This bill provides statutory authority for regulations allowing for the use of varying best price points under value-based purchasing arrangements for the Medicaid Drug Rebate Program. (Value-based purchasing arrangements refer to arrangements in which the price of a drug is linked to clinical outcomes; such arrangements are mainly used for new high-cost treatments, such as gene therapies.)

The Government Accountability Office must study the impact of value-based purchasing arrangements on federal health care programs, including the bill's changes.

Additionally, the bill (1) exempts sales of drugs that are made under value-based purchasing arrangements from calculations of the manufacturer's average sales price for purposes of payments under Medicare medical services if the manufacturer reports multiple best prices under Medicaid by the bill's changes; and (2) requires the Centers for Medicare & Medicaid Services to establish a program under which state Medicaid programs may cover drugs in inpatient settings via value-based purchasing arrangements.

The bill's changes expire five years after enactment; any value-based purchasing arrangements in effect as of the date of termination continue to apply.