[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1339 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 1339
To provide for increased oversight of entities that provide pharmacy
benefit management services on behalf of group health plans and health
insurance coverage.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 27, 2023
Mr. Sanders (for himself, Mr. Cassidy, Mrs. Murray, and Mr. Marshall)
introduced the following bill; which was read twice and referred to the
Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To provide for increased oversight of entities that provide pharmacy
benefit management services on behalf of group health plans and health
insurance coverage.
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 ``Pharmacy Benefit Manager Reform
Act''.
SEC. 2. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT MANAGEMENT
SERVICES.
(a) PHSA.--Title XXVII of the Public Health Service Act (42 U.S.C.
300gg et seq.) is amended--
(1) in part D (42 U.S.C. 300gg-111 et seq.), by adding at
the end the following new section:
``SEC. 2799A-11. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT
MANAGEMENT SERVICES.
``(a) In General.--For plan years beginning on or after January 1,
2025, a group health plan or health insurance issuer offering group
health insurance coverage or an entity providing pharmacy benefit
management services on behalf of such a plan or issuer shall not enter
into a contract with an applicable entity that limits the disclosure of
information to plan sponsors in such a manner that prevents the plan or
issuer, or an entity providing pharmacy benefit management services on
behalf of a plan or issuer, from making the reports described in
subsection (b).
``(b) Reports.--
``(1) In general.--For plan years beginning on or after
January 1, 2025, not less frequently than annually, an entity
providing pharmacy benefit management services on behalf of a
covered group health plan shall submit to the plan sponsor of
such covered group health plan a report in accordance with this
subsection and make such report available to the plan sponsor
in a machine-readable format and, as the Secretary, the
Secretary of Labor, and the Secretary of the Treasury may
determine, other formats. Each such report shall include, with
respect to the covered group health plan--
``(A) as applicable, information collected from
drug manufacturers by such issuer or entity on the
total amount of copayment assistance dollars paid, or
copayment cards applied, that were funded by the drug
manufacturer with respect to the participants and
beneficiaries in such plan;
``(B) a list of each drug covered by such plan or
entity providing pharmacy benefit management services
that was billed during the reporting period, including,
with respect to each such drug during the reporting
period--
``(i) the brand name, generic or
nonproprietary name, and National Drug Code;
``(ii) the number of participants and
beneficiaries for whom the drug was billed
during the reporting period, the total number
of prescription claims for the drug (including
original prescriptions and refills), and the
total number of dosage units of the drug
dispensed across the reporting period;
``(iii) for each claim or dosage unit
described in clause (ii), the type of
dispensing channel used, such as retail, mail
order, or specialty pharmacy;
``(iv) the wholesale acquisition cost,
listed as cost per days supply, cost per dosage
unit, and cost per typical course of treatment
(as applicable);
``(v) the total out-of-pocket spending by
participants and beneficiaries on such drug
after application of any benefits under the
plan or coverage, including participant and
beneficiary spending through copayments,
coinsurance, and deductibles, but not including
any amounts spent by participants and
beneficiaries on drugs not covered under the
plan or coverage or for which no claim is
submitted to the plan or coverage; and
``(vi) for any drug for which gross
spending by the plan exceeded $10,000 and that
is one of the 50 prescription drugs for which
the group health plan spent the most on
prescription drug benefits during the reporting
period--
``(I) a list of all other drugs in
the same therapeutic class, including
brand name drugs and biological
products and generic drugs or
biosimilar biological products that are
in the same therapeutic class as such
drug; and
``(II) if applicable, the rationale
for preferred formulary placement of
such drug in that therapeutic class,
selected from a list of standard
rationales established by the
Secretary;
``(C) a list of each therapeutic class of drugs
that were dispensed under the health plan during the
reporting period, and, with respect to each such
therapeutic class of drugs, during the reporting
period--
``(i) total gross spending by the plan,
before rebates, fees, alternative discounts, or
other remuneration;
``(ii) the number of participants and
beneficiaries who filled a prescription for a
drug in that class;
``(iii) if applicable to that class, a
description of the formulary tiers and
utilization management mechanisms (such as
prior authorization or step therapy) employed
for drugs in that class;
``(iv) the total out-of-pocket spending by
participants and beneficiaries, including
participant and beneficiary spending through
copayments, coinsurance, and deductibles; and
``(v) for each therapeutic class under
which 3 or more drugs are included on the
formulary of such plan--
``(I) the amount received, or
expected to be received, by such
entity, from an applicable entity, in
rebates, fees, alternative discounts,
or other remuneration that--
``(aa) has been paid, or
will be paid, by such an
applicable entity for claims
incurred during the reporting
period; or
``(bb) is related to
utilization of drugs or drug
spending;
``(II) the total net spending by
the health plan on that class of drugs;
and
``(III) the net price per typical
course of treatment or 30-day supply
incurred by the health plan and its
participants and beneficiaries, after
rebates, fees, alternative discounts,
or other remuneration provided by an
applicable entity, for drugs dispensed
within such therapeutic class during
the reporting period;
``(D) total gross spending on prescription drugs by
the plan during the reporting period, before rebates,
fees, alternative discounts, or other remuneration
provided by an applicable entity;
``(E) the total amount received, or expected to be
received, by the health plan, from an applicable
entity, in rebates, fees, alternative discounts, and
other remuneration received from any such entities,
related to utilization of drug or drug spending under
that health plan during the reporting period;
``(F) the total net spending on prescription drugs
by the health plan during the reporting period;
``(G) amounts paid directly or indirectly in
rebates, fees, or any other type of compensation (as
defined in section 408(b)(2)(B)(ii)(dd)(AA) of the
Employee Retirement Income Security Act of 1974) to
brokers, consultants, advisors, or any other individual
or firm who referred the group health plan's business
to the pharmacy benefit manager; and
``(H) a summary document that includes such
information described in subparagraphs (A) through (G)
as the Secretary determines useful for plan sponsors
for purposes of selecting pharmacy benefit management
services, such as an estimated net price to plan
sponsor and participant or beneficiary, a cost per
claim, the fee structure or reimbursement model, and
estimated cost per participant or beneficiary.
``(2) Supplementary reporting for intra-company
prescription drug transactions.--
``(A) In general.--A health insurance issuer
offering covered group health insurance coverage or an
entity providing pharmacy benefit management services
under a covered group health plan or covered group
health insurance coverage shall submit, together with
the report under paragraph (1), a supplementary report
every 6 months to the plan sponsor that includes--
``(i) an explanation of any benefit design
parameters that encourage or require
participants and beneficiaries in the plan or
coverage to fill prescriptions at mail order,
specialty, or retail pharmacies that are wholly
or partially-owned by that issuer or entity
providing pharmacy benefit management services
under such plan or coverage, including
mandatory mail and specialty home delivery
programs, retail and mail auto-refill programs,
and copayment incentives funded by an entity
providing pharmacy benefit management services;
``(ii) the percentage of total
prescriptions charged to the plan, coverage, or
participants and beneficiaries in the plan or
coverage, that were dispensed by mail order,
specialty, or retail pharmacies that are wholly
or partially-owned by the issuer or entity
providing pharmacy benefit management services;
and
``(iii) a list of all drugs dispensed by
such wholly or partially-owned pharmacy and
charged to the plan or coverage, or
participants and beneficiaries of the plan or
coverage, during the applicable quarter, and,
with respect to each drug--
``(I) the amounts charged, per
dosage unit, per course of treatment,
per 30-day supply, and per 90-day
supply, with respect to participants
and beneficiaries in the plan or
coverage, including amounts charged to
the plan or coverage and amounts
charged to the participants and
beneficiaries;
``(II) the median amount charged to
the plan or coverage, per dosage unit,
per course of treatment, per 30-day
supply, and per 90-day supply,
including amounts paid by the
participants and beneficiaries, when
the same drug is dispensed by other
pharmacies that are not wholly or
partially-owned by the issuer or entity
and that are included in the pharmacy
network of that plan or coverage;
``(III) the interquartile range of
the costs, per dosage unit, per course
of treatment, per 30-day supply, and
per 90-day supply, including amounts
paid by the participants and
beneficiaries, when the same drug is
dispensed by other pharmacies that are
not wholly or partially-owned by the
issuer or entity and that are included
in the pharmacy network of that plan or
coverage;
``(IV) the lowest cost, per dosage
unit, per course of treatment, per 30-
day supply, and per 90-day supply, for
such drug, including amounts charged to
the plan or issuer and participants and
beneficiaries, that is available from
any pharmacy included in the network of
the plan or coverage;
``(V) the net acquisition cost per
dosage unit and for a 30 day-supply,
and the acquisition cost per typical
course of treatment, if the drug is
subject to a maximum price discount;
and
``(VI) other information with
respect to the cost of the drug, as
determined by the Secretary, such as
average sales price, wholesale
acquisition cost, and national average
drug acquisition cost per dosage unit,
per typical course of treatment, or per
30-day supply, for such drug, including
amounts charged to the plan or issuer
and participants and beneficiaries
among all pharmacies included in the
network of the plan or coverage.
