[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6283 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 6283
To improve services provided by pharmacy benefit managers.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 8, 2023
Mrs. Miller-Meeks (for herself, Ms. Barragan, Mrs. Chavez-DeRemer, Ms.
Manning, Ms. Malliotakis, Mr. Schneider, Mr. Kean of New Jersey, and
Ms. Spanberger) introduced the following bill; which was referred to
the Committee on Energy and Commerce, and in addition to the Committees
on Ways and Means, Education and the Workforce, and Oversight and
Accountability, 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 improve services provided by pharmacy benefit managers.
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 ``Delinking Revenue from Unfair
Gouging Act'' or the ``DRUG Act''.
SEC. 2. IMPROVING PHARMACY BENEFIT MANAGER SERVICES.
(a) Public Health Service Act.--Part D of title XXVII of the Public
Health Service Act (42 U.S.C. 300gg-111 et seq.) is amended by adding
at the end the following:
``SEC. 2799A-11. IMPROVING PHARMACY BENEFIT MANAGER SERVICES.
``(a) General.--For plan years beginning on or after January 1,
2026, except as provided in subsection (b), a pharmacy benefit manager
shall derive no remuneration from any entity for services, benefit
administration, or any other activities related to prescription drugs.
``(b) Exception for Bona Fide Service Fees.--
``(1) In general.--A pharmacy benefit manager may charge an
entity a bona fide service fee for the provision of services to
such entity if such fee is set forth in an agreement between
the pharmacy benefit manager and such entity, and the amount of
any bona fide service fee--
``(A) shall be a flat dollar amount; and
``(B) shall not be directly or indirectly based on,
or contingent upon--
``(i) a drug price (such as wholesale
acquisition cost) or drug benchmark price (such
as average wholesale price);
``(ii) the amount of discounts, rebates,
fees, or other direct or indirect remuneration
with respect to prescription drugs prescribed
to the participants, beneficiaries, or
enrollees in the group health plan or coverage
involved; or
``(iii) any other amounts prohibited by the
Secretary, the Secretary of Labor, and the
Secretary of the Treasury.
``(2) Definitions.--In this section--
``(A) the term `bona fide service fee' means fair
market value for a bona fide, itemized service actually
performed on behalf of an entity, that the entity would
otherwise perform (or contract for) in the absence of
the service arrangement and that are not passed on in
whole or in part to a client or customer, whether or
not the entity takes title to the drug; and
``(B) the term `pharmacy benefit manager' means any
person, business, or other entity such as a third-party
administrator, regardless of whether it identifies
itself as a pharmacy benefit manager, that, either
directly or through an intermediary (including an
affiliate, subsidiary, parent, or agent) or an
arrangement with a third party--
``(i) acts as a price negotiator or group
purchaser for prescription drugs on behalf of a
group health plan or health insurance issuer
offering group or individual health insurance
coverage; or
``(ii) manages or administers the
prescription drug benefits provided by a group
health plan or health insurance issuer offering
group or individual health insurance coverage,
including the processing and payment of claims
for prescription drugs, arranging alternative
access to or funding for prescription drugs,
the performance of drug utilization review, the
processing of drug prior authorization
requests, the adjudication of appeals or
grievances related to the prescription drug
benefit, contracting with network pharmacies,
controlling the cost of covered prescription
drugs, or the provision of related services.
``(c) Accountability and Conduct.--
``(1) In general.--A pharmacy benefit manager shall not--
``(A) charge a group health plan or health
insurance issuer offering group or individual health
insurance coverage a different amount for a
prescription drug's ingredient cost or dispensing fee
as compared to the amount the pharmacy benefit manager
reimburses a pharmacy for the prescription drug's
ingredient cost or dispensing fee;
``(B) reimburse a network pharmacy or pharmacist in
an amount less than the amount the pharmacy benefit
manager would reimburse a network pharmacy that is
owned, controlled by, or affiliated with the pharmacy
benefit manager for dispensing the same drug or for
providing the same pharmacist services; or
``(C) directly or indirectly engage in steering (as
defined in paragraph (2)) to a pharmacy that is owned,
controlled by, or affiliated with the pharmacy benefit
manager.
