[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1339 Reported in Senate (RS)]
<DOC>
Calendar No. 113
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, Mr. Marshall, and
Mr. Braun) introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions
June 22, 2023
Reported by Mr. Sanders, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
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,
<DELETED>SECTION 1. SHORT TITLE.</DELETED>
<DELETED> This Act may be cited as the ``Pharmacy Benefit Manager
Reform Act''.</DELETED>
<DELETED>SEC. 2. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT
MANAGEMENT SERVICES.</DELETED>
<DELETED> (a) PHSA.--Title XXVII of the Public Health Service Act
(42 U.S.C. 300gg et seq.) is amended--</DELETED>
<DELETED> (1) in part D (42 U.S.C. 300gg-111 et seq.), by
adding at the end the following new section:</DELETED>
<DELETED>``SEC. 2799A-11. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY
BENEFIT MANAGEMENT SERVICES.</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(b) Reports.--</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(i) the brand name, generic or
nonproprietary name, and National Drug
Code;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(iv) the wholesale acquisition
cost, listed as cost per days supply, cost per
dosage unit, and cost per typical course of
treatment (as applicable);</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(i) total gross spending by the
plan, before rebates, fees, alternative
discounts, or other remuneration;</DELETED>
<DELETED> ``(ii) the number of participants
and beneficiaries who filled a prescription for
a drug in that class;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(iv) the total out-of-pocket
spending by participants and beneficiaries,
including participant and beneficiary spending
through copayments, coinsurance, and
deductibles; and</DELETED>
<DELETED> ``(v) for each therapeutic class
under which 3 or more drugs are included on the
formulary of such plan--</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(aa) has been
paid, or will be paid, by such
an applicable entity for claims
incurred during the reporting
period; or</DELETED>
<DELETED> ``(bb) is related
to utilization of drugs or drug
spending;</DELETED>
<DELETED> ``(II) the total net
spending by the health plan on that
class of drugs; and</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(F) the total net spending on
prescription drugs by the health plan during the
reporting period;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(2) Supplementary reporting for intra-company
prescription drug transactions.--</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(3) Privacy requirements.--</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(C) Clarification regarding certain
disclosures of information.--</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(4) Use and disclosure by plan sponsors.--
</DELETED>
<DELETED> ``(A) Prohibition.--A plan sponsor may
not--</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(B) Disclosure and redisclosure.--A plan
sponsor shall not disclose the information received
under paragraph (1) or (2) except--</DELETED>
<DELETED> ``(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);</DELETED>
<DELETED> ``(ii) in response to an order of
a court, except that the plan sponsor may
disclose only the information expressly
authorized by such order;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(D) Enforcement.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(5) Additional reporting.--</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(B) Opt-in for group health insurance
coverage.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(ii) Contents of reports.--
</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(7) Standard formats.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(c) Limitations on Spread Pricing.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(2) Rule of construction.--For purposes of
paragraph (1), penalties paid by pharmacies include only the
following:</DELETED>
<DELETED> ``(A) A penalty paid if an original claim
for a prescription drug was submitted fraudulently by
the pharmacy to the plan, issuer, or entity.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(C) A penalty paid if the pharmacist
services billed to the plan, issuer, or entity were not
rendered by the pharmacy.</DELETED>
<DELETED> ``(d) Full Rebate Pass-Through to Plan.--</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(2) Form and manner of remittance.--Such
rebates, fees, alternative discounts, and other remuneration
shall be--</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(B) fully disclosed and enumerated to
the group health plan sponsor, as described in
paragraphs (1) and (4) of subsection (b);</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(4) Auditors.--The applicable plan sponsor may
select an auditor for purposes of carrying out audits under
paragraphs (2)(C) and (3).</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(e) Enforcement.--</DELETED>
