1. Short title This Act may be cited as the Fair Drug Prices for Kids Act . 2. Reducing prescription drug costs for children's medicine (a) In general Section 1927(a) of the Social Security Act ( 42 U.S.C. 1396r–8 )(a) is amended by adding at the end the following new paragraph: (8) State option to apply rebate requirements to the State child health plan (A) In general A State may elect to apply the requirements of this section and regulations promulgated to carry out this section to covered outpatient drugs for which payment is available under the State child health plan under title XXI in the same manner as such requirements apply to the State plan under this title, subject to such guidance as the Secretary shall establish. (B) Application rules If a State makes an election under subparagraph (A), then, in applying this section with respect to that State— (i) paragraph (1) of this subsection shall be applied as if or section 2105 (if the State has elected to apply this section to the State child health plan under title XXI) were inserted after 1903(a) ; (ii) paragraph (7)(A) of this subsection shall be applied— (I) as if or section 2105 (if the State has elected to apply this section to the State child health plan under title XXI) were inserted after 1903(a) ; and (II) as if (or, if the State has elected to apply this section to the State child health plan under title XXI, on or after the date this section first applies to the State) were inserted after January 1, 2006 ; (iii) paragraph (7)(B)(ii) of this subsection shall be applied— (I) as if or section 2105 (if the State has elected to apply this section to the State child health plan under title XXI) were inserted after 1903(a) ; and (II) as if (or, if the State has elected to apply this section to the State child health plan under title XXI, on or after the date this section first applies to the State) were inserted after January 1, 2008