``(2) Steering.--In paragraph (1), the term `steering' with
respect to a pharmacy benefit man-ager includes--
``(A) providing or implementing a benefit design
that encourages a participant, beneficiary, or enrollee
to utilize a pharmacy that is owned, controlled by, or
affiliated with the pharmacy benefit manager, if such
design increases costs for the plan or a participant,
beneficiary, or enrollee, including requiring a
participant, beneficiary, or enrollee to pay higher
out-of-pocket costs for a prescription if the
participant, beneficiary, or enrollee chooses not to
use a pharmacy owned, controlled by, or affiliated with
the pharmacy benefit manager;
``(B) requiring a participant, beneficiary, or
enrollee to use only a pharmacy that is owned,
controlled by, or affiliated with the pharmacy benefit
manager;
``(C) retaliating, making further attempts to
influence a participant, beneficiary, or enrollee, or
treating a participant, beneficiary, or enrollee or a
participant, beneficiary, or enrollee's claim any
differently if a participant, beneficiary, or enrollee
chooses to use a pharmacy that is not owned, controlled
by, or affiliated with the pharmacy benefit manager; or
``(D) any other activities as defined by the
Secretary, the Secretary of Labor, and the Secretary of
the Treasury.
``(d) Enforcement.--
``(1) In general.--The Secretary, in consultation with the
Secretary of Labor and the Secretary of the Treasury, shall
enforce this section.
``(2) Disgorgement.--The pharmacy benefit manager shall
disgorge to a group health plan or health insurance issuer
offering group or individual health insurance coverage any
payment, remuneration, or other amount received by the pharmacy
benefit manager or an affiliate of such pharmacy benefit
manager in violation of paragraph (a) or the agreement entered
into with such plan or issuer for bona fide service fees.
``(3) Penalties.--A pharmacy benefit manager that violates
subsection (a), (b), or (c) shall be subject to a civil
monetary penalty in the amount of $10,000 for each day during
which such violation continues.
``(4) Procedure.--The provisions of section 1128A of the
Social Security Act, other than subsections (a) and (b) and the
first sentence of subsection (c)(1) of such section shall apply
to civil monetary penalties under this subsection in the same
manner as such provisions apply to a penalty or proceeding
under section 1128A of the Social Security Act.
``(e) Regulations.--Notwithstanding any other provision of law, the
Secretary shall initially implement this section through interim final
regulations.
``(f) Rules of Construction.--
``(1) Nothing in this section shall be construed as
prohibiting payments related to reimbursement for ingredient
costs to entities that acquire prescription drugs or pharmacy
dispensing fees.
``(2) Nothing in this section shall be construed to
prohibit rebates, discounts, or other price concessions from
being fully passed through to a group health plan or health
insurance issuer offering group or individual health insurance
coverage to lower net costs for prescription drugs.''.
(b) ERISA.--
(1) In general.--Subpart B of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1185 et seq.) is amended by inserting after section 725
the following:
``SEC. 726. IMPROVING PHARMACY BENEFIT MANAGER SERVICES.
``(a) In General.--For plan years beginning on or after January 1,
2026, except as provided in subsection (b), a pharmacy benefit manager
shall derive no remuneration from any entity for services, benefit
administration, or any other activities related to prescription drugs.
``(b) Exception for Bona Fide Service Fees.--
``(1) In general.--A pharmacy benefit man-ager may charge
an entity a bona fide service fee for the provision of services
to such entity if such fee is set forth in an agreement between
the pharmacy benefit manager and such entity and the amount of
any bona fide service fee--
``(A) shall be a flat dollar amount;
``(B) shall not be directly or indirectly based on,
or contingent upon--
``(i) a drug price (such as wholesale
acquisition cost) or drug benchmark price (such
as average wholesale price);
``(ii) the amount of discounts, rebates,
fees, or other direct or indirect remuneration
with respect to prescription drugs prescribed
to the participants, beneficiaries, or
enrollees in the group health plan or coverage
involved; or
``(iii) any other amounts prohibited by the
Secretary, the Secretary of Labor, and the
Secretary of the Treasury.
