ble to the manufacturer of such drug for pay-
ment for such unit without regard to whether 
the individual remains enrolled in the State 
plan under this title (or a waiver of such plan) 
for each installment year for which the State is 
to make installment payments for covered out-
patient drugs purchased under the agreement 
in such year. 
‘‘(B) DEATH.—In the case of an individual 
described in subparagraph (A) who dies during 
the period described in such subparagraph, the 
State plan shall not be liable for any remaining 
payment for the unit of the covered outpatient 
drug administered to the individual which is 
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owed under the agreement described in such 
subparagraph. 
‘‘(C) WITHDRAWAL OF APPROVAL.—In the 
case of a covered outpatient drug that is the 
subject of a risk-sharing value-based agreement 
between a State and a manufacturer under this 
subsection, including a drug approved in ac-
cordance with section 506(c) of the Federal 
Food, Drug, and Cosmetic Act, and such drug 
is the subject of an application that has been 
withdrawn by the Secretary, the State plan 
shall not be liable for any remaining payment 
that is owed under the agreement. 
‘‘(D) ALTERNATIVE ARRANGEMENT UNDER 
AGREEMENT.—Subject to approval by the Sec-
retary, the terms of a proposed risk-sharing 
value-based payment agreement submitted for 
approval by a State may provide that subpara-
graph (A) shall not apply. 
‘‘(E) GUIDANCE.—Not later than January 
1, 2025, the Secretary shall issue guidance to 
States establishing a process for States to no-
tify the Secretary when an individual who is ad-
ministered a unit of a covered outpatient drug 
that is purchased by a State plan under a risk- 
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sharing value-based payment agreement ceases 
to be enrolled under the State plan under this 
title (or a waiver of such plan) or dies before 
the end of the installment period applicable to 
such unit under the agreement. 
‘‘(6) TREATMENT OF PAYMENTS UNDER RISK- 
SHARING
VALUE-BASED
AGREEMENTS
FOR
PUR-
POSES OF AVERAGE MANUFACTURER PRICE; BEST 
PRICE.—The Secretary shall treat any payments 
made to the manufacturer of a covered outpatient 
drug under a risk-sharing value-based payment 
agreement under this subsection during a rebate pe-
riod in the same manner that the Secretary treats 
payments made under a State supplemental rebate 
agreement 
under 
sections 
447.504(c)(19) 
and 
447.505(c)(7) of title 42, Code of Federal Regula-
tions (or any successor regulations) for purposes of 
determining average manufacturer price and best 
price under this section with respect to the covered 
outpatient drug and a rebate period and for pur-
poses of offsets required under subsection (b)(1)(B). 
‘‘(7) ASSESSMENTS
AND
REPORT
TO
CON-
GRESS.— 
‘‘(A) ASSESSMENTS.— 
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‘‘(i) IN
GENERAL.—Not later than 
180 days after the end of each assessment 
period of any risk-sharing value-based pay-
ment agreement for a State approved 
under this subsection, the Secretary shall 
conduct an evaluation of such agreement 
which shall include an evaluation by the 
Chief Actuary to determine whether pro-
gram spending under the risk-sharing 
value-based payment agreement aligned 
with the projections for the agreement 
made under paragraph (2)(A)(ii), including 
an assessment of whether actual Federal 
spending under this title under the agree-
ment was less or more than net Federal 
spending would have been in the absence 
of the agreement. 
‘‘(ii) ASSESSMENT PERIOD.—For pur-
poses of clause (i)— 
‘‘(I) the first assessment period 
for a risk-sharing value-based pay-
ment agreement shall be the period of 
time over which payments are sched-
uled to be made under the agreement 
for the first 10 individuals who are 
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administered covered outpatient drugs 
under the agreement except that such 
period shall not exceed the 5-year pe-
riod after the date on which the Sec-
retary approves the agreement; and 
‘‘(II) each subsequent assessment 
period for a risk-sharing value-based 
payment agreement shall be the 5- 
year period following the end of the 
previous assessment period. 
