161 
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 
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 
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(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. 
SEC. 240. 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.) 
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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 
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). 
SEC. 241. ESTABLISHING A MONTHLY CAP ON BENEFICIARY 
INCURRED COSTS FOR INSULIN PRODUCTS 
AND 
SUPPLIES 
UNDER 
A 
PRESCRIPTION 
DRUG PLAN OR MA–PD PLAN. 
(a) IN GENERAL.—Section 1860D–2 of the Social 
Security Act (42 U.S.C. 1395w–102), as amended by sec-
tions 121 and 133, is further amended— 
(1) in subsection (b)(2)— 
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(A) in subparagraph (A), by striking ‘‘and 
(E)’’ and inserting ‘‘(E), and (F)’’; 
(B) in subparagraph (B), by striking ‘‘and 
(D)’’ and inserting ‘‘(D), and (F)’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(F) CAP ON INCURRED COSTS FOR INSU-
LIN PRODUCTS AND SUPPLIES.— 
‘‘(i) IN GENERAL.—The coverage pro-
vides benefits, for costs above the annual 
deductible specified in paragraph (1) and 
up to the annual out-of-pocket threshold 
described in paragraph (4)(B) and with re-
spect to a month (beginning with January 
of 2022), with cost sharing that is equal to 
$0 for a specified covered part D drug (as 
defined in clause (iii)) furnished to an indi-
vidual who has incurred costs during such 
month with respect to specified covered 
part D drugs equal to— 
‘‘(I) for months occurring in 
2022, $50; or 
‘‘(II) for months occurring in a 
subsequent year, the amount applica-
ble under this clause for months oc-
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curring in the year preceding such 
subsequent year, increased by the an-
nual percentage increase specified in 
paragraph (6) for such subsequent 
year and rounded to the nearest dol-
lar. 
‘‘(ii) APPLICATION.—The provisions 
of clauses (i) through (iii) of paragraph 
(4)(C) shall apply with respect to the de-
termination of the incurred costs for speci-
fied covered part D drugs for purposes of 
clause (i) in the same manner as such pro-
visions apply with respect to the deter-
mination of incurred costs for covered part 
D drugs for purposes of paragraph (4)(A). 
‘‘(iii) SPECIFIED
COVERED
PART
D 
DRUG.—For purposes of this subpara-
graph, the term ‘specified covered part D 
drug’ means a covered part D drug that 
is— 
‘‘(I) insulin; or 
‘‘(II) a medical supply associated 
with the injection of insulin (as de-
fined in regulations of the Secretary 
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promulgated pursuant to subsection 
(e)(1)(B)).’’; and 
(2) in subsection (c), by adding at the end the 
following new paragraph: 
‘‘(5) SAME PROTECTION WITH RESPECT TO EX-
PENDITURES FOR INSULIN AND CERTAIN MEDICAL 
SUPPLIES.—The coverage provides the coverage re-
quired under subsection (b)(2)(F).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) IN GENERAL.—Section 1860D–14(a)(1)(D) 
of the Social Security Act (42 U.S.C. 1395w– 
114(a)(1)(D)), as amended by section 121, is fur-
ther amended— 
(A) in clause (ii), by striking ‘‘section 
1860D–2(b)(2)’’ and inserting ‘‘section 1860D– 
2(b)(2)(A)’’; and 
(B) in clause (iii), by striking ‘‘section 
1860D–2(b)(2)’’ and inserting ‘‘section 1860D– 
2(b)(2)(A)’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall apply with respect to plan 
year 2022 and each subsequent plan year. 
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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-
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-
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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 
‘‘(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 
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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 of 2021, the 
Secretary shall issue guidance that States must 
follow for establishing conflict of interest poli-
cies for the pharmacy and therapeutics com-
mittee in accordance with the requirements of 
clause (ii), including appropriate standards and 
requirements 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)’’; 
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(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. 
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 
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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— 
‘‘(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— 
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‘‘(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 
‘‘(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 
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‘‘(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 
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— 
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(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 
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-
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176 
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 
(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 
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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; 
(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. 
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(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. 
(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. 
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(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. 
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: 
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‘‘(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 
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 
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181 
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 
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.— 
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182 
‘‘(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 
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-
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183 
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); 
‘‘(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 
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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. 
‘‘(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-
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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 
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 
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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 a website 
of the Centers for Medicare & Medicaid Services that is 
accessible to the public a report of the most recently avail-
able data on provider prescribing patterns under the Med-
icaid program. 
(b) CONTENT OF REPORT.— 
(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 
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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-
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 
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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. 
(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; 
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(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 
(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 
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(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-
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. 
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(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-
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 
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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 
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-
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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 
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. 
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‘‘(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 
(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.— 
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‘‘(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 
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-
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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. 
‘‘(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 
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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 
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 
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‘‘(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-
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-
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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-
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 
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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 
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 
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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 
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 
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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- 
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 
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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.— 
‘‘(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 
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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 
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.— 
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‘‘(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 
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 
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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. 
‘‘(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— 
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‘‘(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-
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; 
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‘‘(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.— 
‘‘(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 
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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 
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. 
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