‘‘(iii) If the Secretary determines that such drug is 
qualitatively and quantitatively the same as the listed 
drug, the Secretary shall not change or rescind such deter-
mination after the submission of an abbreviated applica-
tion for such drug under this subsection unless— 
‘‘(I) the formulation of the listed drug has been 
changed and the Secretary has determined that the 
prior listed drug formulation was withdrawn for rea-
sons of safety or effectiveness; or 
‘‘(II) the Secretary makes a written determina-
tion that the prior determination must be changed 
because an error has been identified. 
‘‘(iv) If the Secretary makes a written determination 
described in clause (iii)(II), the Secretary shall provide no-
tice and a copy of the written determination to the person 
making the request under clause (i). 
‘‘(v) The disclosures required by this subparagraph 
are disclosures authorized by law, including for purposes 
of section 1905 of title 18, United States Code.’’. 
(b) GUIDANCE.— 
(1) IN
GENERAL.—Not later than one year 
after the date of enactment of this Act, the Sec-
retary of Health and Human Services shall issue 
draft guidance, or update guidance, describing how 
the Secretary will determine whether a drug is quali-
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tatively and quantitatively the same as the listed 
drug 
(as 
such 
terms 
are 
used 
in 
section 
505(j)(3)(H) of the Federal Food, Drug, and Cos-
metic Act, as added by subsection (a)), including 
with respect to assessing pH adjusters. 
(2) PROCESS.—In issuing guidance under this 
subsection, the Secretary of Health and Human 
Services shall— 
(A) publish draft guidance; 
(B) provide a period of at least 60 days for 
comment on the draft guidance; and 
(C) after considering any comments re-
ceived and not later than one year after the 
close of the comment period on the draft guid-
ance, publish final guidance. 
(c) APPLICABILITY.—Section 505(j)(3)(H) of the 
Federal Food, Drug, and Cosmetic Act, as added by sub-
section (a), applies beginning on the date of enactment 
of this Act, irrespective of the date on which the guidance 
required by subsection (b) is finalized. 
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SEC. 302. PARITY IN MEDICARE PAYMENTS FOR HOSPITAL 
OUTPATIENT DEPARTMENT SERVICES FUR-
NISHED OFF-CAMPUS. 
(a) IN GENERAL.—Section 1833(t)(16) of the Social 
Security Act (42 U.S.C. 1395l(t)(16)) is amended by add-
ing at the end the following new subparagraph: 
‘‘(H) PARITY IN FEE SCHEDULE AMOUNT 
FOR
CERTAIN
SERVICES
FURNISHED
BY
AN 
OFF-CAMPUS OUTPATIENT DEPARTMENT OF A 
PROVIDER.— 
‘‘(i) IN GENERAL.—Subject to clause 
(iii), in the case of specified OPD services 
(as defined in clause (iv)) that are fur-
nished during 2025 or a subsequent year 
by an off-campus outpatient department of 
a provider (as defined in clause (iv)), there 
shall be substituted for the amount other-
wise determined under this subsection for 
such service and year an amount equal to 
the payment amount that would have been 
payable under the applicable payment sys-
tem under this part (other than under this 
subsection) had such services been fur-
nished by such a department subject to 
such payment system pursuant to para-
graph (21)(C). 
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‘‘(ii) NOT BUDGET NEUTRAL IMPLE-
MENTATION.—In making any budget neu-
trality adjustments under this subsection 
for 2025 or a subsequent year, the Sec-
retary shall not take into account the re-
duced expenditures that result from the 
application of this subparagraph. 
‘‘(iii) 
TRANSITION.—The 
Secretary 
shall provide for a 4-year phase-in of the 
application of clause (i), with clause (i) 
being fully applicable for specified OPD 
services beginning with 2028. 
‘‘(iv) DEFINITIONS.—For purposes of 
this subparagraph: 
‘‘(I) DESIGNATED
AMBULATORY 
PAYMENT
CLASSIFICATION
GROUP.— 
The term ‘designated ambulatory pay-
ment classification group’ means an 
ambulatory 
payment 
classification 
group for drug administration serv-
ices. 
‘‘(II) SPECIFIED
OPD
SERVICES 
DEFINED.—The term ‘specified OPD 
services’ means covered OPD services 
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included in a designated ambulatory 
payment classification group. 
‘‘(III) OFF-CAMPUS OUTPATIENT 
DEPARTMENT
OF
A
PROVIDER
DE-
FINED.—The term ‘off-campus out-
patient department of a provider’ 
means a department of a provider (as 
defined in section 413.65(a)(2) of title 
42, Code of Federal Regulations) that 
is not located— 
‘‘(aa) on the campus (as 
such term is defined in such sec-
tion 413.65(a)(2)) of such pro-
vider; or 
‘‘(bb) within the distance 
(described in such definition of 
campus) from a remote location 
of a hospital facility (as defined 
in such section 413.65(a)(2)).’’. 
(b) IMPLEMENTATION.—Section 1833(t)(12) of the 
Social Security Act (42 U.S.C. 1395l(t)(12)) is amend-
ed— 
(1) in subparagraph (D), by striking ‘‘and’’ at 
the end; 
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100 
(2) in subparagraph (E), by striking the period 
at the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(F) the determination of any payment 
amount under paragraph (16)(H), including the 
transition under clause (iii) of such para-
graph.’’. 
