REIMBURSEMENT FOR DRUGS AND BIOLOGICALS.

SEC. 4556. REIMBURSEMENT FOR DRUGS AND BIOLOGICALS. (a) In General.—Section 1842 (42 U.S.C. 1395u) is amended by inserting after subsection (n) the following new subsection: “(o)(1) If a physician’s, supplier’s, or any other person’s bill or request for payment for services includes a charge for a drug 111 STAT. 463or biological for which payment may be made under this part and the drug or biological is not paid on a cost or prospective payment basis as otherwise provided in this part, the amount payable for the drug or biological is equal to 95 percent of the average wholesale price. “(2) If payment for a drug or biological is made to a licensed pharmacy approved to dispense drugs or biologicals under this part, the Secretary may pay a dispensing fee (less the applicable deductible and coinsurance amounts) to the pharmacy.”. (b) Conforming Amendment.—Section 1833(a)(1) (42 U.S.C. 13951(a)(1)), as amended by sections 4315(b) and 4531(b)(1), is amended— (1) by striking “and (R)” and inserting “(R)”; and (2) by striking the semicolon at the end and inserting the following: “, and (S) with respect to drugs and biologicals not paid on a cost or prospective payment basis as otherwise provided in this part (other than items and services described in subparagraph (B)), the amounts paid shall be 80 percent of the lesser of the actual charge or the payment amount established in section 1842(o);”. (c) Study and Report.—The Secretary of Health and Human Services shall study the effect on the average wholesale price of drugs and biologicals of the amendments made by subsection (a) and shall report to the Committees on Ways and Means and Commerce of the House of Representatives and the Committee on Finance of the Senate the result of such study not later than July 1, 1999. (d) Effective Date.—The amendments made by subsections (a) and (b) shall apply to drugs and biologicals furnished on or after January 1, 1998.