Drug Price Transparency in Medicaid Act of 2023

HR 1613, the Drug Price Transparency in Medicaid Act of 2023, requires Medicaid programs to mandate pass-through pricing for covered outpatient drugs. This means pharmacy benefit managers (PBMs) and managed care entities must pay pharmacies directly for the drug's ingredient cost plus a fixed dispensing fee, eliminating "spread pricing" where PBMs keep profits from the difference between what they pay pharmacies and what Medicaid reimburses. The bill also establishes a national survey of retail pharmacy drug prices to determine average acquisition costs, requiring participating pharmacies to report pricing data to states. These changes apply to Medicaid contracts entered into or renewed 18 months after the bill's enactment, affecting states, PBMs, managed care organizations, and community pharmacies.