I 
118TH CONGRESS 
1ST SESSION H. R. 1613 
To amend title XIX of the Social Security Act to improve transparency 
and prevent the use of abusive spread pricing and related practices 
in the Medicaid program. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 17, 2023 
Mr. CARTER of Georgia (for himself, Mr. VICENTE GONZALEZ of Texas, Ms. 
STEFANIK, Ms. ROSS, Mr. ALLEN, and Mr. AUCHINCLOSS) introduced 
the following bill; which was referred to the Committee on Energy and 
Commerce 
A BILL 
To amend title XIX of the Social Security Act to improve 
transparency and prevent the use of abusive spread pric-
ing and related practices in the Medicaid program. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Drug Price Trans-
parency in Medicaid Act of 2023’’. 
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SEC. 2. IMPROVING TRANSPARENCY AND PREVENTING THE 
USE OF ABUSIVE SPREAD PRICING AND RE-
LATED PRACTICES IN MEDICAID. 
(a) PASS-THROUGH PRICING REQUIRED.— 
(1) IN GENERAL.—Section 1927(e) of the So-
cial Security Act (42 U.S.C. 1396r–8(e)) is amended 
by adding at the end the following: 
‘‘(6) PASS-THROUGH
PRICING
REQUIRED.—A 
contract between the State and a pharmacy benefit 
manager (referred to in this paragraph as a ‘PBM’), 
or a contract between the State and a managed care 
entity or other specified entity (as such terms are 
defined in section 1903(m)(9)(D)) that includes pro-
visions making the entity responsible for coverage of 
covered outpatient drugs dispensed to individuals en-
rolled with the entity, shall require that payment for 
such drugs and related administrative services (as 
applicable), including payments made by a PBM on 
behalf of the State or entity, is based on a pass- 
through pricing model under which— 
‘‘(A) any payment made by the entity or 
the PBM (as applicable) for such a drug— 
‘‘(i) is limited to— 
‘‘(I) ingredient cost; and 
‘‘(II) a professional dispensing 
fee that is not less than the profes-
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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 or 
provider that dispenses the drug; and 
‘‘(iii) is made in a manner that is con-
sistent with section 1902(a)(30)(A) and 
sections 447.512, 447.514, and 447.518 of 
title 42, Code of Federal Regulations (or 
any successor regulation) as if such re-
quirements applied directly to the entity or 
the PBM, except that any payment by the 
entity or the PBM (as applicable) for the 
ingredient cost of a covered outpatient 
drug dispensed by providers and phar-
macies referenced in clause (i) or (ii) of 
section 447.518(a)(1) of title 42, Code of 
Federal Regulations (or any successor reg-
ulation) shall be the same as the payment 
amount for the ingredient cost when dis-
pensed by providers and pharmacies not 
referenced in such clauses, and in no case 
shall payment for the ingredient cost of a 
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covered outpatient drug be based on the 
actual acquisition cost of a drug dispensed 
by providers and pharmacies referenced in 
such clauses or take into account a drug’s 
status as a drug purchased at a discounted 
price by a provider or pharmacy referenced 
in such clauses; 
‘‘(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-
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 other remuneration; and 
‘‘(D) any form of spread pricing whereby 
any amount charged or claimed by the entity or 
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the PBM (as applicable) 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.—Section 
1903(m)(2)(A)(xiii) 
of 
such 
Act 
(42 
U.S.C. 
1396b(m)(2)(A)(xiii)) is amended— 
(A) by striking ‘‘and (III)’’ and inserting 
‘‘(III)’’; 
(B) by inserting before the period at the 
end the following: ‘‘, and (IV) pharmacy benefit 
management services provided by the entity, or 
provided by a pharmacy benefit manager on be-
half of the entity under a contract or other ar-
rangement between the entity and the phar-
macy benefit manager, shall comply with the re-
quirements of section 1927(e)(6)’’; and 
(C) by moving the left margin 2 ems to the 
left. 
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(3) EFFECTIVE DATE.—The amendments made 
by this subsection apply to contracts between States 
and managed care entities, other specified entities, 
or pharmacy benefits managers that are entered into 
or renewed on or after the date that is 18 months 
after the date of enactment of this Act. 