``(B) Plans and coverage offered by small
employers.--A health insurance issuer offering covered
group health insurance coverage that is not covered
group health insurance coverage or an entity providing
pharmacy benefit management services under a group
health plan that is not a covered group health plan or
under group health insurance coverage that is not
covered group health insurance coverage that conducts
transactions with a wholly or partially-owned pharmacy
shall submit, together with the report under paragraph
(1), a supplementary report every 6 months to the plan
sponsor that includes the information described in
clauses (i) and (ii) of subparagraph (A).
``(3) Privacy requirements.--
``(A) Relationship to hipaa regulations.--Nothing
in this section shall be construed to modify the
requirements for the creation, receipt, maintenance, or
transmission of protected health information under the
privacy, security, breach notification, and enforcement
regulations in parts 160 and 164 of title 45, Code of
Federal Regulations (or successor regulations).
``(B) Requirement.--A report submitted under
paragraph (1) or (2) shall contain only summary health
information, as defined in section 164.504(a) of title
45, Code of Federal Regulations (or successor
regulations).
``(C) Clarification regarding certain disclosures
of information.--
``(i) Reasonable restrictions.--Nothing in
this section prevents a health insurance issuer
offering group health insurance coverage or an
entity providing pharmacy benefit management
services on behalf of a group health plan or
group health insurance coverage from placing
reasonable restrictions on the public
disclosure of the information contained in a
report under paragraph (1) or (2).
``(ii) Limitations.--A health insurance
issuer offering group health insurance coverage
or an entity providing pharmacy benefit
management services on behalf of a group health
plan or group health insurance coverage may not
restrict disclosure of such reports to the
Department of Health and Human Services, the
Department of Labor, the Department of the
Treasury, or any other Federal agency
responsible for enforcement activities under
this section for purposes of enforcement under
this section or other applicable law, or to the
Comptroller General of the United States in
accordance with paragraph (6).
``(4) Use and disclosure by plan sponsors.--
``(A) Prohibition.--A plan sponsor may not--
``(i) fail or refuse to hire, or discharge,
any employee, or otherwise discriminate against
any employee with respect to the compensation,
terms, conditions, or privileges of employment
of the employee, because of information
submitted under paragraph (1) or (2) attributed
to the employee or a dependent of the employee;
or
``(ii) limit, segregate, or classify the
employees of the employer in any way that would
deprive or tend to deprive any employee of
employment opportunities or otherwise adversely
affect the status of the employee as an
employee, because of information submitted
under paragraph (1) or (2) attributed to the
employee or a dependent of the employee.
``(B) Disclosure and redisclosure.--A plan sponsor
shall not disclose the information received under
paragraph (1) or (2) except--
``(i) to an occupational or other health
researcher if the research is conducted in
compliance with the regulations and protections
provided for under part 46 of title 45, Code of
Federal Regulations (or successor regulations);
``(ii) in response to an order of a court,
except that the plan sponsor may disclose only
the information expressly authorized by such
order;
``(iii) to the Department of Health and
Human Services, the Department of Labor, the
Department of the Treasury, or other Federal
agency responsible for enforcement activities
under this section; or
``(iv) to a contractor or agent for
purposes of health plan administration, if such
contractor or agent agrees, in writing, to
abide by the same use and disclosure
restrictions as the plan sponsor.
``(C) Relationship to hipaa regulations.--With
respect to the regulations promulgated by the Secretary
of Health and Human Services under part C of title XI
of the Social Security Act and section 264 of the
Health Insurance Portability and Accountability Act of
1996, subparagraph (B) does not prohibit a covered
entity (as defined for purposes of such regulations)
from any use or disclosure of health information that
is authorized for the covered entity under such
regulations. The previous sentence does not affect the
authority of such Secretary to modify such regulations.
``(D) Enforcement.--
``(i) In general.--The powers, procedures,
and remedies provided in section 207 of the
Genetic Information Nondiscrimination Act to a
person alleging a violation of title II of such
Act shall be the powers, procedures, and
remedies this subparagraph provides for any
person alleging a violation of this paragraph.
``(ii) Prohibition against retaliation.--No
person shall discriminate against any
individual because such individual has opposed
any act or practice made unlawful by this
paragraph or because such individual made a
charge, testified, assisted, or participated in
any manner in an investigation, proceeding, or
hearing under this paragraph. The remedies and
procedures otherwise provided for under this
subparagraph shall be available to aggrieved
individuals with respect to violations of this
clause.
``(5) Additional reporting.--
``(A) Reporting with respect to group health plans
offered by small employers.--For plan years beginning
on or after January 1, 2025, not less frequently than
annually, an entity providing pharmacy benefit
management services on behalf of a group health plan
that is not a covered group health plan shall submit to
the plan sponsor of such group health plan a report in
accordance with this paragraph, and make such report
available to the plan sponsor in a machine-readable
format, and such other formats as the Secretary, the
Secretary of Health and Human Services, and the
Secretary of the Treasury may determine. Each such
report shall include, with respect to the applicable
group health plan, the information described in
subparagraphs (A), (D), (E), (F), (G), and (H) of
paragraph (1).
``(B) Opt-in for group health insurance coverage.--
``(i) In general.--A plan sponsor may, on
an annual basis, beginning with plan years
beginning on or after January 1, 2025, elect to
require a health insurance issuer offering
group health insurance coverage to submit to
such plan sponsor a report in accordance with
this subsection.
``(ii) Contents of reports.--
``(I) Covered group health
insurance coverage.--In the case of an
issuer that offers covered group health
insurance coverage, a report provided
pursuant to clause (i) shall include,
with respect to the applicable covered
group health insurance coverage, the
information required under paragraph
(1) for covered group health plans.
``(II) Other group health insurance
coverage.--In the case of an issuer
that offers group health insurance
coverage that is not covered group
health insurance, a report provided
pursuant to clause (i) shall include,
with respect to the applicable group
health insurance coverage, the
information described in subparagraphs
(A), (D), (E), (F), and (G) of
paragraph (1).
``(iii) Application.--For purposes of
reports submitted in accordance with this
subparagraph, paragraph (1) shall be applied by
substituting `group health insurance coverage'
or `health insurance issuer', as applicable,
for `group health plan', `group plan', and
`plan' where such terms appear in such
paragraph.
``(iv) Required reporting for all group
health insurance coverage.--Each health
insurance issuer of health insurance coverage
shall annually submit the information described
in paragraph (1)(H), regardless of whether the
plan sponsor made the election described in
clause (i) for the applicable year.
``(6) Submissions to gao.--A health insurance issuer
offering group health insurance coverage or an entity providing
pharmacy benefit management services on behalf of a group
health plan shall submit to the Comptroller General of the
United States each of the first 2 reports submitted to a plan
sponsor under paragraph (1) or (5) with respect to such
coverage or plan, and other such reports as requested, in
accordance with the privacy requirements under paragraph (3),
and such other information that the Comptroller General
determines necessary to carry out the study under section 2(f)
of the Pharmacy Benefit Manager Reform Act.
``(7) Standard formats.--
``(A) In general.--Not later than June 1, 2024, the
Secretary, the Secretary of Labor, and the Secretary of
the Treasury shall specify, through rulemaking,
standard formats for health insurance issuers and
entities providing pharmacy benefit management services
to submit reports required under this subsection.
``(B) Limited form of report.--The Secretary, the
Secretary of Labor, and the Secretary of the Treasury
shall define through rulemaking a limited form of the
reports under paragraphs (1) and (2) required to be
submitted to plan sponsors who also are drug
manufacturers, drug wholesalers, entities providing
pharmacy benefit management services, or other direct
participants in the drug supply chain, in order to
prevent anti-competitive behavior.
``(c) Limitations on Spread Pricing.--
``(1) In general.--For plan years beginning on or after
January 1, 2025, a group health plan or health insurance issuer
offering group or individual health insurance coverage shall
not charge participants and beneficiaries, and an entity
providing pharmacy benefit management services under such a
plan or coverage shall not charge the plan, issuer, or
participants and beneficiaries, a price for a prescription drug
that exceeds the price paid to the pharmacy for such drug,
excluding penalties paid by the pharmacy (as described in
paragraph (2)) to such plan, issuer, or entity.
``(2) Rule of construction.--For purposes of paragraph (1),
penalties paid by pharmacies include only the following:
``(A) A penalty paid if an original claim for a
prescription drug was submitted fraudulently by the
pharmacy to the plan, issuer, or entity.
``(B) A penalty paid if the original claim payment
made by the plan, issuer, or entity to the pharmacy was
inconsistent with the reimbursement terms in any
contract between the pharmacy and the plan, issuer, or
entity.
``(C) A penalty paid if the pharmacist services
billed to the plan, issuer, or entity were not rendered
by the pharmacy.
``(d) Full Rebate Pass-Through to Plan.--
``(1) In general.--For plan years beginning on or after
January 1, 2025, a third-party administrator of a group health
plan, a health insurance issuer offering group health insurance
coverage, or an entity providing pharmacy benefit management
services under such health plan or health insurance coverage
shall--
``(A) remit 100 percent of rebates, fees,
alternative discounts, and other remuneration received
from any applicable entity that are related to
utilization of drugs under such health plan or health
insurance coverage, to the group health plan; and
``(B) ensure that any contract entered into by such
third-party administrator, health insurance issuer, or
entity providing pharmacy benefit management services
with an applicable entity remit 100 percent of rebates,
fees, alternative discounts, and other remuneration
received to the third-party administrator, health
insurance issuer, or entity providing pharmacy benefit
management services.
