II 114th CONGRESS 1st Session S. 1364 IN THE SENATE OF THE UNITED STATES May 18, 2015 Mr. Sanders (for himself, Mr. Brown , Ms. Hirono , Mr. Blumenthal , and Mr. Franken ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XIX of the Social Security Act to require the payment of an additional rebate to the State Medicaid plan in the case of increase in the price of a generic drug at a rate that is greater than the rate of inflation.

1. Short title This Act may be cited as the Medicaid Generic Drug Price Fairness Act of 2015 . 2. Applying the medicaid additional rebate requirement to generic drugs (a) In general Section 1927(c)(3) of the Social Security Act ( 42 U.S.C. 1396r–8(c)(3) ) is amended— (1) in subparagraph (A), by striking The amount and inserting Except as provided in subparagraph (C), the amount ; and (2) by adding at the end the following new subparagraph: (C) Additional rebate (i) In general The amount of the rebate specified in this paragraph for a rebate period, with respect to each dosage form and strength of a covered outpatient drug other than a single source drug or an innovator multiple source drug, shall be increased in the manner that the rebate for a dosage form and strength of a single source drug or an innovator multiple source drug is increased under subparagraphs (A) and (D) of paragraph (2), except as provided in clause (ii). (ii) Special rules for application of provision In applying subparagraphs (A) and (D) of paragraph (2) under clause (i)— (I) the reference in subparagraph (A)(i) of such paragraph to 1990 shall be deemed a reference to 2014 ; (II) subject to clause (iii), the reference in subparagraph (A)(ii) of such paragraph to calendar quarter beginning July 1, 1990 shall be deemed a reference to the calendar quarter in which the average manufacturer price for the drug is the lowest during the 12-calendar quarter period ending on September 30, 2014 ; and (III) subject to clause (iii), the reference in subparagraph (A)(ii) of such paragraph to September 1990 shall be deemed a reference to the last month of such calendar quarter ; (IV) the references in subparagraph (D) of such paragraph to paragraph (1)(A)(ii) , this paragraph , and December 31, 2009 shall be deemed references to subparagraph (A) , this subparagraph , and December 31, 2014 , respectively; and (V) any reference in such paragraph to a single source drug or an innovator multiple source drug shall be deemed to be a reference to a drug to which clause (i) applies. (iii) Special rule for certain noninnovator multiple source drugs In applying paragraph (2)(A)(ii)(II) under clause (i) with respect to a covered outpatient drug that is first sold as a drug other than a single source drug or an innovator multiple source drug after the date that is 3 years before the date of the enactment of this subparagraph, such paragraph shall be applied— (I) by substituting the applicable quarter for the calendar quarter beginning July 1, 1990 ; and (II) by substituting the last month in such applicable quarter for September 1990 . (iv) Applicable quarter defined In this subsection, the term applicable quarter means, with respect to a drug described in clause (iii), the fifth full calendar quarter in which the drug is sold as a drug other than a single source drug or an innovator multiple source drug. . (b) Effective date The amendments made by subsection (a) shall apply to rebate periods beginning after December 31, 2014.