``(2) Definitions.--In this section--
``(A) the term `bona fide service fee' means fair
market value for a bona fide, itemized service actually
performed on behalf of an entity, that would otherwise
perform (or contract for) in the absence of the service
arrangement and that are not passed on in whole or in
part to a client or customer, whether or not the entity
takes title to the drug;
``(B) the term `pharmacy benefit manager' means any
person, business, or other entity such as a third-party
administrator, regardless of whether it identifies
itself as a pharmacy benefit manager, that, either
directly or through an intermediary (including an
affiliate, subsidiary, or agent) or an arrangement with
a third party--
``(i) acts as a price negotiator for
prescription drugs on behalf of a group health
plan or health insurance issuer offering group
health insurance coverage; or
``(ii) manages or administers the
prescription drug benefits provided by a group
health plan or health insurance issuer offering
group health insurance coverage, including the
processing and payment of claims for
prescription drugs, arranging alternative
access to or funding for prescription drugs,
the performance of drug utilization review, the
processing of drug prior authorization
requests, the adjudication of appeals or
grievances related to the prescription drug
benefit, contracting with network pharmacies,
controlling the cost of covered prescription
drugs, or the provision of related services.
``(c) Accountability and Conduct.--
``(1) In general.--A pharmacy benefit manager shall not--
``(A) charge a group health plan or health
insurance issuer offering group health insurance
coverage a different amount for a prescription drug's
ingredient cost or dispensing fee as compared to the
amount the pharmacy benefit manager reimburses a
pharmacy for the prescription drug's ingredient cost or
dispensing fee;
``(B) reimburse a network pharmacy or pharmacist in
an amount less than the amount the pharmacy benefit
manager would reimburse a network pharmacy that is
owned, controlled by, or affiliated with the pharmacy
benefit manager for dispensing the same drug or for
providing the same pharmacist services; or
``(C) directly or indirectly engage in steering (as
defined in paragraph (2)) to a pharmacy that is owned,
controlled by, or affiliated with the pharmacy benefit
manager.
``(2) Steering.--In paragraph (1), the term `steering' with
respect to a pharmacy benefit manager includes--
``(A) providing or implementing a benefit plan
design that encourages a participant or beneficiary to
utilize a pharmacy that is owned, controlled by, or
affiliated with the pharmacy benefit manager, if such
plan design increases costs for the plan or the
participant or beneficiary, including requiring a
participant or beneficiary to pay higher out-of-pocket
costs for a prescription if the participant or
beneficiary chooses not to use a pharmacy owned,
controlled by, or affiliated with the pharmacy benefit
manager;
``(B) requiring a participant or beneficiary to use
only a pharmacy that is owned, controlled by, or
affiliated with the pharmacy benefit manager;
``(C) retaliating, making further attempts to
influence a participant or beneficiary, or treating a
participant or beneficiary or a participant or
beneficiary's claim any differently if a participant or
beneficiary chooses to use a pharmacy that is not
owned, controlled by, or affiliated with the pharmacy
benefit manager; or
``(D) any other activities as defined by the
Secretary, the Secretary of Health and Human Services,
and the Secretary of the Treasury.
``(d) Enforcement.--
``(1) In general.--The Secretary, in consultation with the
Secretary of Health and Human Services and the Secretary of the
Treasury, shall enforce this section.
``(2) Disgorgement.--The pharmacy benefit manager shall
disgorge to a group health plan or health insurance issuer
offering group or individual health insurance coverage any
payment, remuneration, or other amount received by the pharmacy
benefit manager or an affiliate of such pharmacy benefit
manager in violation of paragraph (a) or the agreement entered
into with such plan or issuer for bona fide service fees.
``(3) Penalties.--A pharmacy benefit manager that violates
subsection (a), (b), or (c) shall be subject to a civil
monetary penalty in the amount of $10,000 for each day during
which such violation continues.
``(4) Procedure.--The provisions of section 1128A of the
Social Security Act, other than subsections (a) and (b) and the
first sentence of subsection (c)(1) of such section shall apply
to civil monetary penalties under this subsection in the same
manner as such provisions apply to a penalty or proceeding
under section 1128A of the Social Security Act.