``(2) Form and manner of remittance.--Such rebates, fees,
alternative discounts, and other remuneration shall be--
``(A) remitted to the group health plan or group
health insurance coverage in a timely fashion after the
period for which such rebates, fees, alternative
discounts, or other remuneration is calculated, and in
no case later than 90 days after the end of such
period;
``(B) fully disclosed and enumerated to the group
health plan sponsor, as described in paragraphs (1) and
(4) of subsection (b);
``(C) available for audit by the plan sponsor, or a
third-party designated by a plan sponsor not less than
once per plan year; and
``(D) returned to the issuer or entity providing
pharmaceutical benefit management services by the group
health plan if audits by such issuer or entity indicate
that the amounts received are incorrect after such
amounts have been paid to the group health plan.
``(3) Audit of rebate contracts.--A third-party
administrator of a group health plan, a health insurance issuer
offering group health insurance coverage, or an entity
providing pharmacy benefit management services under such
health plan or health insurance coverage shall make rebate
contracts with rebate aggregators or drug manufacturers
available for audit by such plan sponsor or designated third-
party, subject to confidentiality agreements to prevent re-
disclosure of such contracts.
``(4) Auditors.--The applicable plan sponsor may select an
auditor for purposes of carrying out audits under paragraphs
(2)(C) and (3).
``(5) Rule of construction.--Nothing in this subsection
shall be construed to prohibit payments to entities offering
pharmacy benefit management services for bona fide services
using a fee structure not contemplated by this subsection,
provided that such fees are transparent to group health plans
and health insurance issuers.
``(e) Enforcement.--
``(1) In general.--The Secretary, in consultation with the
Secretary of Labor and the Secretary of the Treasury, shall
enforce this section.
``(2) Failure to provide timely information.--A health
insurance issuer or an entity providing pharmacy benefit
management services that violates subsection (a) or fails to
provide information required under subsection (b); a group
health plan, health insurance issuer, or entity providing
pharmacy benefit management services that violates subsection
(c); or a third-party administrator of a group health plan, a
health insurance issuer offering group health insurance
coverage, or an entity providing pharmacy benefit management
services that violates subsection (d) shall be subject to a
civil monetary penalty in the amount of $10,000 for each day
during which such violation continues or such information is
not disclosed or reported.
``(3) False information.--A health insurance issuer, entity
providing pharmacy benefit management services, or drug
manufacturer that knowingly provides false information under
this section shall be subject to a civil money penalty in an
amount not to exceed $100,000 for each item of false
information. Such civil money penalty shall be in addition to
other penalties as may be prescribed by law.
``(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.
``(5) Waivers.--The Secretary may waive penalties under
paragraph (2), or extend the period of time for compliance with
a requirement of this section, for an entity in violation of
this section that has made a good-faith effort to comply with
this section.
``(f) Rule of Construction.--Nothing in this section shall be
construed to permit a health insurance issuer, group health plan, or
other entity to restrict disclosure to, or otherwise limit the access
of, the Department of Health and Human Services to a report described
in subsection (b)(1) or information related to compliance with
subsection (a) by such issuer, plan, or entity.
``(g) Definitions.--In this section--
``(1) the term `applicable entity' means--
``(A) a drug manufacturer, distributor, wholesaler,
rebate aggregator (or other purchasing entity designed
to aggregate rebates), group purchasing organization,
or associated third party;
``(B) any subsidiary, parent, affiliate, or
subcontractor of a group health plan, health insurance
issuer, entity that provides pharmacy benefit
management services on behalf of such a plan or issuer,
or any entity described in subparagraph (A); or
``(C) such other entity as the Secretary, the
Secretary of Labor, and the Secretary of the Treasury
may specify through rulemaking;
``(2) the term `covered group health insurance coverage'
means health insurance coverage offered in connection with a
group health plan maintained by a large employer;
``(3) the term `covered group health plan' means a group
health plan maintained by a large employer;
``(4) the term `gross spending', with respect to
prescription drug benefits under a group health plan or health
insurance coverage, means the amount spent by a group health
plan or health insurance issuer on prescription drug benefits,
calculated before the application of manufacturer rebates,
fees, alternative discounts, or other remuneration;
``(5) the term `large employer' means, in connection with a
group health plan with respect to a calendar year and a plan
year, an employer who employed an average of at least 50
employees on business days during the preceding calendar year
and who employs at least 1 employee on the first day of the
plan year;
``(6) the term `net spending', with respect to prescription
drug benefits under a group health plan or health insurance
coverage, means the amount spent by a group health plan or
health insurance issuer on prescription drug benefits,
calculated after the application of manufacturer rebates, fees,
alternative discounts, or other remuneration;
``(7) the term `plan sponsor' has the meaning given such
term in section 3(16)(B) of the Employee Retirement Income
Security Act of 1974;
``(8) the term `remuneration' has the meaning given such
term by the Secretary, the Secretary of Labor, and the
Secretary of the Treasury, through notice and comment
rulemaking;
``(9) the term `small employer' means, in connection with a
group health plan with respect to a calendar year and a plan
year, an employer who employed an average of at least 1 but not
more than 49 employees on business days during the preceding
calendar year and who employs at least 1 employee on the first
day of the plan year; and
``(10) the term `wholesale acquisition cost' has the
meaning given such term in section 1847A(c)(6)(B) of the Social
Security Act.''; and
(2) in section 2723 (42 U.S.C. 300gg-22)--
(A) in subsection (a)--
(i) in paragraph (1), by inserting ``(other
than section 2799A-11)'' after ``part D''; and
(ii) in paragraph (2), by inserting
``(other than section 2799A-11)'' after ``part
D'';
(B) in subsection (b)--
(i) in paragraph (1), by inserting ``(other
than section 2799A-11)'' after ``part D'';
(ii) in paragraph (2)(A), by inserting
``(other than section 2799A-11)'' after ``part
D''; and
(iii) in paragraph (2)(C)(ii), by inserting
``(other than section 2799A-11)'' after ``part
D''.
(b) ERISA.--
(1) In general.--Subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1021 et seq.)
is amended--
(A) in subpart B of part 7 (29 U.S.C. 1185 et
seq.), by adding at the end the following:
``SEC. 726. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT
MANAGEMENT SERVICES.
``(a) In General.--For plan years beginning on or after January 1,
2025, a group health plan (or health insurance issuer offering group
health insurance coverage in connection with such a plan) or an entity
providing pharmacy benefit management services on behalf of such a plan
or issuer shall not enter into a contract with an applicable entity
that limits the disclosure of information to plan sponsors in such a
manner that prevents the plan or issuer, or an entity providing
pharmacy benefit management services on behalf of a plan or issuer,
from making the reports described in subsection (b).
