To exclude discounts provided to mail order and nursing facility pharmacies from the determination of average manufacturer price and to extend the discounts offered under fee-for-service Medicaid for prescription drugs to managed care organizations.

SA 2383. Mr. BAUCUS submitted an amendment intended to be proposed by him to the bill S. 1932, to provide for reconciliation pursuant to section 202(a) of the concurrent resolution on the budget for fiscal year 2006 (H. Con. Res. 95); which was ordered to lie on the table; as follows:

On page 110, after line 24, add the following:

(4) Exclusion of discounts provided to mail order and nursing facility pharmacies from the determination of average manufacturer price.--

(A) In general.--Section 1927(k)(1)(B)(ii)(IV) (42 U.S.C. 1396r-8(k)(1)(B)(ii)(IV)), as added by paragraph (1)(C), is amended to read as follows:

“(IV) Chargebacks, rebates provided to a pharmacy (excluding a mail order pharmacy, a pharmacy at a nursing facility or home, and a pharmacy benefit manager), or any other direct or indirect discounts.”.

(B) Effective date.--Paragraph (3) shall apply to the amendment made by subparagraph (A).

(5) Extension of prescription drug discounts to enrollees of medicaid managed care organizations.--

(A) In general.--Section 1903(m)(2)(A) (42 U.S.C. 1396b(m)(2)(A)) is amended--

(i) in clause (xi), by striking “and” at the end;

(ii) in clause (xii), by striking the period at the end and inserting “; and”; and

(iii) by adding at the end the following:

“(xiii) such contract provides that payment for covered outpatient drugs dispensed to individuals eligible for medical assistance who are enrolled with the entity shall be subject to the same rebate agreement entered into under section 1927 as the State is subject to and that the State shall have the option of collecting rebates for the dispensing of such drugs by the entity directly from manufacturers or allowing the entity to collect such rebates from manufacturers in exchange for a reduction in the prepaid payments made to the entity for the enrollment of such individuals.”.

(B) Conforming amendment.--Section 1927(j)(1) (42 U.S.C. 1396r-8(j)91)) is amended by inserting “other than for purposes of collection of rebates for the dispensing of such drugs in accordance with the provisions of a contract under section 1903(m) that meets the requirements of paragraph (2)(A)(xiii) of that section” before the period.

(C) Effective date.--The amendments made by this paragraph take effect on the date of enactment of this Act and apply to rebate agreements entered into or renewed under section 1927 of the Social Security Act (42 U.S.C. 1396r-8) on or after such date.