Protecting Pharmacies in Medicaid Act

Key Points

• This bill bans a practice called 'spread pricing' in Medicaid. Currently, middleman companies often charge the government a high price for a drug but pay the pharmacy a much lower amount, pocketing the difference as profit.
• Under the new rules, these middlemen must use a 'pass-through' model. This means they must pay the pharmacy the full amount the government provided for the drug, plus a fair fee for the pharmacist's professional services.
• The goal is to help local pharmacies stay in business. Many small pharmacies are struggling or closing because the current system often pays them less than what it actually costs to buy and dispense medicine to patients.
• The government will conduct regular surveys to find out the real price pharmacies pay for drugs. Pharmacies that receive Medicaid money must participate in these surveys or face fines of up to $100,000 for lying or refusing to answer.
• These rules will apply to regular neighborhood pharmacies first, then to mail-order and specialty pharmacies about a year later. This ensures the government has accurate pricing data for all types of drug stores.
• The bill provides $9 million per year to track drug prices and $5 million for a government watchdog to make sure the new rules are being followed and that middlemen aren't finding new ways to hide fees.