``(b) Reports.--
``(1) In general.--For plan years beginning on or after
January 1, 2025, not less frequently than annually, an entity
providing pharmacy benefit management services on behalf of a
covered group health plan shall submit to the plan sponsor of
such covered group health plan a report in accordance with this
subsection and make such report available to the plan sponsor
in a machine-readable format and, as the Secretary may
determine, other formats. Each such report shall include, with
respect to the covered group health plan--
``(A) as applicable, information collected from
drug manufacturers by such issuer or entity on the
total amount of copayment assistance dollars paid, or
copayment cards applied, that were funded by the drug
manufacturer with respect to the participants and
beneficiaries in such plan;
``(B) a list of each drug covered by such plan or
entity providing pharmacy benefit management services
that was billed during the reporting period, including,
with respect to each such drug during the reporting
period--
``(i) the brand name, generic or
nonproprietary name, and National Drug Code;
``(ii) the number of participants and
beneficiaries for whom the drug was billed
during the reporting period, the total number
of prescription claims for the drug (including
original prescriptions and refills), and the
total number of dosage units of the drug
dispensed across the reporting period;
``(iii) for each claim or dosage unit
described in clause (ii), the type of
dispensing channel used, such as retail, mail
order, or specialty pharmacy;
``(iv) the wholesale acquisition cost,
listed as cost per days supply, cost per dosage
unit, and cost per typical course of treatment
(as applicable);
``(v) the total out-of-pocket spending by
participants and beneficiaries on such drug
after application of any benefits under the
plan or coverage, including participant and
beneficiary spending through copayments,
coinsurance, and deductibles, but not including
any amounts spent by participants and
beneficiaries on drugs not covered under the
plan or coverage or for which no claim is
submitted to the plan or coverage; and
``(vi) for any drug for which gross
spending by the plan exceeded $10,000 and that
is one of the 50 prescription drugs for which
the group health plan spent the most on
prescription drug benefits during the reporting
period--
``(I) a list of all other drugs in
the same therapeutic class, including
brand name drugs and biological
products and generic drugs or
biosimilar biological products that are
in the same therapeutic class as such
drug; and
``(II) if applicable, the rationale
for preferred formulary placement of
such drug in that therapeutic class,
selected from a list of standard
rationales established by the
Secretary;
``(C) a list of each therapeutic class of drugs
that were dispensed under the health plan during the
reporting period, and, with respect to each such
therapeutic class of drugs, during the reporting
period--
``(i) total gross spending by the plan,
before rebates, fees, alternative discounts, or
other remuneration;
``(ii) the number of participants and
beneficiaries who filled a prescription for a
drug in that class;
``(iii) if applicable to that class, a
description of the formulary tiers and
utilization management mechanisms (such as
prior authorization or step therapy) employed
for drugs in that class;
``(iv) the total out-of-pocket spending by
participants and beneficiaries, including
participant and beneficiary spending through
copayments, coinsurance, and deductibles; and
``(v) for each therapeutic class under
which 3 or more drugs are included on the
formulary of such plan--
``(I) the amount received, or
expected to be received, by such
entity, from an applicable entity, in
rebates, fees, alternative discounts,
or other remuneration that--
``(aa) has been paid, or
will be paid, by such an
applicable entity for claims
incurred during the reporting
period; or
``(bb) is related to
utilization of drugs or drug
spending;
``(II) the total net spending by
the health plan on that class of drugs;
and
``(III) the net price per typical
course of treatment or 30-day supply
incurred by the health plan and its
participants and beneficiaries, after
rebates, fees, alternative discounts,
or other remuneration provided by an
applicable entity, for drugs dispensed
within such therapeutic class during
the reporting period;
``(D) total gross spending on prescription drugs by
the plan during the reporting period, before rebates,
fees, alternative discounts, or other remuneration
provided by an applicable entity;
``(E) the total amount received, or expected to be
received, by the health plan, from an applicable
entity, in rebates, fees, alternative discounts, and
other remuneration received from any such entities,
related to utilization of drug or drug spending under
that health plan during the reporting period;
``(F) the total net spending on prescription drugs
by the health plan during the reporting period;
``(G) amounts paid directly or indirectly in
rebates, fees, or any other type of compensation (as
defined in section 408(b)(2)(B)(ii)(dd)(AA)) to
brokers, consultants, advisors, or any other individual
or firm who referred the group health plan's business
to the pharmacy benefit manager; and
``(H) a summary document that includes such
information described in subparagraphs (A) through (G)
as the Secretary determines useful for plan sponsors
for purposes of selecting pharmacy benefit management
services, such as an estimated net price to plan
sponsor and participant or beneficiary, a cost per
claim, the fee structure or reimbursement model, and
estimated cost per participant or beneficiary.
``(2) Supplementary reporting for intra-company
prescription drug transactions.--
``(A) In general.--A health insurance issuer
offering covered group health insurance coverage or an
entity providing pharmacy benefit management services
under a covered group health plan or covered group
health insurance coverage shall submit, together with
the report under paragraph (1), a supplementary report
every 6 months to the plan sponsor that includes--
``(i) an explanation of any benefit design
parameters that encourage or require
participants and beneficiaries in the plan or
coverage to fill prescriptions at mail order,
specialty, or retail pharmacies that are wholly
or partially-owned by that issuer or entity
providing pharmacy benefit management services
under such plan or coverage, including
mandatory mail and specialty home delivery
programs, retail and mail auto-refill programs,
and copayment incentives funded by an entity
providing pharmacy benefit management services;
``(ii) the percentage of total
prescriptions charged to the plan, coverage, or
participants and beneficiaries in the plan or
coverage, that were dispensed by mail order,
specialty, or retail pharmacies that are wholly
or partially-owned by the issuer or entity
providing pharmacy benefit management services;
and
``(iii) a list of all drugs dispensed by
such wholly or partially-owned pharmacy and
charged to the plan or coverage, or
participants and beneficiaries of the plan or
coverage, during the applicable quarter, and,
with respect to each drug--
``(I) the amounts charged, per
dosage unit, per course of treatment,
per 30-day supply, and per 90-day
supply, with respect to participants
and beneficiaries in the plan or
coverage, including amounts charged to
the plan or coverage and amounts
charged to the participants and
beneficiaries;
``(II) the median amount charged to
the plan or coverage, per dosage unit,
per course of treatment, per 30-day
supply, and per 90-day supply,
including amounts paid by the
participants and beneficiaries, when
the same drug is dispensed by other
pharmacies that are not wholly or
partially-owned by the issuer or entity
and that are included in the pharmacy
network of that plan or coverage;
``(III) the interquartile range of
the costs, per dosage unit, per course
of treatment, per 30-day supply, and
per 90-day supply, including amounts
paid by the participants and
beneficiaries, when the same drug is
dispensed by other pharmacies that are
not wholly or partially-owned by the
issuer or entity and that are included
in the pharmacy network of that plan or
coverage;
``(IV) the lowest cost, per dosage
unit, per course of treatment, per 30-
day supply, and per 90-day supply, for
such drug, including amounts charged to
the plan or issuer and participants and
beneficiaries, that is available from
any pharmacy included in the network of
the plan or coverage;
``(V) the net acquisition cost per
dosage unit and for a 30 day-supply,
and the acquisition cost per typical
course of treatment, if the drug is
subject to a maximum price discount;
and
``(VI) other information with
respect to the cost of the drug, as
determined by the Secretary, such as
average sales price, wholesale
acquisition cost, and national average
drug acquisition cost per dosage unit,
per typical course of treatment, or per
30-day supply, for such drug, including
amounts charged to the plan or issuer
and participants and beneficiaries
among all pharmacies included in the
network of the plan or coverage.
``(B) Plans and coverage offered by small
employers.--A health insurance issuer offering covered
group health insurance coverage that is not covered
group health insurance coverage or an entity providing
pharmacy benefit management services under a group
health plan that is not a covered group health plan or
under group health insurance coverage that is not
covered group health insurance coverage that conducts
transactions with a wholly or partially-owned pharmacy
shall submit, together with the report under paragraph
(1), a supplementary report every 6 months to the plan
sponsor that includes the information described in
clauses (i) and (ii) of subparagraph (A).
``(3) Privacy requirements.--
``(A) Relationship to hipaa regulations.--Nothing
in this section shall be construed to modify the
requirements for the creation, receipt, maintenance, or
transmission of protected health information under the
privacy, security, breach notification, and enforcement
regulations in parts 160 and 164 of title 45, Code of
Federal Regulations (or successor regulations).
``(B) Requirement.--A report submitted under
paragraph (1) or (2) shall contain only summary health
information, as defined in section 164.504(a) of title
45, Code of Federal Regulations (or successor
regulations).
``(C) Clarification regarding certain disclosures
of information.--
``(i) Reasonable restrictions.--Nothing in
this section prevents a health insurance issuer
offering group health insurance coverage or an
entity providing pharmacy benefit management
services on behalf of a group health plan or
group health insurance coverage from placing
reasonable restrictions on the public
disclosure of the information contained in a
report under paragraph (1) or (2).
``(ii) Limitations.--A health insurance
issuer offering group health insurance coverage
or an entity providing pharmacy benefit
management services on behalf of a group health
plan or group health insurance coverage may not
restrict disclosure of such reports to the
Department of Health and Human Services, the
Department of Labor, the Department of the
Treasury, or any other Federal agency
responsible for enforcement activities under
this section for purposes of enforcement under
this section or other applicable law, or to the
Comptroller General of the United States in
accordance with paragraph (6).
``(4) Use and disclosure by plan sponsors.--
``(A) Prohibition.--A plan sponsor may not--
``(i) fail or refuse to hire, or discharge,
any employee, or otherwise discriminate against
any employee with respect to the compensation,
terms, conditions, or privileges of employment
of the employee, because of information
submitted under paragraph (1) or (2) attributed
to the employee or a dependent of the employee;
or
``(ii) limit, segregate, or classify the
employees of the employer in any way that would
deprive or tend to deprive any employee of
employment opportunities or otherwise adversely
affect the status of the employee as an
employee, because of information submitted
under paragraph (1) or (2) attributed to the
employee or a dependent of the employee.
``(B) Disclosure and redisclosure.--A plan sponsor
shall not disclose the information received under
paragraph (1) or (2) except--
``(i) to an occupational or other health
researcher if the research is conducted in
compliance with the regulations and protections
provided for under part 46 of title 45, Code of
Federal Regulations (or successor regulations);
``(ii) in response to an order of a court,
except that the plan sponsor may disclose only
the information expressly authorized by such
order;
``(iii) to the Department of Health and
Human Services, the Department of Labor, the
Department of the Treasury, or other Federal
agency responsible for enforcement activities
under this section; or
``(iv) to a contractor or agent for
purposes of health plan administration, if such
contractor or agent agrees, in writing, to
abide by the same use and disclosure
restrictions as the plan sponsor.
``(C) Relationship to hipaa regulations.--With
respect to the regulations promulgated by the Secretary
of Health and Human Services under part C of title XI
of the Social Security Act (42 U.S.C. 1320d et seq.)
and section 264 of the Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. 1320d-2),
subparagraph (B) does not prohibit a covered entity (as
defined for purposes of such regulations) from any use
or disclosure of health information that is authorized
for the covered entity under such regulations. The
previous sentence does not affect the authority of such
Secretary to modify such regulations.
