A bill to amend title XIX of the Social Security Act to encourage States to increase generic drug utilization under Medicaid, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Affordable Medicines Utilization Act 
of 2011''.

SEC. 2. SAVINGS REBATE FOR STATES THAT INCREASE GENERIC DRUG 
              UTILIZATION UNDER MEDICAID.

    (a) In General.--Section 1903 of the Social Security Act (42 U.S.C. 
1396b) is amended by inserting after subsection (g), the following:
    ``(h)(1) With respect to each of fiscal years 2012, 2013, and 2014, 
if the generic substitution rate determined for the State under section 
1927(l)(2) for the most recent preceding fiscal year for which data is 
available is greater than the State's generic substitution rate (as so 
determined) for the most recent second preceding fiscal year for which 
data is available, the amount determined under subsection (a) for the 
State for each quarter of the fiscal year shall be increased by the 
amount equal to 50 percent of the generic drug utilization savings 
amount determined for the State and the quarter under paragraph (2).
    ``(2) The generic drug utilization savings amount determined under 
this paragraph with respect to a State and a quarter is the product 
of--
            ``(A) the difference between the--
                    ``(i) total amount expended by the State for the 
                corresponding quarter of the preceding fiscal year for 
                providing medical assistance for multiple source drugs 
                (as defined in section 1927(k)(7)(A)(i)), as determined 
                after the application of section 1927(b)(1)(B); and
                    ``(ii) total amount expended by the State for the 
                quarter involved for providing medical assistance for 
                such drugs (as so determined); and
            ``(B) the State percentage determined for the State under 
        section 1905(b).''.
    (b) Annual Determination of State Generic Substitution Rates and 
Performance Rankings.--Section 1927 of the Social Security Act (42 
U.S.C. 1396r-8) is amended by adding at the end the following:
    ``(l) Annual Determination of State Generic Substitution Rates and 
Performance Rankings.--
            ``(1) In general.--Not later than January 1, 2012, and 
        annually thereafter, the Secretary shall determine the generic 
        substitution rate (as defined in paragraph (2)) for each State 
        for the most recent preceding fiscal year and the most recent 
        second preceding fiscal year for which data are available. The 
        Secretary annually shall publish on the Internet Web site of 
        the Centers for Medicare & Medicaid Services the generic 
        substitution rates determined for each State for such preceding 
        fiscal years and the percentage increase or decrease in such 
        rates when compared with each other with respect to a State. On 
        the basis of such comparison, the Secretary shall list the 
        States in order of the States with the greatest increase in the 
        generic substitution rate.
            ``(2) Generic substitution rate.--In paragraph (1), the 
        term `generic substitution rate' means, with respect to a 
        State, the share of all drug units for which payment is made to 
        the State under this title for the 20 most widely prescribed 
        multiple source drugs under the State program under this title 
        that have a specific National Drug Code and meet the 
        requirements of subsection (k)(7)(A)(i).''.
    (c) Evaluation and Report.--
            (1) In general.--Not later than December 31, 2014, the 
        Secretary of Health and Human Services shall evaluate and 
        report to Congress on the effectiveness of the generic drug 
        utilization savings payments authorized under section 1903(h) 
        of the Social Security Act (42 U.S.C. 1396b(h)) (as added by 
        subsection (a)) in encouraging States to increase their 
        Medicaid generic substitution rate. The evaluation shall 
        include (but is not limited to) the following:
                    (A) An analysis of the amounts each State Medicaid 
                program saves through increased generic drug 
                substitution.
                    (B) An analysis of any indirect savings to State 
                Medicaid programs through increased medication 
                adherence due to increased accessibility and 
                affordability of prescriptions.
                    (C) An analysis of future estimated savings to 
                State Medicaid programs and the Federal Government 
                after termination of the generic drug utilization 
                savings payments authorized under such section.
            (2) Medicaid generic substitution rate.--In paragraph (1), 
        the term ``Medicaid generic substitution rate'' has the meaning 
        given the term ``generic substitution rate'' with respect to a 
        State under 1927(l)(2) of the Social Security Act (42 U.S.C. 
        1396r-8(l)(2)) (as added by subsection (b)).

Summary: Affordable Medicines Utilization Act of 2011 - Amends title XIX (Medicaid) of the Social Security Act, with respect to FY2012-FY2014, to require an increase in the quarterly Medicaid payment to a state by 50% of the generic drug utilization savings amount if the state's generic substitution rate for the most recent preceding fiscal year for which data is available is greater than its rate for the most recent second preceding fiscal year for which data is available.

Directs the Secretary of Health and Human Services (HHS) to determine the state's generic substitution rate for such fiscal years.

Defines "generic substitution rate" as the share of all drug units for which Medicaid payment is made to a state for the 20 most widely prescribed multiple source drugs under the state program that have a specific National Drug Code.