‘‘(B) RESULTS OF ASSESSMENTS.— 
‘‘(i) TERMINATION
OPTION.—If the 
Secretary determines as a result of the as-
sessment by the Chief Actuary under sub-
paragraph (A) that the actual Federal 
spending under this title for any covered 
outpatient drug that was the subject of the 
State’s risk-sharing value-based payment 
agreement was greater than the net Fed-
eral spending that would have resulted in 
the absence of the agreement, the Sec-
retary may terminate approval of such 
agreement and shall immediately conduct 
an assessment under this paragraph of any 
other ongoing risk-sharing value-based 
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payment agreement to which the same 
manufacturer is a party. 
‘‘(ii) REPAYMENT REQUIRED.— 
‘‘(I) IN
GENERAL.—If the Sec-
retary determines as a result of the 
assessment by the Chief Actuary 
under subparagraph (A) that the Fed-
eral spending under the risk-sharing 
value-based agreement for a covered 
outpatient drug that was subject to 
such agreement was greater than the 
net Federal spending that would have 
resulted in the absence of the agree-
ment, the manufacturer shall repay 
the difference to the State and Fed-
eral governments in a timely manner 
as determined by the Secretary. 
‘‘(II) TERMINATION
FOR
FAIL-
URE TO PAY.—The failure of a manu-
facturer to make repayments required 
under subclause (I) in a timely man-
ner shall result in immediate termi-
nation of all risk-sharing value-based 
agreements to which the manufacturer 
is a party. 
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‘‘(III) 
ADDITIONAL
PEN-
ALTIES.—In the case of a manufac-
turer that fails to make repayments 
required under subclause (I), the Sec-
retary may treat such manufacturer 
in the same manner as a manufac-
turer that fails to pay required re-
bates under this section, and the Sec-
retary may— 
‘‘(aa) suspend or terminate 
the manufacturer’s rebate agree-
ment under this section; and 
‘‘(bb) pursue any other rem-
edy that would be available if the 
manufacturer had failed to pay 
required rebates under this sec-
tion. 
‘‘(C) REPORT
TO
CONGRESS.—Not later 
than 5 years after the first risk-sharing value- 
based payment agreement is approved under 
this subsection, the Secretary shall submit to 
Congress and make available to the public a re-
port that includes— 
‘‘(i) an assessment of the impact of 
risk-sharing value-based payment agree-
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ments on access for individuals who are eli-
gible for benefits under a State plan or 
waiver under this title to medically nec-
essary covered outpatient drugs and re-
lated treatments; 
‘‘(ii) an analysis of the impact of such 
agreements on overall State and Federal 
spending under this title; 
‘‘(iii) an assessment of the impact of 
such agreements on drug prices, including 
launch price and price increases; and 
‘‘(iv) such recommendations to Con-
gress as the Secretary deems appropriate. 
‘‘(8) GUIDANCE AND REGULATIONS.— 
‘‘(A) IN GENERAL.—Not later than Janu-
ary 1, 2025, the Secretary shall issue guidance 
to States seeking to enter into risk-sharing 
value-based payment agreements under this 
subsection that includes a model template for 
such agreements. The Secretary may issue any 
additional guidance or promulgate regulations 
as necessary to implement and enforce the pro-
visions of this subsection. 
‘‘(B) MODEL AGREEMENTS.— 
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‘‘(i) IN
GENERAL.—If a State ex-
presses an interest in pursuing a risk-shar-
ing value-based payment agreement under 
this subsection with a manufacturer for 
the purchase of a covered outpatient drug, 
the Secretary may share with such State 
any risk-sharing value-based agreement be-
tween a State and the manufacturer for 
the purchase of such drug that has been 
approved under this subsection. While such 
shared agreement may serve as a template 
for a State that wishes to propose, the use 
of a previously approved agreement shall 
not affect the submission and approval 
process for approval of a proposed risk- 
sharing value-based payment agreement 
under this subsection, including the re-
quirements under paragraph (2)(A). 
‘‘(ii) CONFIDENTIALITY.—In the case 
of a risk-sharing value-based payment 
agreement that is disclosed to a State by 
the Secretary under this subparagraph and 
that is only in effect with respect to a sin-
gle State, the confidentiality of information 
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provisions 
described 
in 
subsection 
(b)(3)(D) shall apply to such information. 
