Title II, SEC. 2008. CONFORMING AMENDMENTS TO MEDICAID PROGRAM. 
      (a) In General. 

        (1) Requiring medicare rebate as condition of coverage. The first 
      sentence of section 1927(a)(1) of the Social Security Act (42 U.S.C. 
      1396r	8(a)(1)) is amended 

          (A) in the first sentence of paragraph (1), by striking ``and 
        paragraph (6)'' and inserting ``, paragraph (6), and (for calendar 
        quarters beginning on or after January 1, 1996) paragraph (7)''; and 

          (B) by adding at the end the following new paragraph: 

          ``(7) Requirement relating to rebate agreements for covered 
        outpatient drugs under medicare program. A manufacturer meets the 
        requirements of this paragraph for quarters in a year if the 
        manufacturer has in effect an agreement with the Secretary under 
        section 1850 for providing rebates for covered outpatient drugs 
        furnished to individuals under title XVIII during the year.''. 

        (2) Non-duplication of rebates. Section 1927(b)(1) of the Social 
      Security Act (42 U.S.C. 1396r	8(b)(1)) is amended 

          (A) by redesignating subparagraph (B) as subparagraph (C), and 

          (B) by inserting after subparagraph (A) the following new 
        subparagraph: 

          ``(B) Non-duplication of medicare rebate. Covered drugs furnished to 
        an individual eligible for benefits under both part B of title XVIII 
        and a State plan under this title shall not be included in the 
        determination of units of covered outpatient drugs subject to rebate 
        under this section.''. 

      (b) Effective Date. The amendments made by subsection (a) shall apply to 
    quarters beginning on or after January 1, 1996.