<DELETED> ``(1) In general.--The Secretary, in consultation
with the Secretary of Labor and the Secretary of the Treasury,
shall enforce this section.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(g) Definitions.--In this section--</DELETED>
<DELETED> ``(1) the term `applicable entity' means--
</DELETED>
<DELETED> ``(A) a drug manufacturer, distributor,
wholesaler, rebate aggregator (or other purchasing
entity designed to aggregate rebates), group purchasing
organization, or associated third party;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(C) such other entity as the Secretary,
the Secretary of Labor, and the Secretary of the
Treasury may specify through rulemaking;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(3) the term `covered group health plan' means a
group health plan maintained by a large employer;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(10) the term `wholesale acquisition cost' has
the meaning given such term in section 1847A(c)(6)(B) of the
Social Security Act.''; and</DELETED>
<DELETED> (2) in section 2723 (42 U.S.C. 300gg-22)--
</DELETED>
<DELETED> (A) in subsection (a)--</DELETED>
<DELETED> (i) in paragraph (1), by inserting
``(other than section 2799A-11)'' after ``part
D''; and</DELETED>
<DELETED> (ii) in paragraph (2), by
inserting ``(other than section 2799A-11)''
after ``part D'';</DELETED>
<DELETED> (B) in subsection (b)--</DELETED>
<DELETED> (i) in paragraph (1), by inserting
``(other than section 2799A-11)'' after ``part
D'';</DELETED>
<DELETED> (ii) in paragraph (2)(A), by
inserting ``(other than section 2799A-11)''
after ``part D''; and</DELETED>
<DELETED> (iii) in paragraph (2)(C)(ii), by
inserting ``(other than section 2799A-11)''
after ``part D''.</DELETED>
<DELETED> (b) ERISA.--</DELETED>
<DELETED> (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--</DELETED>
<DELETED> (A) in subpart B of part 7 (29 U.S.C. 1185
et seq.), by adding at the end the following:</DELETED>
<DELETED>``SEC. 726. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY
BENEFIT MANAGEMENT SERVICES.</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(b) Reports.--</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(i) the brand name, generic or
nonproprietary name, and National Drug
Code;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(iv) the wholesale acquisition
cost, listed as cost per days supply, cost per
dosage unit, and cost per typical course of
treatment (as applicable);</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(i) total gross spending by the
plan, before rebates, fees, alternative
discounts, or other remuneration;</DELETED>
<DELETED> ``(ii) the number of participants
and beneficiaries who filled a prescription for
a drug in that class;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(iv) the total out-of-pocket
spending by participants and beneficiaries,
including participant and beneficiary spending
through copayments, coinsurance, and
deductibles; and</DELETED>
<DELETED> ``(v) for each therapeutic class
under which 3 or more drugs are included on the
formulary of such plan--</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(aa) has been
paid, or will be paid, by such
an applicable entity for claims
incurred during the reporting
period; or</DELETED>
<DELETED> ``(bb) is related
to utilization of drugs or drug
spending;</DELETED>
<DELETED> ``(II) the total net
spending by the health plan on that
class of drugs; and</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(F) the total net spending on
prescription drugs by the health plan during the
reporting period;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(2) Supplementary reporting for intra-company
prescription drug transactions.--</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(3) Privacy requirements.--</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(C) Clarification regarding certain
disclosures of information.--</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(4) Use and disclosure by plan sponsors.--
</DELETED>
<DELETED> ``(A) Prohibition.--A plan sponsor may
not--</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(B) Disclosure and redisclosure.--A plan
sponsor shall not disclose the information received
under paragraph (1) or (2) except--</DELETED>
<DELETED> ``(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);</DELETED>
<DELETED> ``(ii) in response to an order of
a court, except that the plan sponsor may
disclose only the information expressly
authorized by such order;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(D) Enforcement.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(5) Additional reporting.--</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(B) Opt-in for group health insurance
coverage.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(ii) Contents of reports.--
</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(7) Standard formats.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(c) Limitations on Spread Pricing.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(2) Rule of construction.--For purposes of
paragraph (1), penalties paid by pharmacies include only the