``(e) Regulations.--Notwithstanding any other provision of law, the
Secretary shall initially implement this section through interim final
regulations.
``(f) Rules of Construction.--
``(1) Nothing in this section shall be construed as
prohibiting payments related to reimbursement for ingredient
costs to entities that acquire prescription drugs or pharmacy
dispensing fees.
``(2) Nothing in this section shall be construed to
prohibit rebates, discounts, or other price concessions from
being fully passed through to a group health plan or health
insurance issuer offering group or individual health insurance
coverage to lower net costs for prescription drugs.''.
(2) Clerical amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1001 et seq.) is amended by inserting after the item
relating to section 725 the following new item:
``Sec. 726. Improving pharmacy benefit manager services.''.
(c) Internal Revenue Code of 1986.--Sub-chapter B of chapter 100 of
the Internal Revenue Code of 1986 is amended by adding at the end the
following:
``SEC. 9826. IMPROVING PHARMACY BENEFIT MANAGER SERVICES.
``(a) In General.--For plan years beginning on or after January 1,
2026, except as provided in subsection (b), a pharmacy benefit manager
shall derive no remuneration from any entity for services, benefit
administration, or any other activities related to prescription drugs.
``(b) Exception for Bona Fide Services.--
``(1) In general.--A pharmacy benefit manager may charge an
entity a bona fide service fee for the provision of services to
such entity if such fee is set forth in an agreement between
the pharmacy benefit manager and such entity, and the amount of
any bona fide service fee--
``(A) shall be a flat dollar amount; and
``(B) shall not be directly or indirectly based on,
or contingent upon--
``(i) a drug price (such as wholesale
acquisition cost) or drug benchmark price (such
as average wholesale price);
``(ii) the amount of discounts, rebates,
fees, or other direct or indirect remuneration
with respect to prescription drugs prescribed
to the participants, beneficiaries, or
enrollees in the group health plan or coverage
involved; or
``(iii) any other amounts prohibited by the
Secretary, the Secretary of Labor, and the
Secretary of the Treasury.
``(2) Definitions.--In this section--
``(A) the term `bona fide service fee' means fair
market value for a bona fide, itemized service actually
performed on behalf of an entity, that the entity would
otherwise perform (or contract for) in the absence of
the arrangement and that are not passed on in whole or
in part to a client or customer, whether or not the
entity takes title to the drug; and
``(B) the term `pharmacy benefit manager' means any
person, business, or other entity such as a third-party
administrator, regardless of whether it identifies
itself as a pharmacy benefit manager, that, either
directly or through an intermediary (including an
affiliate, or agent) or an arrangement with a third
party--
``(i) acts as a price negotiator for
prescription drugs on behalf of a group health
plan; or
``(ii) manages or administers the
prescription drug benefits provided by a group
health plan, including the processing and
payment of claims for prescription drugs,
arranging alternative access to or funding for
prescription drugs, the performance of drug
utilization review, the processing of drug
prior authorization requests, the adjudication
of appeals or grievances related to the
prescription drug benefit, contracting with
network pharmacies, controlling the cost of
covered prescription drugs, or the provision of
related services.
``(c) Accountability and Conduct.--
``(1) In general.--A pharmacy benefit manager shall not--
``(A) charge a group health plan or health
insurance issuer offering group health insurance
coverage a different amount for a prescription drug's
ingredient cost or dispensing fee as compared to the
amount the pharmacy benefit manager reimburses a
pharmacy for the prescription drug's ingredient cost or
dispensing fee;
``(B) reimburse a network pharmacy or pharmacist in
an amount less than the amount the pharmacy benefit
manager would reimburse a network pharmacy that is
owned, controlled by, or affiliated with the pharmacy
benefit manager for dispensing the same drug or for
providing the same pharmacist services; or
``(C) directly or indirectly engage in steering (as
defined in paragraph (2)) to a pharmacy that is owned,
controlled by, or affiliated with the pharmacy benefit
manager.
