[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2880 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 2880
To amend title XVIII of the Social Security Act to establish certain
requirements for pharmacy benefit managers under part D of the Medicare
program.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 26, 2023
Mr. Carter of Georgia (for himself, Ms. Blunt Rochester, Ms.
Malliotakis, and Mr. Auchincloss) introduced the following bill; which
was referred to the Committee on Energy and Commerce, and in addition
to the Committee on Ways and Means, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to establish certain
requirements for pharmacy benefit managers under part D of the Medicare
program.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protecting Patients Against PBM
Abuses Act''.
SEC. 2. ESTABLISHING CERTAIN REQUIREMENTS FOR PHARMACY BENEFIT MANAGERS
UNDER PART D OF THE MEDICARE PROGRAM.
(a) Prescription Drug Plans.--Section 1860D-12(b) of the Social
Security Act (42 U.S.C. 1395w-112(b)) is amended by adding at the end
the following new paragraph:
``(9) Responsibility of pharmacy benefit managers.--
``(A) In general.--Each contract entered into with
a PDP sponsor under this part with respect to a
prescription drug plan offered by such sponsor shall
provide that any pharmacy benefit manager acting on
behalf of such sponsor complies with the following
provisions:
``(i) The pharmacy benefit manager derives
no income with respect to any services provided
in connection with covered part D drugs
furnished under such plan from any entity other
than flat dollar amount service fees.
``(ii) The pharmacy benefit manager
receives such service fees only pursuant to a
written agreement between the manager and such
sponsor that sets forth the amount of any such
fees. Any such fee may not be directly or
indirectly based on, or contingent upon--
``(I) the price of any covered part
D drug;
``(II) discounts, rebates, fees, or
other remuneration with respect to such
drugs; or
``(III) any other circumstance
specified by the Secretary.
``(iii) With respect to a covered part D
drug dispensed by a pharmacy, the pharmacy
benefit manager may not charge such sponsor a
different amount for such drug's ingredient
cost or dispensing fee than the amount the
pharmacy benefit manager reimburses such
pharmacy for such drug's ingredient cost or
dispensing fee.
``(iv) With respect to a covered part D
drug dispensed by a network pharmacy, the
pharmacy benefit manager may not reimburse such
pharmacy an amount less than the amount the
pharmacy benefit manager would reimburse an
affiliated pharmacy for such drug.
``(v) With respect to each covered part D
drug included on the formulary of such plan for
which there is a drug that is not included on
such formulary with a therapeutic equivalence
rating of AB (as established pursuant to
section 505(j)(7) of the Federal Food, Drug,
and Cosmetic Act) in the same therapeutic class
or category of such covered part D drug, the
pharmacy benefit manager shall submit to such
plan a report specifying the difference between
the national average drug acquisition cost (as
published by the Secretary) for such drug not
included in such formulary and the negotiated
prices for such drug that is included in such
formulary.
``(B) Certification.--Each PDP sponsor (and each
pharmacy benefit manager providing services under a
prescription drug plan furnished by such sponsor) shall
furnish to the Secretary (in a time and manner
specified by the Secretary) an annual certification of
compliance with this paragraph, as well as such
information as the Secretary determines necessary to
carry out this paragraph.
``(C) Disgorgement of prohibited payments.--A
pharmacy benefit manager shall disgorge to the
Secretary any payment, remuneration, or other amount
received in violation of this paragraph or the contract
entered into with a PDP sponsor under this part with
respect to a prescription drug plan. A PDP sponsor
shall suspend payments to a pharmacy benefit manager
for failure to disgorge such amounts pursuant to the
preceding sentence or for other violations of this
paragraph.
``(D) Clarification.--The requirements of this
paragraph shall apply regardless of whether a PDP
sponsor is acting as its own pharmacy benefit manager
and regardless of whether a pharmacy benefit manager is
under common ownership or control of the PDP sponsor
with respect to which the manager is furnishing
services.
``(E) Definitions.--For purposes of this paragraph:
``(i) Affiliated pharmacy.--The term
`affiliated pharmacy' means, with respect to a
pharmacy benefit manager, a pharmacy that
directly or indirectly through one or more
intermediaries is owned by, controlled by, or
is under common ownership or control of such
manager, or a pharmacy in which such manager
has a financial interest.
``(ii) Pharmacy benefit manager.--The term
`pharmacy benefit manager' means any entity
(and any affiliate, subsidiary, or agent of
such entity) that, pursuant to an agreement
with a PDP sponsor either directly or through
an intermediary acts as a price negotiator or
group purchaser on behalf of such sponsor, or
manages the prescription drug benefits provided
by such sponsor, including by processing and
paying claims for covered part D drugs,
performing drug utilization review, processing
drug prior authorization requests, adjudicating
appeals or grievances related to covered part D
drugs, contracting with network pharmacies,
controlling the cost of such drugs, or
providing any related services.
``(F) Nondisclosure of certain information.--
Nothing in this paragraph shall be construed to require
public disclosure of any information that is a trade
secret or confidential information (as described in
section 552(b)(4) of title 5, United States Code).''.
(b) MA-PD Plans.--Section 1857(f)(3) of the Social Security Act (42
U.S.C. 1395w-27(f)(3)) is amended by adding at the end the following
new subparagraph:
``(F) Responsibility of pharmacy benefit
managers.--Section 1860D-12(b)(9).''.
SEC. 3. CONFLICT OF INTEREST.
Section 1860D-4(b)(3)(A)(ii)(I) of the Social Security Act (42
U.S.C. 1395w-104(b)(3)(A)(ii)(I)) is amended by striking ``with respect
to the sponsor and plan'' and replacing it with ``with respect to the
sponsor, plan, and any pharmacy benefit manager furnishing services to
such sponsor or plan''.
SEC. 4. PBM TRANSPARENCY.
Section 1150A of the Social Security Act (42 U.S.C. 1320b-23) is
amended--
(1) in subsection (b), by adding at the end the following
new paragraph:
``(4) In the case of the provision of information by a PBM
that manages prescription drug coverage under a contract with a
sponsor described in subsection (a)(1) for a plan so
described--
``(A) the aggregate dollar amount of all rebates
that the PBM received with respect to drugs furnished
under such plan from drug manufacturers;
``(B) the aggregate dollar amount of all
administrative fees that the PBM received with respect
to drugs furnished under such plan from drug
manufacturers;
``(C) the aggregate dollar amount of all rebates
described in subparagraph (A) that the PBM did not pass
through to such sponsor;
``(D) the percentage of the aggregate dollar amount
of all rebates described in subparagraph (A) that the
PBM did not pass through to such sponsor; and
``(E) with respect to all plans described in
subsection (a)(1) for which the PBM manages
prescription drug coverage, the highest percentage
calculated under subparagraph (D) and the lowest such
percentage.'';
(2) by redesignating subsections (c) and (d) as subsections
(d) and (e), respectively; and
(3) by inserting after subsection (b), the following new
subsection:
``(c) Publication of Part D Information.--The Secretary shall
publish, not less frequently than annually, the information reported
under subsection (b) by or on behalf of sponsors described in
subsection (a)(1) on a publicly available website, provided that such
information shall be made available in a form that does not disclose
the identity of a specific plan, the prices charged for specific drugs
or classes of drugs, or the amount of any rebates provided for specific
drugs or classes of drugs.''.
SEC. 5. EFFECTIVE DATE.
The amendments made by this Act shall take effect January 1, 2024.
SEC. 6. REGULATIONS.
Notwithstanding any other provision of law, the Secretary shall
initially implement the amendments made by this Act through interim
final regulations.
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