``(D) Enforcement.--
``(i) In general.--The powers, procedures,
and remedies provided in section 207 of the
Genetic Information Nondiscrimination Act (42
U.S.C. 2000ff-6) to a person alleging a
violation of title II of such Act shall be the
powers, procedures, and remedies this
subparagraph provides for any person alleging a
violation of this paragraph.
``(ii) Prohibition against retaliation.--No
person shall discriminate against any
individual because such individual has opposed
any act or practice made unlawful by this
paragraph or because such individual made a
charge, testified, assisted, or participated in
any manner in an investigation, proceeding, or
hearing under this paragraph. The remedies and
procedures otherwise provided for under this
subparagraph shall be available to aggrieved
individuals with respect to violations of this
clause.
``(5) Additional reporting.--
``(A) Reporting with respect to group health plans
offered by small employers.--For plan years beginning
on or after January 1, 2025, not less frequently than
annually, an entity providing pharmacy benefit
management services on behalf of a group health plan
that is not a covered group health plan shall submit to
the plan sponsor of such group health plan a report in
accordance with this paragraph, and make such report
available to the plan sponsor in a machine-readable
format, and such other formats as the Secretary, the
Secretary of Health and Human Services, and the
Secretary of Labor may determine. Each such report
shall include, with respect to the applicable group
health plan, the information described in subparagraphs
(A), (D), (E), (F), (G), and (H) of paragraph (1).
``(B) Opt-in for group health insurance coverage.--
``(i) In general.--A plan sponsor may, on
an annual basis, beginning with plan years
beginning on or after January 1, 2025, elect to
require a health insurance issuer offering
group health insurance coverage to submit to
such plan sponsor a report in accordance with
this subsection.
``(ii) Contents of reports.--
``(I) Covered group health
insurance coverage.--In the case of an
issuer that offers covered group health
insurance coverage, a report provided
pursuant to clause (i) shall include,
with respect to the applicable covered
group health insurance coverage, the
information required under paragraph
(1) for covered group health plans.
``(II) Other group health insurance
coverage.--In the case of an issuer
that offers group health insurance
coverage that is not covered group
health insurance, a report provided
pursuant to clause (i) shall include,
with respect to the applicable group
health insurance coverage, the
information described in subparagraphs
(A), (D), (E), (F), and (G) of
paragraph (1).
``(iii) Application.--For purposes of
reports submitted in accordance with this
subparagraph, paragraph (1) shall be applied by
substituting `group health insurance coverage'
or `health insurance issuer', as applicable,
for `group health plan', `group plan', and
`plan' where such terms appear in such
paragraph.
``(iv) Required reporting for all group
health insurance coverage.--Each health
insurance issuer of health insurance coverage
shall annually submit the information described
in paragraph (1)(H), regardless of whether the
plan sponsor made the election described in
clause (i) for the applicable year.
``(6) Submissions to gao.--A health insurance issuer
offering group health insurance coverage or an entity providing
pharmacy benefit management services on behalf of a group
health plan shall submit to the Comptroller General of the
United States each of the first 2 reports submitted to a plan
sponsor under paragraph (1) or (5) with respect to such
coverage or plan, and other such reports as requested, in
accordance with the privacy requirements under paragraph (3),
and such other information that the Comptroller General
determines necessary to carry out the study under section 2(f)
of the Pharmacy Benefit Manager Reform Act.
``(7) Standard formats.--
``(A) In general.--Not later than June 1, 2024, the
Secretary, the Secretary of Health and Human Services,
and the Secretary of the Treasury shall specify,
through rulemaking, standard formats for health
insurance issuers and entities providing pharmacy
benefit management services to submit reports required
under this subsection.
``(B) Limited form of report.--The Secretary, the
Secretary of Health and Human Services, and the
Secretary of the Treasury shall define through
rulemaking a limited form of the reports under
paragraphs (1) and (2) required to be submitted to plan
sponsors who also are drug manufacturers, drug
wholesalers, entities providing pharmacy benefit
management services, or other direct participants in
the drug supply chain, in order to prevent anti-
competitive behavior.
``(c) Limitations on Spread Pricing.--
``(1) In general.--For plan years beginning on or after
January 1, 2025, a group health plan or health insurance issuer
offering group health insurance coverage shall not charge
participants and beneficiaries, and an entity providing
pharmacy benefit management services under such a plan or
coverage shall not charge the plan, issuer, or participants and
beneficiaries, a price for a prescription drug that exceeds the
price paid to the pharmacy for such drug, excluding penalties
paid by the pharmacy (as described in paragraph (2)) to such
plan, issuer, or entity.
``(2) Rule of construction.--For purposes of paragraph (1),
penalties paid by pharmacies include only the following:
``(A) A penalty paid if an original claim for a
prescription drug was submitted fraudulently by the
pharmacy to the plan, issuer, or entity.
``(B) A penalty paid if the original claim payment
made by the plan, issuer, or entity to the pharmacy was
inconsistent with the reimbursement terms in any
contract between the pharmacy and the plan, issuer, or
entity.
``(C) A penalty paid if the pharmacist services
billed to the plan, issuer, or entity were not rendered
by the pharmacy.
``(d) Full Rebate Pass-Through to Plan.--
``(1) In general.--For plan years beginning on or after
January 1, 2025, a third-party administrator of a group health
plan, a health insurance issuer offering group health insurance
coverage, or an entity providing pharmacy benefit management
services under such health plan or health insurance coverage
shall--
``(A) remit 100 percent of rebates, fees,
alternative discounts, and other applicable
remuneration received from any applicable entity that
are related to utilization of drugs under such health
plan or health insurance coverage, to the group health
plan; and
``(B) ensure that any contract entered into by such
third-party administrator, health insurance issuer, or
entity providing pharmacy benefit management services
with an applicable entity remit 100 percent of rebates,
fees, alternative discounts, and other remuneration
received to the third-party administrator, health
insurance issuer, or entity providing pharmacy benefit
management services.
``(2) Form and manner of remittance.--Such rebates, fees,
alternative discounts, and other remuneration shall be--
``(A) remitted to the group health plan or group
health insurance coverage in a timely fashion after the
period for which such rebates, fees, alternative
discounts, or other remuneration is calculated, and in
no case later than 90 days after the end of such
period;
``(B) fully disclosed and enumerated to the group
health plan sponsor, as described in paragraphs (1) and
(4) of subsection (b);
``(C) available for audit by the plan sponsor, or a
third-party designated by a plan sponsor not less than
once per plan year; and
``(D) returned to the issuer or entity providing
pharmaceutical benefit management services by the group
health plan if audits by such issuer or entity indicate
that the amounts received are incorrect after such
amounts have been paid to the group health plan.
``(3) Audit of rebate contracts.--A third-party
administrator of a group health plan, a health insurance issuer
offering group health insurance coverage, or an entity
providing pharmacy benefit management services under such
health plan or health insurance coverage shall make rebate
contracts with rebate aggregators or drug manufacturers
available for audit by such plan sponsor or designated third-
party, subject to confidentiality agreements to prevent re-
disclosure of such contracts.
``(4) Auditors.--The applicable plan sponsor may select an
auditor for purposes of carrying out audits under paragraphs
(2)(C) and (3).
``(5) Rule of construction.--Nothing in this subsection
shall be construed to prohibit payments to entities offering
pharmacy benefit management services for bona fide services
using a fee structure not contemplated by this subsection,
provided that such fees are transparent to group health plans
and health insurance issuers.
``(e) 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) Failure to provide timely information.--A health
insurance issuer or an entity providing pharmacy benefit
management services that violates subsection (a) or fails to
provide information required under subsection (b); a group
health plan, health insurance issuer, or entity providing
pharmacy benefit management services that violates subsection
(c); or a third-party administrator of a group health plan, a
health insurance issuer offering group health insurance
coverage, or an entity providing pharmacy benefit management
services that violates subsection (d) shall be subject to a
civil monetary penalty in the amount of $10,000 for each day
during which such violation continues or such information is
not disclosed or reported.
``(3) False information.--A health insurance issuer, entity
providing pharmacy benefit management services, or drug
manufacturer that knowingly provides false information under
this section shall be subject to a civil money penalty in an
amount not to exceed $100,000 for each item of false
information. Such civil money penalty shall be in addition to
other penalties as may be prescribed by law.
``(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.
``(5) Waivers.--The Secretary may waive penalties under
paragraph (2), or extend the period of time for compliance with
a requirement of this section, for an entity in violation of
this section that has made a good-faith effort to comply with
this section.
``(f) Rule of Construction.--Nothing in this section shall be
construed to permit a health insurance issuer, group health plan, or
other entity to restrict disclosure to, or otherwise limit the access
of, the Department of Labor to a report described in subsection (b)(1)
or information related to compliance with subsection (a) by such
issuer, plan, or entity.