``(2) Steering.--In paragraph (1), the term `steering' with
respect to a pharmacy benefit manager includes--
``(A) providing or implementing a benefit design
that encourages a participant or beneficiary to utilize
a pharmacy that is owned, controlled by, or affiliated
with the pharmacy benefit manager, if such benefit
design increases costs for the plan or the participant
or beneficiary, including requiring a participant or
beneficiary to pay higher out-of-pocket costs for a
prescription if the participant or beneficiary chooses
not to use a pharmacy owned, controlled by, or
affiliated with the pharmacy benefit manager;
``(B) requiring an enrollee to use only a pharmacy
that is owned, controlled by, or affiliated with the
pharmacy benefit manager;
``(C) retaliating, making further attempts to
influence a participant or beneficiary, or treating a
participant or beneficiary or a participant or
beneficiary's claim any differently if a participant or
beneficiary chooses to use a pharmacy that is not
owned, controlled by, or affiliated with the pharmacy
benefit manager; or
``(D) any other activities as defined by the
Secretary, the Secretary of Labor, and the Secretary of
Health and Human Service.
``(d) Enforcement.--
``(1) In general.--The Secretary, in consultation with the
Secretary of Labor and the Secretary of Health and Human
Services, shall enforce this section.
``(2) Disgorgement.--The pharmacy benefit manager shall
disgorge to a group health plan or health insurance issuer
offering group or individual health insurance coverage any
payment, remuneration, or other amount received by the pharmacy
benefit manager or an affiliate of such pharmacy benefit
manager in violation of paragraph (a) or the agreement entered
into with such plan or issuer for bona fide service fees.
``(3) Penalties.--A pharmacy benefit manager that violates
subsection (a), (b), or (c) shall be subject to a civil
monetary penalty in the amount of $10,000 for each day during
which such violation continues.
``(4) Procedure.--The provisions of section 1128A of the
Social Security Act, other than subsections (a) and (b) and the
first sentence of subsection (c)(1) of such section shall apply
to civil monetary penalties under this subsection in the same
manner as such provisions apply to a penalty or proceeding
under section 1128A of the Social Security Act.
``(e) Regulations.--Notwithstanding any other provision of law, the
Secretary shall initially implement the amendments made by this Act
through interim final regulations.
``(f) Rules of Construction.--
``(1) Nothing in this section shall be construed as
prohibiting payments related to reimbursement for ingredient
costs to entities that acquire prescription drugs or pharmacy
dispensing fees.
``(2) Nothing in this section shall be construed to
prohibit rebates, discounts, or other price concessions from
being fully passed through to a group health plan or health
insurance issuer offering group or individual health insurance
coverage to lower net costs for prescription drugs.''.
(d) Federal Employees Health Benefits Act.--Chapter 89 of subpart G
of part III of title 5 of the United States Code is amended by adding
at the end following:
``SEC. 8915. IMPROVING PHARMACY BENEFIT MANAGER SERVICES.
``(a) In General.--For plan years beginning on or after January 1,
2026, except as provided in subsection (b), a pharmacy benefit manager
shall derive no remuneration from any entity for services, benefit
administration, or any other activities related to prescription drugs.
``(b) Exception for Bona Fide Services.--
``(1) In general.--A pharmacy benefit manager may charge an
entity a bona fide service fee for the provision of services to
such entity if such fee is set forth in an agreement between
the pharmacy benefit manager and such entity, and
``(2) the amount of any bona fide service fee--
``(A) shall be a flat dollar amount;
``(B) shall not be directly or indirectly based on,
or contingent upon--
``(i) a drug price (such as wholesale
acquisition cost) or drug benchmark price (such
as average wholesale price);
``(ii) the amount of discounts, rebates,
fees, or other direct or indirect remuneration
with respect to prescription drugs prescribed
to the participants, beneficiaries, or
enrollees in the group health plan or coverage
involved; or
``(iii) any other amounts prohibited by the
Office of Personnel Management.
