Sponsors (16)
The bill promotes and clarifies value‑based drug purchasing that can lower Medicaid drug costs and improve patient outcomes, but it also creates pricing‑calculation changes, administrative burdens, and risks of higher Medicare/federal spending or unintended access and market effects that policymakers will need to manage.
State Medicaid programs (and thereby taxpayers and Medicaid enrollees) can use value‑based purchasing agreements for inpatient and outpatient drugs to lower net drug costs through manufacturer performance‑tied payments.
Medicaid beneficiaries and other patients (including those with rare/transformative-therapy needs) may see improved access and better clinical outcomes because manufacturers are incented to tie payments to drug performance.
Manufacturers, states, and providers gain regulatory clarity and predictable timelines because the bill requires rulemaking (e.g., 180‑day deadlines for HHS/OIG), which should accelerate adoption of value‑based agreements and reduce uncertainty.
Medicare program spending and federal taxpayer costs could rise because excluding certain discounts from ASP may increase Medicare reimbursements to manufacturers.
Manufacturers might respond by raising list prices or manipulating best‑price reporting (or shifting costs across markets), which could increase commercial prices, reduce Medicaid rebates, and raise costs for patients and taxpayers.
States, hospitals, providers and manufacturers will face short‑term administrative and compliance costs and complexity as agencies implement new rules and change how AMP, best price, and installment payments are calculated.
Based on analysis of 6 sections of legislative text.
Enables Medicaid value‑based purchasing for drugs, permits multi‑point best‑price reporting, aligns Medicare ASP treatment, creates an anti‑kickback safe harbor for VBPs, and mandates a GAO study.
Introduced March 9, 2026 by Brett Guthrie · Last progress March 9, 2026
Allows Medicaid programs and drug manufacturers to use value‑based purchasing arrangements (VBPs) for outpatient drugs by changing how drug prices and rebates are reported and calculated, aligning certain Medicare payment rules, establishing an anti‑kickback safe harbor for manufacturer payments tied to VBPs, and requiring federal guidance and a GAO study. The bill lets manufacturers report multiple "best price" points for the same drug when offered as a VBP to all States, treats installment payments for rebate calculations in a specific way, and directs agencies to issue implementing rules or guidance within 180 days and a GAO report by June 30, 2029.