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Adds new paragraph (6) to subsection (e) establishing requirements for contracts between States and pharmacy benefit managers (PBMs) and certain entities to use a transparent prescription drug pass-through pricing model, limits allowable spread pricing for Federal matching, requires PBM/entity reporting of drug-level costs and payments to States and to HHS on request, and directs annual publication of aggregated data; and adds a new paragraph (14) to subsection (k) defining the term 'pharmacy benefit manager.'
Modifies paragraph (2)(A)(xiii) by punctuation/formatting edits and adds a new paragraph (10) conditioning Federal payment under the title for expenditures related to services provided by an 'other specified entity' on those services being provided under a contract that satisfies the requirements of paragraph (2)(A)(xiii).
Amends subsection (f) to require the Secretary to conduct monthly surveys of retail community and applicable non-retail pharmacies to determine national average drug acquisition cost benchmarks; authorize contracting with a vendor; require monthly vendor updates; require pharmacy response to surveys; make survey-derived national price information publicly available; authorize civil money penalties (up to $100,000 per violation) for noncompliance, false information, or refusal to respond; prohibit States from using applicable non-retail pharmacy pricing to set retail pharmacy payment methodologies; add oversight responsibilities and an appropriation for the HHS Inspector General.
Adds new definitions: paragraph (12) defines 'applicable non-retail pharmacy' and paragraph (13) defines 'affiliate'. Also modifies the prefatory language from 'In the section' to 'In this section'.
Creates a federal system to measure and publish national average drug acquisition costs by running monthly surveys of retail and certain non‑retail pharmacies, requires pharmacies to respond, and funds an HHS Inspector General study. Changes Medicaid payment rules to ban ‘‘spread pricing’’ by requiring PBMs and similar entities to use transparent pass‑through pricing, disclose drug‑level costs, limit administrative fees to fair market value, and make spread pricing ineligible for Federal Medicaid matching funds.
The bill includes civil penalties for noncompliance (up to $100,000 per violation), an appropriation of $5,000,000 for the IG study in FY2026, and implementation flexibilities for HHS (including exemptions from some notice-and-comment and paperwork rules). PBMs, pharmacies, States (Medicaid programs), and Medicaid beneficiaries are the main parties affected.
Read twice and referred to the Committee on Finance.
Introduced March 11, 2025 by Peter Welch · Last progress March 11, 2025
Read twice and referred to the Committee on Finance.
Introduced in Senate
