This Act may be cited as the Providing Veterans Essential Medications Act.

Section 1745(a)(3) of title 38, United States Code, is amended— (1) by striking Payment and inserting (A) Subject to subparagraph (B), payment; and (2) by adding at the end the following new subparagraphs: (B) In addition to payment described in subparagraph (A), the Secretary shall, at the election of a covered State home— (i) reimburse the covered State home for a costly medication; or (ii) furnish such costly medication to the covered State home. (C) In this paragraph: (i) The term costly medication means a drug or medicine for which the average wholesale price for one month’s supply, plus a 3 percent transaction fee, exceeds 8.5 percent of the payment under subparagraph (A) by the Secretary to a covered State home for care provided to the veteran who receives such costly medication during such month. (ii) The term covered State home means a State home that, in the course of nursing home care provided pursuant to a contract (or agreement) under paragraph (1), provides to a veteran a costly medication..