(b) for an individual that is provided a prescription for 
such drug. 
‘‘(b) COST SHARING.—Beginning with plan years be-
ginning 90 days after the date of the enactment of this 
section, the cost sharing incurred under a plan or coverage 
described in subsection (a) for an insulin drug may not 
exceed $10 for each 1-month period of coverage. 
‘‘(c) INSULIN DRUG DEFINED.—In this section, the 
term ‘insulin drug’ has the meaning given such term in 
section 1150C(f)(3) of the Social Security Act.’’. 
(2) MEDICARE AMENDMENTS.— 
(A) COINSURANCE
LIMITATION.—Section 
1860D–2(b)(2) of the Social Security Act (42 
U.S.C. 1395w–102(b)(2)) is amended— 
(i) in subparagraph (A), by striking 
‘‘Subject to subparagraphs (C) and (D)’’ 
and inserting ‘‘Subject to subparagraphs 
(C), (D), and (E)’’; and 
(ii) by adding at the end, the fol-
lowing new subparagraph: 
‘‘(E) COVERAGE
FOR
INSULIN
DRUGS.— 
Beginning with plan years beginning 90 days 
after the date of the enactment of this subpara-
graph, the coverage has coinsurance (for costs 
above the annual deductible specified in para-
VerDate Sep 11 2014 
03:14 Feb 05, 2020
Jkt 099200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H5749.IH
H5749
kjohnson on DSK79L0C42PROD with BILLS
graph (1) and up to the initial coverage limit 
under paragraph (3)) for an insulin drug (as 
defined in section 1861(kkk)) is not more than 
$10 for each 1-month period of coverage.’’. 
(B) INSULIN
DRUG
DEFINED.—Section 
1861 of the Social Security Act (42 U.S.C. 
1395x) is amended by adding at the end the 
following new subsection: 
‘‘(kkk) INSULIN DRUG.—The term ‘insulin drug’ has 
the meaning given such term in section 1150C(f)(3) fur-
nished on or after 90 days after the date of the enactment 
of this subsection.’’. 
(d) FREEZING
OF SUPPLEMENTAL REBATES
IN 
MEDICAID.—Section 1902(a) of the Social Security Act 
(42 U.S.C. 1396a(a)) is amended— 
(1) in paragraph (85), by striking at the end 
‘‘and’’; 
(2) in paragraph (86), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by inserting after paragraph (86), the fol-
lowing new paragraph: 
‘‘(87) provide that the State may not— 
‘‘(A) secure from the manufacturer of a 
drug payable under this title a supplemental re-
bate that is not a rebate under section 1927 
VerDate Sep 11 2014 
03:14 Feb 05, 2020
Jkt 099200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H5749.IH
H5749
kjohnson on DSK79L0C42PROD with BILLS
that exceeds the amount of the supplemental re-
bate on the date of the enactment of this para-
graph; or 
‘‘(B) secure any other supplemental re-
bates.’’. 
(e) ELIMINATION
OF SPREAD PRICING
AND RE-
LATED PRACTICES IN MEDICAID.— 
(1) IN GENERAL.—Section 1927(e) of the So-
cial Security Act (42 U.S.C. 1396r–8(e)) is amended 
by adding at the end the following: 
‘‘(6) PASS-THROUGH
PRICING
REQUIRED.—A 
contract between the State and a pharmacy benefit 
manager (referred to in this paragraph as a ‘PBM’), 
or a contract between the State and a managed care 
entity or other specified entity (as such terms are 
defined in section 1903(m)(9)(D)) that includes pro-
visions making the entity responsible for coverage of 
covered outpatient drugs dispensed to individuals en-
rolled with the entity, shall require that payment for 
such drugs and related administrative services (as 
applicable), including payments made by a PBM on 
behalf of the State or entity, is based on a pass- 
through pricing model under which— 
‘‘(A) any payment made by the entity or 
the PBM (as applicable) for such a drug— 
VerDate Sep 11 2014 
03:14 Feb 05, 2020
Jkt 099200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H5749.IH
H5749
kjohnson on DSK79L0C42PROD with BILLS
‘‘(i) is limited to— 
‘‘(I) ingredient cost; and 
‘‘(II) a professional dispensing 
fee that is not less than the profes-
sional dispensing fee that the State 
plan or waiver would pay if the plan 
or waiver was making the payment di-
rectly; 
‘‘(ii) is passed through in its entirety 
by the entity or PBM to the pharmacy 
that dispenses the drug; and 
‘‘(iii) is made in a manner that is con-
sistent with section 1902(a)(30)(A) and 
sections 447.512, 447.514, and 447.518 of 
title 42, Code of Federal Regulations (or 
any successor regulation) as if such re-
quirements applied directly to the entity or 
the PBM; 
‘‘(B) payment to the entity or the PBM 
(as applicable) for administrative services per-
formed by the entity or PBM is limited to a 
reasonable administrative fee that covers the 
reasonable cost of providing such services; 
‘‘(C) the entity or the PBM (as applicable) 
shall make available to the State, and the Sec-
VerDate Sep 11 2014 
03:14 Feb 05, 2020
Jkt 099200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H5749.IH
H5749
kjohnson on DSK79L0C42PROD with BILLS
retary upon request, all costs and payments re-
lated to covered outpatient drugs and accom-
panying administrative services incurred, re-
ceived, or made by the entity or the PBM, in-
cluding ingredient costs, professional dispensing 
fees, administrative fees, post-sale and post-in- 
voice fees. Discounts, or related adjustments 
such as direct and indirect remuneration fees, 
and any and all remuneration; and 
‘‘(D) any form of spread pricing whereby 
any amount charged or claimed by the entity or 
the PBM (as applicable) that is in excess of the 
amount paid to the pharmacies on behalf of the 
entity, including any post-sale or post-invoice 
fees, discounts, or related adjustments such as 
direct and indirect remuneration fees or assess-
ments (after allowing for a reasonable adminis-
trative fee as described in subparagraph (B)), is 
not allowable for purposes of claiming Federal 
matching payments under this title.’’. 
(2) CONFORMING
AMENDMENT.—Clause (xiii) 
of section 1903(m)(2)(A) of such Act (42 U.S.C. 
1396b(m)(2)(A)) is amended— 
(A) by striking ‘‘and (III)’’ and inserting 
‘‘(III)’’; and 
VerDate Sep 11 2014 
03:14 Feb 05, 2020
Jkt 099200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H5749.IH
H5749
kjohnson on DSK79L0C42PROD with BILLS