article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Drug Rebate Equalization Act of 2009''. SEC. 2. 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-- (1) in clause (xi), by striking ``and'' at the end; (2) in clause (xii), by striking the period at the end and inserting ``; and''; and (3) by adding at the end the following: ``(xiii) such contract provides that (I) 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 required by the agreement entered into under section 1927 as the State is subject to, and (II) capitation rates paid to the entity shall be based on actual cost experience related to rebates and subject to the Federal regulations requiring actuarially sound rates.''. (b) Conforming Amendments.--Section 1927 (42 U.S.C. 1396r-8) is amended-- (1) in subsection (d)-- (A) in paragraph (1), by adding at the end the following: ``(C) Notwithstanding the subparagraphs (A) and (B)-- ``(i) a Medicaid managed care organization with a contract under section 1903(m) may exclude or otherwise restrict coverage of a covered outpatient drug on the basis of policies or practices of the organization, such as those affecting utilization management, formulary adherence, and cost sharing or dispute resolution, in lieu of any State policies or practices relating to the exclusion or restriction of coverage of such drugs, provided, however, that any such exclusions and restrictions of coverage shall be subject to any contractual requirements and oversight by the State as contained in the Medicaid managed care organization's contract with the State, and the State shall maintain approval authority over the formulary used by the Medicaid managed care organization; and ``(ii) nothing in this section or paragraph (2)(A)(xiii) of section 1903(m) shall be construed as requiring a Medicaid managed care organization with a contract under such section to maintain the same such policies and practices as those established by the State for purposes of individuals who receive medical assistance for covered outpatient drugs on a fee-for-service basis.''; and (B) in paragraph (4), by inserting after subparagraph (E) the following: ``(F) Notwithstanding the preceding subparagraphs of this paragraph, any formulary established by Medicaid managed care organization with a contract under section 1903(m) may be based on positive inclusion of drugs selected by a formulary committee consisting of physicians, pharmacists, and other individuals with appropriate clinical experience as long as drugs excluded from the formulary are available through prior authorization, as described in paragraph (5).''; and (2) in subsection (j), by striking paragraph (1) and inserting the following: ``(1) Covered outpatients drugs are not subject to the requirements of this section if such drugs are-- ``(A) dispensed by health maintenance organizations, including Medicaid managed care organizations that contract under section 1903(m); and ``(B) subject to discounts under section 340B of the Public Health Service Act.''. (c) Reports.--Each State with a contract with a Medicaid managed care organization under section 1903(m) of the Social Security Act (42 U.S.C. 1396b(m)) shall report to the Secretary on a quarterly basis the total amount of rebates in dollars and volume received from manufacturers (as defined in section 1927(k)(5) of such Act (42 U.S.C. 1396r-8(k)(5)) for drugs provided to individuals enrolled with such an organization as a result of the amendments made by this section for both brand-name and generic drugs. The Secretary shall review the reports submitted by States under this subsection and, after such review, make publically available the aggregate data contained in such reports. (d) Effective Date.--This section and the amendments made by this section 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.
summary: Drug Rebate Equalization Act of 2009 - Amends title XIX (Medicaid) of the Social Security Act to reduce the costs of prescription drugs for enrollees of Medicaid managed care organizations by extending to such organizations the discounts offered under fee-for-service Medicaid plans. Requires the state contract with a Medicaid managed care organization to require that payment for covered outpatient drugs dispensed to Medicaid-eligible individuals enrolled with the organization be subject to the same rebate as the state is subject to. Requires also that capitation rates paid to the organization be: (1) based on actual cost experience related to rebates; and (2) subject to the federal regulations requiring actuarially sound rates.