``(g) Definitions.--In this section--
``(1) the term `applicable entity' means--
``(A) a drug manufacturer, distributor, wholesaler,
rebate aggregator (or other purchasing entity designed
to aggregate rebates), group purchasing organization,
or associated third party;
``(B) any subsidiary, parent, affiliate, or
subcontractor of a group health plan, health insurance
issuer, entity that provides pharmacy benefit
management services on behalf of such a plan or issuer,
or any entity described in subparagraph (A); or
``(C) such other entity as the Secretary, the
Secretary of Health and Human Services, and the
Secretary of the Treasury may specify through
rulemaking;
``(2) the term `covered group health insurance coverage'
means health insurance coverage offered in connection with a
group health plan maintained by a large employer;
``(3) the term `covered group health plan' means a group
health plan maintained by a large employer;
``(4) the term `gross spending', with respect to
prescription drug benefits under a group health plan or health
insurance coverage, means the amount spent by a group health
plan or health insurance issuer on prescription drug benefits,
calculated before the application of manufacturer rebates,
fees, alternative discounts, or other remuneration;
``(5) the term `large employer' means, in connection with a
group health plan with respect to a calendar year and a plan
year, an employer who employed an average of at least 50
employees on business days during the preceding calendar year
and who employs at least 1 employee on the first day of the
plan year;
``(6) the term `net spending', with respect to prescription
drug benefits under a group health plan or health insurance
coverage, means the amount spent by a group health plan or
health insurance issuer on prescription drug benefits,
calculated after the application of manufacturer rebates, fees,
alternative discounts, or other remuneration;
``(7) the term `plan sponsor' has the meaning given such
term in section 3(16)(B);
``(8) the term `remuneration' has the meaning given such
term by the Secretary, the Secretary of Health and Human
Services, and the Secretary of the Treasury, through notice and
comment rulemaking;
``(9) the term `small employer' means, in connection with a
group health plan with respect to a calendar year and a plan
year, an employer who employed an average of at least 1 but not
more than 49 employees on business days during the preceding
calendar year and who employs at least 1 employee on the first
day of the plan year; and
``(10) the term `wholesale acquisition cost' has the
meaning given such term in section 1847A(c)(6)(B) of the Social
Security Act (42 U.S.C. 1395w-3a(c)(6)(B)).''; and
(B) in section 502(b)(3) (29 U.S.C. 1132(b)(3)), by
inserting ``(other than section 726)'' after ``part
7''.
(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. Oversight of entities that provide pharmacy benefit
management services.''.
(c) Internal Revenue Code.--
(1) In general.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following:
``SEC. 9826. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT
MANAGEMENT SERVICES.
``(a) In General.--For plan years beginning on or after January 1,
2025, a group health plan or an entity providing pharmacy benefit
management services on behalf of such a plan shall not enter into a
contract with an applicable entity that limits the disclosure of
information to plan sponsors in such a manner that prevents the plan,
or an entity providing pharmacy benefit management services on behalf
of a plan, from making the reports described in subsection (b).
``(b) Reports.--
``(1) In general.--For plan years beginning on or after
January 1, 2025, not less frequently than annually, an entity
providing pharmacy benefit management services on behalf of a
covered group health plan shall submit to the plan sponsor of
such covered group health plan a report in accordance with this
subsection and make such report available to the plan sponsor
in a machine-readable format and, as the Secretary may
determine, other formats. Each such report shall include, with
respect to the covered group health plan--
``(A) as applicable, information collected from
drug manufacturers by such entity on the total amount
of copayment assistance dollars paid, or copayment
cards applied, that were funded by the drug
manufacturer with respect to the participants and
beneficiaries in such plan;
``(B) a list of each drug covered by such plan or
entity providing pharmacy benefit management services
that was billed during the reporting period, including,
with respect to each such drug during the reporting
period--
``(i) the brand name, generic or
nonproprietary name, and National Drug Code;
``(ii) the number of participants and
beneficiaries for whom the drug was billed
during the reporting period, the total number
of prescription claims for the drug (including
original prescriptions and refills), and the
total number of dosage units of the drug
dispensed across the reporting period;
``(iii) for each claim or dosage unit
described in clause (ii), the type of
dispensing channel used, such as retail, mail
order, or specialty pharmacy;
``(iv) the wholesale acquisition cost,
listed as cost per days supply, cost per dosage
unit, and cost per typical course of treatment
(as applicable);
``(v) the total out-of-pocket spending by
participants and beneficiaries on such drug
after application of any benefits under the
plan, including participant and beneficiary
spending through copayments, coinsurance, and
deductibles, but not including any amounts
spent by participants and beneficiaries on
drugs not covered under the plan or for which
no claim is submitted to the plan; and
``(vi) for any drug for which gross
spending by the plan exceeded $10,000 and that
is one of the 50 prescription drugs for which
the group health plan spent the most on
prescription drug benefits during the reporting
period--
``(I) a list of all other drugs in
the same therapeutic class, including
brand name drugs and biological
products and generic drugs or
biosimilar biological products that are
in the same therapeutic class as such
drug; and
``(II) if applicable, the rationale
for preferred formulary placement of
such drug in that therapeutic class,
selected from a list of standard
rationales established by the
Secretary;
``(C) a list of each therapeutic class of drugs
that were dispensed under the health plan during the
reporting period, and, with respect to each such
therapeutic class of drugs, during the reporting
period--
``(i) total gross spending by the plan,
before rebates, fees, alternative discounts, or
other remuneration;
``(ii) the number of participants and
beneficiaries who filled a prescription for a
drug in that class;
``(iii) if applicable to that class, a
description of the formulary tiers and
utilization management mechanisms (such as
prior authorization or step therapy) employed
for drugs in that class;
``(iv) the total out-of-pocket spending by
participants and beneficiaries, including
participant and beneficiary spending through
copayments, coinsurance, and deductibles; and
``(v) for each therapeutic class under
which 3 or more drugs are included on the
formulary of such plan--
``(I) the amount received, or
expected to be received, by such
entity, from an applicable entity, in
rebates, fees, alternative discounts,
or other remuneration that--
``(aa) has been paid, or
will be paid, by such an
applicable entity for claims
incurred during the reporting
period; or
``(bb) is related to
utilization of drugs or drug
spending;
``(II) the total net spending by
the health plan on that class of drugs;
and
``(III) the net price per typical
course of treatment or 30-day supply
incurred by the health plan and its
participants and beneficiaries, after
rebates, fees, alternative discounts,
or other remuneration provided by an
applicable entity, for drugs dispensed
within such therapeutic class during
the reporting period;
``(D) total gross spending on prescription drugs by
the plan during the reporting period, before rebates,
fees, alternative discounts, or other remuneration
provided by an applicable entity;
``(E) the total amount received, or expected to be
received, by the health plan, from an applicable
entity, in rebates, fees, alternative discounts, and
other remuneration received from any such entities,
related to utilization of drug or drug spending under
that health plan during the reporting period;
``(F) the total net spending on prescription drugs
by the health plan during the reporting period;
``(G) amounts paid directly or indirectly in
rebates, fees, or any other type of compensation (as
defined in section 408(b)(2)(B)(ii)(dd)(AA) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1108(b)(2)(B)(ii)(dd)(A))) to brokers,
consultants, advisors, or any other individual or firm
who referred the group health plan's business to the
pharmacy benefit manager; and
``(H) a summary document that includes such
information described in subparagraphs (A) through (G)
as the Secretary determines useful for plan sponsors
for purposes of selecting pharmacy benefit management
services, such as an estimated net price to plan
sponsor and participant or beneficiary, a cost per
claim, the fee structure or reimbursement model, and
estimated cost per participant or beneficiary.
``(2) Supplementary reporting for intra-company
prescription drug transactions.--
``(A) In general.--An entity providing pharmacy
benefit management services under a covered group
health plan shall submit, together with the report
under paragraph (1), a supplementary report every 6
months to the plan sponsor that includes--
``(i) an explanation of any benefit design
parameters that encourage or require
participants and beneficiaries in the plan to
fill prescriptions at mail order, specialty, or
retail pharmacies that are wholly or partially-
owned by that entity providing pharmacy benefit
management services under such plan, including
mandatory mail and specialty home delivery
programs, retail and mail auto-refill programs,
and copayment incentives funded by an entity
providing pharmacy benefit management services;
``(ii) the percentage of total
prescriptions charged to the plan or
participants and beneficiaries in the plan,
that were dispensed by mail order, specialty,
or retail pharmacies that are wholly or
partially-owned by the entity providing
pharmacy benefit management services; and
``(iii) a list of all drugs dispensed by
such wholly or partially-owned pharmacy and
charged to the plan, or participants and
beneficiaries of the plan, during the
applicable quarter, and, with respect to each
drug--
``(I) the amounts charged, per
dosage unit, per course of treatment,
per 30-day supply, and per 90-day
supply, with respect to participants
and beneficiaries in the plan,
including amounts charged to the plan
and amounts charged to the participants
and beneficiaries;
``(II) the median amount charged to
the plan, per dosage unit, per course
of treatment, per 30-day supply, and
per 90-day supply, including amounts
paid by the participants and
beneficiaries, when the same drug is
dispensed by other pharmacies that are
not wholly or partially-owned by the
entity and that are included in the
pharmacy network of that plan;
``(III) the interquartile range of
the costs, per dosage unit, per course
of treatment, per 30-day supply, and
per 90-day supply, including amounts
paid by the participants and
beneficiaries, when the same drug is
dispensed by other pharmacies that are
not wholly or partially-owned by the
entity and that are included in the
pharmacy network of that plan;
``(IV) the lowest cost, per dosage
unit, per course of treatment, per 30-
day supply, and per 90-day supply, for
such drug, including amounts charged to
the plan and participants and
beneficiaries, that is available from
any pharmacy included in the network of
the plan;
``(V) the net acquisition cost per
dosage unit and for a 30 day-supply,
and the acquisition cost per typical
course of treatment, if the drug is
subject to a maximum price discount;
and
``(VI) other information with
respect to the cost of the drug, as
determined by the Secretary, such as
average sales price, wholesale
acquisition cost, and national average
drug acquisition cost per dosage unit,
per typical course of treatment, or per
30-day supply, for such drug, including
amounts charged to the plan and
participants and beneficiaries among
all pharmacies included in the network
of the plan.