(b) ENSURING ACCURATE PAYMENTS
TO PHAR-
MACIES UNDER MEDICAID.— 
(1) IN GENERAL.—Section 1927(f) of the Social 
Security Act (42 U.S.C. 1396r–8(f)) is amended— 
(A) by striking ‘‘and’’ after the semicolon 
at the end of paragraph (1)(A)(i) and all that 
precedes it through ‘‘(1)’’ and inserting the fol-
lowing: 
‘‘(1) DETERMINING PHARMACY ACTUAL ACQUI-
SITION COSTS.—The Secretary shall conduct a sur-
vey of retail community pharmacy drug prices to de-
termine the national average drug acquisition cost as 
follows: 
‘‘(A) USE
OF
VENDOR.—The Secretary 
may contract services for— 
‘‘(i) with respect to retail community 
pharmacies, the determination of retail 
survey prices of the national average drug 
acquisition cost for covered outpatient 
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drugs based on a monthly survey of such 
pharmacies; and’’; 
(B) by adding at the end of paragraph (1) 
the following: 
‘‘(F) SURVEY
REPORTING.—In order to 
meet the requirement of section 1902(a)(54), a 
State shall require that any retail community 
pharmacy in the State that receives any pay-
ment, reimbursement, administrative fee, dis-
count, or rebate related to the dispensing of 
covered outpatient drugs to individuals receiv-
ing benefits under this title, regardless of 
whether such payment, fee, discount, or rebate 
is received from the State or a managed care 
entity directly or from a pharmacy benefit man-
ager or another entity that has a contract with 
the State or a managed care entity, shall re-
spond to surveys of retail prices conducted 
under this subsection. 
‘‘(G) SURVEY INFORMATION.—Information 
on national drug acquisition prices obtained 
under this paragraph shall be made publicly 
available and shall include at least the fol-
lowing: 
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‘‘(i) The monthly response rate of the 
survey including a list of pharmacies not in 
compliance with subparagraph (F). 
‘‘(ii) The sampling frame and number 
of pharmacies sampled monthly. 
‘‘(iii) Information on price concessions 
to the pharmacy, including discounts, re-
bates, and other price concessions, to the 
extent that such information is available 
during the survey period. 
‘‘(H) 
REPORT
ON
SPECIALTY
PHAR-
MACIES.— 
‘‘(i) IN GENERAL.—Not later than 1 
year after the effective date of this sub-
paragraph, the Secretary shall submit a re-
port to Congress examining specialty drug 
coverage and reimbursement under this 
title. 
‘‘(ii) CONTENT OF REPORT.—Such re-
port shall include a description of how 
State Medicaid programs define specialty 
drugs and specialty pharmacies, how much 
State Medicaid programs pay for specialty 
drugs, how States and managed care plans 
determine payment for specialty drugs, the 
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settings in which specialty drugs are dis-
pensed (such as retail community phar-
macies or specialty pharmacies), to what 
extent acquisition costs for specialty drugs 
are captured in the national average drug 
acquisition cost survey or through another 
process, examples of specialty drug dis-
pensing fees to support the services associ-
ated with dispensing specialty drugs, and 
recommendations as to whether specialty 
pharmacies should be included in the sur-
vey of retail prices to ensure national aver-
age drug acquisition costs capture drugs 
sold at specialty pharmacies and how such 
specialty pharmacies should be defined.’’; 
(C) in paragraph (2)— 
(i) in subparagraph (A), by inserting 
‘‘, including payments rates under Med-
icaid managed care plans,’’ after ‘‘under 
this title’’; and 
(ii) in subparagraph (B), by inserting 
‘‘and the basis for such dispensing fees’’ 
before the semicolon; and 
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(D) in paragraph (4), by inserting ‘‘, and 
$5,000,000 for fiscal year 2025 and each fiscal 
year thereafter,’’ after ‘‘2010’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection take effect on the first day of the 
first quarter that begins on or after the date that is 
18 months after the date of enactment of this Act. 
Æ 
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