H.R. 2666 would codify federal regulations published in December 2020 for the Medicaid Drug Rebate Program. The bill also would apply value-based payment (VBP) discounts to the average manufacturer price (AMP) that wholesalers and pharmacies pay drug manufacturers for certain prescription drugs if those drugs fail to meet established criteria for clinical outcomes. AMPs are used for calculating rebates under the rebate program. The VBP discount applied to an AMP when a drug fails to meet clinical criteria would reduce rebates, thus increasing Medicaid’s costs. CBO estimates that enacting H.R. 2666 would increase direct spending by about $1 million over the 2025-2034 period. CBO estimates that enacting the bill would not affect revenues. CBO estimates that implementing H.R. 2666 would not affect spending subject to appropriation. The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.