‘‘(C) OIG CONSULTATION.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall consult with the Office of the Inspec-
tor General of the Department of Health 
and Human Services to determine whether 
there are potential program integrity con-
cerns with agreement approvals or tem-
plates and address accordingly. 
‘‘(ii) OIG POLICY UPDATES AS NEC-
ESSARY.—The Inspector General of the 
Department of Health and Human Serv-
ices shall review and update, as necessary, 
any policies or guidelines of the Office of 
the Inspector General of the Department 
of Human Services (including policies re-
lated to the enforcement of section 1128B) 
to accommodate the use of risk-sharing 
value-based payment agreements in accord-
ance with this section. 
‘‘(9) RULES OF CONSTRUCTION.— 
‘‘(A) MODIFICATIONS.—Nothing in this 
subsection or any regulations promulgated 
under this subsection shall prohibit a State 
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from requesting a modification from the Sec-
retary to the terms of a risk-sharing value- 
based payment agreement. A modification that 
is expected to result in any increase to pro-
jected net State or Federal spending under the 
agreement shall be subject to recertification by 
the Chief Actuary as described in paragraph 
(2)(A)(ii) before the modification may be ap-
proved. 
‘‘(B) REBATE AGREEMENTS.—Nothing in 
this subsection shall be construed as requiring 
a State to enter into a risk-sharing value-based 
payment agreement or as limiting or super-
seding the ability of a State to enter into a sup-
plemental rebate agreement for a covered out-
patient drug. 
‘‘(C) FFP FOR PAYMENTS UNDER RISK- 
SHARING
VALUE-BASED
PAYMENT
AGREE-
MENTS.—Federal financial participation shall 
be available under this title for any payment 
made by a State to a manufacturer for a cov-
ered outpatient drug under a risk-sharing 
value-based payment agreement in accordance 
with this subsection, except that no Federal fi-
nancial participation shall be available for any 
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payment made by a State to a manufacturer 
under such an agreement on and after the ef-
fective date of a disapproval of such agreement 
by the Secretary. 
‘‘(D) CONTINUED APPLICATION OF OTHER 
PROVISIONS.—Except as expressly provided in 
this subsection, nothing in this subsection or in 
any regulations promulgated under this sub-
section shall affect the application of any other 
provision of this Act. 
‘‘(10) APPROPRIATIONS.—For fiscal year 2023 
and each fiscal year thereafter, there are appro-
priated to the Secretary $5,000,000 for the purpose 
of carrying out this subsection. 
‘‘(11) DEFINITIONS.—In this subsection: 
‘‘(A) CHIEF ACTUARY.—The term ‘Chief 
Actuary’ means the Chief Actuary of the Cen-
ters for Medicare & Medicaid Services. 
‘‘(B) INSTALLMENT YEAR.—The term ‘in-
stallment year’ means, with respect to a risk- 
sharing value-based payment agreement, a 12- 
month period during which a covered outpatient 
drug is administered under the agreement. 
‘‘(C) POTENTIALLY CURATIVE TREATMENT 
INTENDED FOR ONE-TIME USE.—The term ‘po-
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tentially curative treatment intended for one- 
time use’ means a treatment that consists of 
the administration of a covered outpatient drug 
that— 
‘‘(i) is a form of gene therapy for a 
rare disease, as defined by the Commis-
sioner of Food and Drugs, designated 
under section 526 of the Federal Food, 
Drug, and Cosmetics Act, and approved 
under section 505 of such Act or licensed 
under subsection (a) or (k) of section 351 
of the Public Health Service Act to treat 
a serious or life-threatening disease or con-
dition; 
‘‘(ii) if administered in accordance 
with the labeling of such drug, is expected 
to result in either— 
‘‘(I) the cure of such disease or 
condition; or 
‘‘(II) a reduction in the symp-
toms of such disease or condition to 
the extent that such disease or condi-
tion is not expected to lead to early 
mortality; and 
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‘‘(iii) is expected to achieve a result 
described in clause (ii), which may be 
achieved over an extended period of time, 
after not more than 3 administrations. 