``(2) Definitions.--In this section--
``(A) the term `bona fide service fee' means fair
market value for a bona fide, itemized service actually
performed on behalf of an entity, that the entity would
otherwise perform (or contract for) in the absence of
the arrangement and that are not passed on in whole or
in part to a client or customer, whether or not the
entity takes title to the drug; and
``(B) the term `pharmacy benefit manager' means any
person, business, or other entity such as a third-party
administrator, regardless of whether it identifies
itself as a pharmacy benefit manager, that, either
directly or through an intermediary (including an
affiliate, or agent) or an arrangement with a third
party--
``(i) acts as a price negotiator for
prescription drugs on behalf of a health
benefits plan or carrier; or
``(ii) manages or administers the
prescription drug benefits provided by a health
benefits plan or carrier including the
processing and payment of claims for
prescription drugs, arranging alternative
access to or funding for prescription drugs,
the performance of drug utilization review, the
processing of drug prior authorization
requests, the adjudication of appeals or
grievances related to the prescription drug
benefit, contracting with network pharmacies,
controlling the cost of covered prescription
drugs, or the provision of related services.
``(c) Accountability and Conduct.--
``(1) In general.--A pharmacy benefit manager shall not--
``(A) charge a health benefits plan or carrier
different amount for a prescription drug's ingredient
cost or dispensing fee as compared to the amount the
pharmacy benefit manager reimburses a pharmacy for the
prescription drug's ingredient cost or dispensing fee;
``(B) reimburse a network pharmacy or pharmacist in
an amount less than the amount the pharmacy benefit
manager would reimburse a network pharmacy that is
owned, controlled by, or affiliated with the pharmacy
benefit manager for dispensing the same drug or for
providing the same pharmacist services; or
``(C) directly or indirectly engage in steering (as
defined in paragraph (2)) to a pharmacy that is owned,
controlled by, or affiliated with the pharmacy benefit
manager.
``(2) Steering.--In paragraph (1), the term `steering' with
respect to a pharmacy benefit manager includes--
``(A) providing or implementing a benefit design
that encourages a participant or beneficiary to utilize
a pharmacy that is owned, controlled by, or affiliated
with the pharmacy benefit manager, if such benefit
design increases costs for the plan or the participant
or beneficiary, including requiring a participant or
beneficiary to pay higher out-of-pocket costs for a
prescription if the participant or beneficiary chooses
not to use a pharmacy owned, controlled by, or
affiliated with the pharmacy benefit manager;
``(B) requiring an enrollee to use only a pharmacy
that is owned, controlled by, or affiliated with the
pharmacy benefit manager;
``(C) retaliating, making further attempts to
influence a participant or beneficiary, or treating a
participant or beneficiary or a participant or
beneficiary's claim any differently if a participant or
beneficiary chooses to use a pharmacy that is not
owned, controlled by, or affiliated with the pharmacy
benefit manager; or
``(D) any other activities as defined by the Office
of Personnel Management.
``(d) Enforcement.--
``(1) In general.--The Office of Personnel Management shall
enforce this section.
``(2) Disgorgement.--The pharmacy benefit manager shall
disgorge to a health benefits plan or carrier any payment,
remuneration, or other amount received by the pharmacy benefit
manager or an affiliate of such pharmacy benefit manager in
violation of paragraph (a) or the agreement entered into with
such plan or carrier for bona fide service fees.
``(3) Penalties.--A pharmacy benefit manager that violates
subsection (a), (b), or (c) shall be subject to a civil
monetary penalty in the amount of $10,000 for each day during
which such violation continues.
``(4) Procedure.--The provisions of section 1128A of the
Social Security Act, other than subsections (a) and (b) and the
first sentence of sub-section (c)(1) of such section shall
apply to civil monetary penalties under this subsection in the
same manner as such provisions apply to a penalty or proceeding
under section 1128A of the Social Security Act, except that for
the purpose of this paragraph the `Office of Personnel
Management' is substituted wherever the term `Secretary' is
used in section 1128A.
``(e) Regulations.--Notwithstanding any other provision of law, the
Director shall initially implement the amendments made by this Act
through interim final regulations.
``(f) Rules of Construction.--
``(1) Nothing in this section shall be construed as
prohibiting payments related to reimbursement for ingredient
costs to entities that acquire prescription drugs or pharmacy
dispensing fees.
``(2) Nothing in this section shall be construed to
prohibit rebates, discounts, or other price concessions from
being fully passed through to a health benefits plan or carrier
to lower net costs for prescription drugs.''.
<all>