``(B) Plans offered by small employers.--An entity
providing pharmacy benefit management services under a
group health plan that is not a covered group health
plan that conducts transactions with a wholly or
partially-owned pharmacy shall submit, together with
the report under paragraph (1), a supplementary report
every 6 months to the plan sponsor that includes the
information described in clauses (i) and (ii) of
subparagraph (A).
``(3) Privacy requirements.--
``(A) Relationship to hipaa regulations.--Nothing
in this section shall be construed to modify the
requirements for the creation, receipt, maintenance, or
transmission of protected health information under the
privacy, security, breach notification, and enforcement
regulations in parts 160 and 164 of title 45, Code of
Federal Regulations (or successor regulations).
``(B) Requirement.--A report submitted under
paragraph (1) or (2) shall contain only summary health
information, as defined in section 164.504(a) of title
45, Code of Federal Regulations (or successor
regulations).
``(C) Clarification regarding certain disclosures
of information.--
``(i) Reasonable restrictions.--Nothing in
this section prevents an entity providing
pharmacy benefit management services on behalf
of a group health plan from placing reasonable
restrictions on the public disclosure of the
information contained in a report under
paragraph (1) or (2).
``(ii) Limitations.--An entity providing
pharmacy benefit management services on behalf
of a group health plan or group health
insurance coverage may not restrict disclosure
of such reports to the Department of Health and
Human Services, the Department of Labor, the
Department of the Treasury, or any other
Federal agency responsible for enforcement
activities under this section for purposes of
enforcement under this section or other
applicable law, or to the Comptroller General
of the United States in accordance with
paragraph (6).
``(4) Use and disclosure by plan sponsors.--
``(A) Prohibition.--A plan sponsor may not--
``(i) fail or refuse to hire, or discharge,
any employee, or otherwise discriminate against
any employee with respect to the compensation,
terms, conditions, or privileges of employment
of the employee, because of information
submitted under paragraph (1) or (2) attributed
to the employee or a dependent of the employee;
or
``(ii) limit, segregate, or classify the
employees of the employer in any way that would
deprive or tend to deprive any employee of
employment opportunities or otherwise adversely
affect the status of the employee as an
employee, because of information submitted
under paragraph (1) or (2) attributed to the
employee or a dependent of the employee.
``(B) Disclosure and redisclosure.--A plan sponsor
shall not disclose the information received under
paragraph (1) or (2) except--
``(i) to an occupational or other health
researcher if the research is conducted in
compliance with the regulations and protections
provided for under part 46 of title 45, Code of
Federal Regulations (or successor regulations);
``(ii) in response to an order of a court,
except that the plan sponsor may disclose only
the information expressly authorized by such
order;
``(iii) to the Department of Health and
Human Services, the Department of Labor, the
Department of the Treasury, or other Federal
agency responsible for enforcement activities
under this section; or
``(iv) to a contractor or agent for
purposes of health plan administration, if such
contractor or agent agrees, in writing, to
abide by the same use and disclosure
restrictions as the plan sponsor.
``(C) Relationship to hipaa regulations.--With
respect to the regulations promulgated by the Secretary
of Health and Human Services under part C of title XI
of the Social Security Act (42 U.S.C. 1320d et seq.)
and section 264 of the Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. 1320d-2),
subparagraph (B) does not prohibit a covered entity (as
defined for purposes of such regulations) from any use
or disclosure of health information that is authorized
for the covered entity under such regulations. The
previous sentence does not affect the authority of such
Secretary to modify such regulations.
``(D) Enforcement.--
``(i) In general.--The powers, procedures,
and remedies provided in section 207 of the
Genetic Information Nondiscrimination Act (42
U.S.C. 2000ff-6) to a person alleging a
violation of title II of such Act shall be the
powers, procedures, and remedies this
subparagraph provides for any person alleging a
violation of this paragraph.
``(ii) Prohibition against retaliation.--No
person shall discriminate against any
individual because such individual has opposed
any act or practice made unlawful by this
paragraph or because such individual made a
charge, testified, assisted, or participated in
any manner in an investigation, proceeding, or
hearing under this paragraph. The remedies and
procedures otherwise provided for under this
subparagraph shall be available to aggrieved
individuals with respect to violations of this
clause.
``(5) Reporting with respect to group health plans offered
by small employers.--For plan years beginning on or after
January 1, 2025, not less frequently than annually, an entity
providing pharmacy benefit management services on behalf of a
group health plan that is not a covered group health plan shall
submit to the plan sponsor of such group health plan a report
in accordance with this paragraph, and make such report
available to the plan sponsor in a machine-readable format.
Each such report shall include, with respect to the applicable
group health plan, the information described in subparagraphs
(A), (D), (E), (F), (G), and (H) of paragraph (1).
``(6) Submissions to gao.--An entity providing pharmacy
benefit management services on behalf of a group health plan
shall submit to the Comptroller General of the United States
each of the first 2 reports submitted to a plan sponsor under
paragraph (1) or (5) with respect to such plan, and other such
reports as requested, in accordance with the privacy
requirements under paragraph (3), and such other information
that the Comptroller General determines necessary to carry out
the study under section 2(f) of the Pharmacy Benefit Manager
Reform Act.
``(7) Standard formats.--
``(A) In general.--Not later than June 1, 2024, the
Secretary, the Secretary of Health and Human Services,
and the Secretary of Labor shall specify, through
rulemaking, standard formats for health insurance
issuers and entities providing pharmacy benefit
management services to submit reports required under
this subsection.
``(B) Limited form of report.--The Secretary, the
Secretary of Health and Human Services, and the
Secretary of Labor shall define through rulemaking a
limited form of the reports under paragraphs (1) and
(2) required to be submitted to plan sponsors who also
are drug manufacturers, drug wholesalers, entities
providing pharmacy benefit management services, or
other direct participants in the drug supply chain, in
order to prevent anti-competitive behavior.
``(c) Limitations on Spread Pricing.--
``(1) In general.--A group health plan shall not charge
participants and beneficiaries, and an entity providing
pharmacy benefit management services under such a plan shall
not charge the plan or participants and beneficiaries, a price
for a prescription drug that exceeds the price paid to the
pharmacy for such drug, excluding penalties paid by the
pharmacy (as described in paragraph (2)) to such plan or
entity.
``(2) Rule of construction.--For purposes of paragraph (1),
penalties paid by pharmacies include only the following:
``(A) A penalty paid if an original claim for a
prescription drug was submitted fraudulently by the
pharmacy to the plan or entity.
``(B) A penalty paid if the original claim payment
made by the plan, issuer, or entity to the pharmacy was
inconsistent with the reimbursement terms in any
contract between the pharmacy and the plan or entity.
``(C) A penalty paid if the pharmacist services
billed to the plan or entity were not rendered by the
pharmacy.
``(d) Full Rebate Pass-Through to Plan.--
``(1) In general.--For plan years beginning on or after
January 1, 2025, a third-party administrator of a group health
plan or an entity providing pharmacy benefit management
services under such health plan shall--
``(A) remit 100 percent of rebates, fees,
alternative discounts, and other remuneration received
from any applicable entity that are related to
utilization of drugs under such health plan, to the
group health plan; and
``(B) ensure that any contract entered into by such
third-party administrator or entity providing pharmacy
benefit management services with an applicable entity
remit 100 percent of rebates, fees, alternative
discounts, and other remuneration received to the
third-party administrator or entity providing pharmacy
benefit management services.
``(2) Form and manner of remittance.--Such rebates, fees,
alternative discounts, and other remuneration shall be--
``(A) remitted to the group health plan in a timely
fashion after the period for which such rebates, fees,
alternative discounts, or other remuneration is
calculated, and in no case later than 90 days after the
end of such period;
``(B) fully disclosed and enumerated to the group
health plan sponsor, as described in paragraphs (1) and
(4) of subsection (b);
``(C) available for audit by the plan sponsor, or a
third-party designated by a plan sponsor not less than
once per plan year; and
``(D) returned to the issuer or entity providing
pharmaceutical benefit management services by the group
health plan if audits by such entity indicate that the
amounts received are incorrect after such amounts have
been paid to the group health plan.