‘‘(D) RELEVANT CLINICAL PARAMETER.— 
The term ‘relevant clinical parameter’ means, 
with respect to a covered outpatient drug that 
is the subject of a risk-sharing value-based pay-
ment agreement— 
‘‘(i) a clinical endpoint specified in the 
drug’s labeling or supported by one or 
more of the compendia described in section 
1861(t)(2)(B)(ii)(I) that— 
‘‘(I) is able to be measured or 
evaluated on an annual basis for each 
year of the agreement on an inde-
pendent basis by a provider or other 
entity; and 
‘‘(II) is required to be achieved 
(based on observed metrics in patient 
populations) under the terms of the 
agreement; or 
‘‘(ii) a surrogate endpoint (as defined 
in section 507(e)(9) of the Federal Food, 
Drug, and Cosmetic Act), including those 
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developed by patient-focused drug develop-
ment tools, that— 
‘‘(I) is able to be measured or 
evaluated on an annual basis for each 
year of the agreement on an inde-
pendent basis by a provider or other 
entity; and 
‘‘(II) has been qualified by the 
Food and Drug Administration. 
‘‘(E) RISK-SHARING
VALUE-BASED
PAY-
MENT
AGREEMENT.—The term ‘risk-sharing 
value-based payment agreement’ means an 
agreement between a State plan and a manu-
facturer— 
‘‘(i) for the purchase of a covered out-
patient drug of the manufacturer that is a 
potentially curative treatment intended for 
one-time use; 
‘‘(ii) under which payment for such 
drug shall be made pursuant to an install-
ment-based payment structure that meets 
the requirements of paragraph (3); 
‘‘(iii) which conditions payment on the 
achievement of at least 2 relevant clinical 
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parameters (as defined in subparagraph 
(C)); 
‘‘(iv) which provides that— 
‘‘(I) the State plan will directly 
reimburse the manufacturer for the 
drug; or 
‘‘(II) a third party will reimburse 
the manufacture in a manner ap-
proved by the Secretary; and 
‘‘(v) is approved by the Secretary in 
accordance with paragraph (2). 
‘‘(F) 
TOTAL
INSTALLMENT
YEAR 
AMOUNT.—The term ‘total installment year 
amount’ means, with respect to a risk-sharing 
value-based payment agreement for the pur-
chase of a covered outpatient drug and an in-
stallment year, an amount equal to the product 
of— 
‘‘(i) the unit price of the drug charged 
under the agreement; and 
‘‘(ii) the number of units of such drug 
administered under the agreement during 
such installment year.’’. 
(b) CONFORMING AMENDMENTS.— 
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(1) Section 1903(i)(10)(A) of the Social Secu-
rity Act (42 U.S.C. 1396b(i)(10)(A)) is amended by 
striking ‘‘or unless section 1927(a)(3) applies’’ and 
inserting ‘‘, section 1927(a)(3) applies with respect 
to such drugs, or such drugs are the subject of a 
risk-sharing value-based payment agreement under 
section 1927(l)’’. 
(2) Section 1927(b) of the Social Security Act 
(42 U.S.C. 1396r–8(b)) is amended— 
(A) in paragraph (1)(A), by inserting ‘‘(ex-
cept for drugs for which payment is made by a 
State under a risk-sharing value-based payment 
agreement under subsection (l))’’ after ‘‘under 
the State plan for such period’’; and 
(B) in paragraph (3)— 
(i) in subparagraph (C)(i), by insert-
ing ‘‘or subsection (l)(2)(A)’’ after ‘‘sub-
paragraph (A)’’; and 
(ii) in subparagraph (D), in the mat-
ter preceding clause (i), by inserting ‘‘, 
under subsection (l)(2)(A),’’ after ‘‘under 
this paragraph’’. 
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SEC. 307. MODIFICATION OF MAXIMUM REBATE AMOUNT 
UNDER MEDICAID DRUG REBATE PROGRAM. 