SEC. 303. IMPROVING TRANSPARENCY AND PREVENTING 
THE USE OF ABUSIVE SPREAD PRICING AND 
RELATED PRACTICES IN MEDICAID. 
(a) PHARMACY PRICE REIMBURSEMENT REQUIRE-
MENTS.— 
(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) PHARMACY
PRICE
REIMBURSEMENT
RE-
QUIRED.—A contract between the State and a man-
aged care entity (or subcontractor of a managed 
care entity that manages the pharmacy benefit for 
such entity (in this section referred to as a ‘PBM’), 
or other specified entity (as such terms are defined 
in section 1903(m)(9)(D)) that includes provisions 
making the managed care entity responsible for cov-
erage of covered outpatient drugs dispensed to indi-
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101 
viduals enrolled with the entity, shall require that 
payment for such drugs and related administrative 
services (as applicable), including payments made by 
a PBM on behalf of the State or entity, is based on 
a pass-through pricing model under which— 
‘‘(A) any payment made by the entity or 
the PBM (as applicable) for such a drug— 
‘‘(i) is limited to— 
‘‘(I) ingredient cost; and 
‘‘(II) a professional dispensing 
fee that is not less than the profes-
sional dispensing fee that the State 
plan or waiver would pay if the plan 
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 sections 447.502, 447.512, 
447.514, and 447.518 of title 42, Code of 
Federal Regulations (or any successor reg-
ulation) as if such requirements applied di-
rectly to the entity or the PBM; 
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102 
‘‘(B) payment to the entity or the PBM 
(as applicable) for administrative services per-
formed by the entity or PBM is limited to an 
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 
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 
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103 
not allowable for purposes of claiming Federal 
matching payments under this title.’’. 
(2) 
CONFORMING
AMENDMENTS.—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) the pharmacy 
benefit provided by the entity (or pharmacy 
benefit manager on behalf of the entity under 
a contract), the other specified entity (as de-
fined in paragraph (9)(D)), or by another 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. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection apply to contracts between States 
and managed care entities, or other specified enti-
ties, that have an initial effective date or are re-
newed on or after the date that is 18 months after 
the date of enactment of this Act. 
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104 
(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 
drugs based on a monthly survey of such 
pharmacies; and’’; 
(B) by adding at the end of paragraph (1) 
the following: 
‘‘(F) SURVEY REPORTING.—A State shall 
require that any retail community pharmacy in 
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105 
the State that receives any payment, reimburse-
ment, administrative fee, discount, or rebate re-
lated to the dispensing of covered outpatient 
drugs to individuals receiving benefits under 
this title, regardless of whether such payment, 
reimbursement, administrative fee, discount, or 
rebate is received from the State or a managed 
care entity directly or from a pharmacy benefit 
manager or other specified entity (as defined in 
section 1903(m)(9)(D)) that has a contract 
with the State or a managed care entity, shall 
respond 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 in a timely manner following the col-
lection of such information and shall include at 
least the following: 
‘‘(i) The monthly response rate to the 
survey including a list of pharmacies not in 
compliance with subparagraph (F). 
‘‘(ii) The sampling frame and number 
of pharmacies sampled monthly. 
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106 
‘‘(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.—Not later than 1 year after the date 
that this subparagraph takes effect, the Sec-
retary shall submit to Congress a report exam-
ining specialty drug coverage and reimburse-
ment under this title, including— 
‘‘(i) a description of how State Med-
icaid programs define specialty drugs and 
specialty pharmacies; 
‘‘(ii) the amount State Medicaid pro-
grams pay for specialty drugs; 
‘‘(iii) how States and managed care 
entities determine payment for specialty 
drugs; 
‘‘(iv) the settings in which specialty 
drugs are dispensed to individuals receiv-
ing benefits under this title (such as retail 
community pharmacies or specialty phar-
macies); 
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107 
‘‘(v) the extent to which speciality 
drugs (as defined by the respective States) 
are captured in the national average drug 
acquisition cost survey (or through another 
process); 
‘‘(vi) examples of specialty drug dis-
pensing fees to support the services associ-
ated with dispensing such specialty drugs; 
and 
‘‘(vii) recommendations as to whether 
specialty pharmacies should be included in 
the survey of retail prices to ensure na-
tional average drug acquisition costs cap-
ture drugs sold at specialty pharmacies, 
and how such specialty pharmacies should 
be defined. 
‘‘(I) ENFORCEMENT.—At the discretion of 
the Secretary, the Secretary may enforce non- 
compliance with this paragraph by a pharmacy 
through the establishment of penalties or the 
suspension of payments under this title, in full 
or in part, until compliance with this paragraph 
has been completed.’’; and 
(C) in paragraph (2)— 
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108 
(i) in subparagraph (A), by inserting 
‘‘(including payment rates under Medicaid 
managed care plans)’’ after ‘‘under this 
title’’; and 
(ii) in subparagraph (B), by inserting 
‘‘, and the basis for such dispensing fees’’ 
before the semicolon at the end. 
(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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