``(3) Audit of rebate contracts.--A third-party
administrator of a group health plan or an entity providing
pharmacy benefit management services under such health plan
shall make rebate contracts with rebate aggregators or drug
manufacturers available for audit by such plan sponsor or
designated third-party, subject to confidentiality agreements
to prevent re-disclosure of such contracts.
``(4) Auditors.--The applicable plan sponsor may select an
auditor for purposes of carrying out audits under paragraphs
(2)(C) and (3).
``(5) Rule of construction.--Nothing in this subsection
shall be construed to prohibit payments to entities offering
pharmacy benefit management services for bona fide services
using a fee structure not contemplated by this subsection,
provided that such fees are transparent to group health plans.
``(e) 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) Failure to provide timely information.--A health
insurance issuer or an entity providing pharmacy benefit
management services that violates subsection (a) or fails to
provide information required under subsection (b); a group
health plan or entity providing pharmacy benefit management
services that violates subsection (c); or a third-party
administrator of a group health plan or an entity providing
pharmacy benefit management services that violates subsection
(d) shall be subject to a civil monetary penalty in the amount
of $10,000 for each day during which such violation continues
or such information is not disclosed or reported.
``(3) False information.--An entity providing pharmacy
benefit management services, or drug manufacturer that
knowingly provides false information under this section shall
be subject to a civil money penalty in an amount not to exceed
$100,000 for each item of false information. Such civil money
penalty shall be in addition to other penalties as may be
prescribed by law.
``(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.
``(5) Waivers.--The Secretary may waive penalties under
paragraph (2), or extend the period of time for compliance with
a requirement of this section, for an entity in violation of
this section that has made a good-faith effort to comply with
this section.
``(f) Rule of Construction.--Nothing in this section shall be
construed to permit a group health plan or other entity to restrict
disclosure to, or otherwise limit the access of, the Department of the
Treasury to a report described in subsection (b)(1) or information
related to compliance with subsection (a) by such plan or entity.
``(g) Definitions.--In this section--
``(1) the term `applicable entity' means--
``(A) a drug manufacturer, distributor, wholesaler,
rebate aggregator (or other purchasing entity designed
to aggregate rebates), group purchasing organization,
or associated third party;
``(B) any subsidiary, parent, affiliate, or
subcontractor of a group health plan, health insurance
issuer, entity that provides pharmacy benefit
management services on behalf of such a plan or issuer,
or any entity described in subparagraph (A); or
``(C) such other entity as the Secretary, the
Secretary of Health and Human Services, and the
Secretary of Labor may specify through rulemaking;
``(2) the term `covered group health insurance coverage'
means health insurance coverage offered in connection with a
group health plan maintained by a large employer;
``(3) the term `covered group health plan' means a group
health plan maintained by a large employer;
``(4) the term `gross spending', with respect to
prescription drug benefits under a group health plan or health
insurance coverage, means the amount spent by a group health
plan or health insurance issuer on prescription drug benefits,
calculated before the application of manufacturer rebates,
fees, alternative discounts, or other remuneration;
``(5) the term `large employer' means, in connection with a
group health plan with respect to a calendar year and a plan
year, an employer who employed an average of at least 50
employees on business days during the preceding calendar year
and who employs at least 1 employee on the first day of the
plan year;
``(6) the term `net spending', with respect to prescription
drug benefits under a group health plan or health insurance
coverage, means the amount spent by a group health plan or
health insurance issuer on prescription drug benefits,
calculated after the application of manufacturer rebates, fees,
alternative discounts, or other remuneration;
``(7) the term `plan sponsor' has the meaning given such
term in section 3(16)(B) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002(16)(B));
``(8) the term `remuneration' has the meaning given such
term by the Secretary, the Secretary of Labor, and the
Secretary of Health and Human Services, through notice and
comment rulemaking;
``(9) the term `small employer' means, in connection with a
group health plan with respect to a calendar year and a plan
year, an employer who employed an average of at least 1 but not
more than 49 employees on business days during the preceding
calendar year and who employs at least 1 employee on the first
day of the plan year; and
``(10) the term `wholesale acquisition cost' has the
meaning given such term in section 1847A(c)(6)(B) of the Social
Security Act (42 U.S.C. 1395w-3a(c)(6)(B)).''.
(2) Clerical amendment.--The table of sections for
subchapter B of chapter 100 of the Internal Revenue Code of
1986 is amended by adding at the end the following new item:
``Sec. 9826. Oversight of entities that provide pharmacy benefit
management services.''.
(d) Funding.--
(1) For purposes of carrying out the amendments made by
subsection (a), there are appropriated to the Centers for
Medicare & Medicaid Services, out of amounts in the Treasury
not otherwise appropriated, $80,000,000 for fiscal year 2024.
(2) For purposes of carrying out the amendments made by
subsection (b), there are appropriated to the Department of
Labor, out of amounts in the Treasury not otherwise
appropriated, $43,750,000 for fiscal year 2024.
(e) ASPE Study.--The Assistant Secretary for Planning and
Evaluation of the Department of Health and Human Services shall conduct
or commission a study on how the United States health care market would
be impacted by potential regulatory changes disallowing manufacturer
rebates in the manner and to the extent allowed on the date of
enactment of this Act, with a focus on the impact to stakeholders in
the commercial insurance market, and, not later than 1 year after the
date of enactment of this Act, submit a report to Congress on the
results of such study. Such study and report shall consider the
following:
(1) The impact on the impact of making no such regulatory
changes, as well as potential behavioral changes by plan
sponsors, members, and pharmaceutical manufacturers, such as
tighter formularies, changes to price concessions, changes in
utilization, if such regulatory changes are made.
(2) The mechanics needed in the pharmaceutical supply chain
(whether existing or not) to move a manufacturer rebate to the
point of sale.
(3) The feasibility of a partial point-of-sale manufacturer
rebate versus a full point-of-sale manufacturer rebate.
(4) The impact on patient out-of-pocket costs, premiums,
and other cost-sharing.
(5) Possible behavioral changes by other third parties in
the pharmaceutical supply chain including drug manufacturer,
distributor, wholesaler, rebate aggregators, pharmacy services
administrative organizations, or group purchasing
organizations.
(6) Behavioral changes between entities that contract with
pharmaceutical manufacturers and pharmaceutical supply chain.
(7) Alternative price negotiation mechanisms, including the
impact of the Act of June 19, 1936 (commonly known as the
``Robinson-Patman Act''; 49 Stat. 1526, chapter 592; 15 U.S.C.
13a et seq.), and the amendments made by that Act, on drug
pricing negotiations.
(8) The impact on pharmacies, including pharmacy rebates,
pharmacy fees, and dispensing channels.
(f) GAO Study.--
(1) In general.--Not later than January 1, 2029, the
Comptroller General of the United States shall report to
Congress on--
(A) pharmacy networks of group health plans, health
insurance issuers, and entities providing pharmacy
benefit management services under such group health
plan or group or individual health insurance coverage,
including networks that have pharmacies that are under
common ownership (in whole or part) with group health
plans, health insurance issuers, or entities providing
pharmacy benefit management services or pharmacy
benefit administrative services under group health plan
or group or individual health insurance coverage;
(B) as it relates to pharmacy networks that include
pharmacies under common ownership described in
subparagraph (A)--
(i) whether such networks are designed to
encourage participants and beneficiaries of a
plan or coverage to use such pharmacies over
other network pharmacies for specific services
or drugs, and if so, the reasons the networks
give for encouraging use of such pharmacies;
and
(ii) whether such pharmacies are used by
participants and beneficiaries
disproportionately more in the aggregate or for
specific services or drugs compared to other
network pharmacies;
(C) whether group health plans and health insurance
issuers offering group or individual health insurance
coverage have options to elect different network
pricing arrangements in the marketplace with entities
that provide pharmacy benefit management services, the
prevalence of electing such different network pricing
arrangements;
(D) pharmacy network design parameters that
encourage participants and beneficiaries in the plan or
coverage to fill prescriptions at mail order,
specialty, or retail pharmacies that are wholly or
partially-owned by that issuer or entity; and
(E) the degree to which mail order, specialty, or
retail pharmacies that dispense prescription drugs to
participants and beneficiaries in a group health plan
or health insurance coverage that are under common
ownership (in whole or part) with group health plans,
health insurance issuers, or entities providing
pharmacy benefit management services or pharmacy
benefit administrative services under group health plan
or group or individual health insurance coverage
receive reimbursement that is greater than the median
price charged to the group health plan or health
insurance issuer when the same drug is dispensed to
participants and beneficiaries in the plan or coverage
by other pharmacies included in the pharmacy network of
that plan, issuer, or entity that are not wholly or
partially owned by the health insurance issuer or
entity providing pharmacy benefit management services.
(2) Requirement.--In carrying out paragraph (1), the
Comptroller General of the United States shall not disclose--
(A) information that would allow for identification
of a specific individual, plan sponsor, health
insurance issuer, plan, or entity providing pharmacy
benefit management services; or
(B) commercial or financial information that is
privileged or confidential.
(3) Definitions.--In this subsection, the terms ``group
health plan'', ``health insurance coverage'', and ``health
insurance issuer'' have the meanings given such terms in
section 2791 of the Public Health Service Act (42 U.S.C. 300gg-
91).
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