(a) IN GENERAL.—Subparagraph (D) of section 
1927(c)(2) of the Social Security Act (42 U.S.C. 1396r– 
8(c)(2)) is amended to read as follows: 
‘‘(D) MAXIMUM REBATE AMOUNT.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), in no case shall the 
sum of the amounts applied under para-
graph (1)(A)(ii) and this paragraph with 
respect to each dosage form and strength 
of a single source drug or an innovator 
multiple source drug for a rebate period 
exceed— 
‘‘(I) for rebate periods beginning 
after December 31, 2009, and before 
September 30, 2025, 100 percent of 
the average manufacturer price of the 
drug; and 
‘‘(II) for rebate periods beginning 
on or after October 1, 2025, 125 per-
cent of the average manufacturer 
price of the drug. 
‘‘(ii) NO
MAXIMUM
AMOUNT
FOR 
DRUGS
IF
AMP
INCREASES
OUTPACE
IN-
FLATION.— 
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210 
‘‘(I) IN GENERAL.—If the aver-
age manufacturer price with respect 
to each dosage form and strength of 
a single source drug or an innovator 
multiple source drug increases on or 
after October 1, 2024, and such in-
creased average manufacturer price 
exceeds the inflation-adjusted average 
manufacturer price determined with 
respect to such drug under subclause 
(II) for the rebate period, clause (i) 
shall not apply and there shall be no 
limitation on the sum of the amounts 
applied under paragraph (1)(A)(ii) 
and this paragraph for the rebate pe-
riod with respect to each dosage form 
and strength of the single source drug 
or innovator multiple source drug. 
‘‘(II) INFLATION-ADJUSTED
AV-
ERAGE
MANUFACTURER
PRICE
DE-
FINED.—In this clause, the term ‘in-
flation-adjusted average manufacturer 
price’ means, with respect to a single 
source drug or an innovator multiple 
source drug and a rebate period, the 
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211 
average manufacturer price for each 
dosage form and strength of the drug 
for the calendar quarter beginning 
July 1, 1990 (without regard to 
whether or not the drug has been sold 
or transferred to an entity, including 
a division or subsidiary of the manu-
facturer, after the 1st day of such 
quarter), increased by the percentage 
by which the consumer price index for 
all urban consumers (United States 
city average) for the month before the 
month in which the rebate period be-
gins exceeds such index for September 
1990.’’. 
(b) TREATMENT
OF
SUBSEQUENTLY
APPROVED 
DRUGS.—Section 1927(c)(2)(B) of the Social Security Act 
(42 U.S.C. 1396r–8(c)(2)(B)) is amended by inserting 
‘‘and clause (ii)(II) of subparagraph (D)’’ after ‘‘clause 
(ii)(II) of subparagraph (A)’’. 
(c) 
TECHNICAL
AMENDMENTS.—Section 
1927(c)(3)(C)(ii)(IV) of the Social Security Act (42 
U.S.C. 1396r–9(c)(3)(C)(ii)(IV)) is amended— 
(1) by striking ‘‘subparagraph (A)’’ and insert-
ing ‘‘paragraph (3)(A)’’; and 
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212 
(2) by striking ‘‘this subparagraph’’ and insert-
ing ‘‘paragraph (3)(C)’’. 
TITLE IV—ADDRESSING INTER-
MEDIARIES AND DRUG COM-
PETITION 
SEC. 401. HEALTH PLAN OVERSIGHT OF PHARMACY BEN-
EFIT MANAGER SERVICES. 
Subpart II of part A of title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg–11 et seq.) is 
amended by adding at the end the following: 
‘‘SEC. 2729A. HEALTH PLAN OVERSIGHT OF PHARMACY 
BENEFIT MANAGER SERVICES. 
‘‘(a) IN GENERAL.—A group health plan or health 
insurance issuer offering group or individual health insur-
ance coverage or an entity or subsidiary providing phar-
macy benefits management services shall not enter into 
a contract with a drug manufacturer, distributor, whole-
saler, subcontractor, rebate aggregator, or any associated 
third party that limits the disclosure of information to 
plan sponsors in such a manner that prevents the plan 
or coverage, or an entity or subsidiary providing pharmacy 
benefits management services on behalf of a plan or cov-
erage from making the reports described in subsection (b). 
‘‘(b) REPORTS TO GROUP PLAN SPONSORS.— 
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