S-927 : Still Just a Bill

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The Protecting Pharmacies in Medicaid Act, also known as S. 927, aims to reform pharmacy payment practices within Medicaid programs. The key provisions include:

• Ensuring Accurate Pharmacy Payments: Mandates the Secretary of Health and Human Services to conduct more frequent and detailed surveys of drug acquisition costs for both retail and non-retail pharmacies. This includes differentiating between pharmacy types and affiliates, and making survey information publicly available. Pharmacies are required to respond to these surveys, with penalties for non-compliance. States are prohibited from using non-retail pharmacy pricing information to inform payment methodologies for retail community pharmacies.
• Preventing Abusive Spread Pricing: Requires transparent pass-through pricing models in contracts between states and pharmacy benefit managers (PBMs), managed care entities, and other specified entities. This means that payments for prescription drugs should be limited to ingredient costs and professional dispensing fees, with any administrative fees reflecting fair market value. The legislation prohibits spread pricing, where the amount charged exceeds the amount paid to pharmacies.
• Oversight and Reporting: Directs the Inspector General of the Department of Health and Human Services to conduct periodic studies of survey data, focusing on variations in acquisition costs and the influence of internal transfer prices.

The bill also includes definitions for "applicable non-retail pharmacy" and "pharmacy benefit manager" to clarify the scope of the regulations. The changes will be implemented through program instruction, with specific effective dates for retail and non-retail pharmacies and managed care contracts.

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