following:</DELETED>
<DELETED> ``(A) A penalty paid if an original claim
for a prescription drug was submitted fraudulently by
the pharmacy to the plan, issuer, or entity.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(C) A penalty paid if the pharmacist
services billed to the plan, issuer, or entity were not
rendered by the pharmacy.</DELETED>
<DELETED> ``(d) Full Rebate Pass-Through to Plan.--</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(2) Form and manner of remittance.--Such
rebates, fees, alternative discounts, and other remuneration
shall be--</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(B) fully disclosed and enumerated to
the group health plan sponsor, as described in
paragraphs (1) and (4) of subsection (b);</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(4) Auditors.--The applicable plan sponsor may
select an auditor for purposes of carrying out audits under
paragraphs (2)(C) and (3).</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(e) Enforcement.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(g) Definitions.--In this section--</DELETED>
<DELETED> ``(1) the term `applicable entity' means--
</DELETED>
<DELETED> ``(A) a drug manufacturer, distributor,
wholesaler, rebate aggregator (or other purchasing
entity designed to aggregate rebates), group purchasing
organization, or associated third party;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(C) such other entity as the Secretary,
the Secretary of Health and Human Services, and the
Secretary of the Treasury may specify through
rulemaking;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(3) the term `covered group health plan' means a
group health plan maintained by a large employer;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(7) the term `plan sponsor' has the meaning
given such term in section 3(16)(B);</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> (B) in section 502(b)(3) (29 U.S.C.
1132(b)(3)), by inserting ``(other than section 726)''
after ``part 7''.</DELETED>
<DELETED> (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:</DELETED>
<DELETED>``Sec. 726. Oversight of entities that provide pharmacy
benefit management services.''.
<DELETED> (c) Internal Revenue Code.--</DELETED>
<DELETED> (1) In general.--Subchapter B of chapter 100 of
the Internal Revenue Code of 1986 is amended by adding at the
end the following:</DELETED>
<DELETED>``SEC. 9826. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY
BENEFIT MANAGEMENT SERVICES.</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(b) Reports.--</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(i) the brand name, generic or
nonproprietary name, and National Drug
Code;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(iv) the wholesale acquisition
cost, listed as cost per days supply, cost per
dosage unit, and cost per typical course of
treatment (as applicable);</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(i) total gross spending by the
plan, before rebates, fees, alternative
discounts, or other remuneration;</DELETED>
<DELETED> ``(ii) the number of participants
and beneficiaries who filled a prescription for
a drug in that class;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(iv) the total out-of-pocket
spending by participants and beneficiaries,
including participant and beneficiary spending
through copayments, coinsurance, and
deductibles; and</DELETED>
<DELETED> ``(v) for each therapeutic class
under which 3 or more drugs are included on the
formulary of such plan--</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(aa) has been
paid, or will be paid, by such
an applicable entity for claims
incurred during the reporting
period; or</DELETED>
<DELETED> ``(bb) is related
to utilization of drugs or drug
spending;</DELETED>
<DELETED> ``(II) the total net
spending by the health plan on that
class of drugs; and</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(F) the total net spending on
prescription drugs by the health plan during the
reporting period;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(2) Supplementary reporting for intra-company
prescription drug transactions.--</DELETED>
<DELETED> ``(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--
</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(3) Privacy requirements.--</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(C) Clarification regarding certain
disclosures of information.--</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(4) Use and disclosure by plan sponsors.--
</DELETED>
<DELETED> ``(A) Prohibition.--A plan sponsor may
not--</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(B) Disclosure and redisclosure.--A plan
sponsor shall not disclose the information received
under paragraph (1) or (2) except--</DELETED>
<DELETED> ``(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);</DELETED>
<DELETED> ``(ii) in response to an order of
a court, except that the plan sponsor may
disclose only the information expressly
authorized by such order;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(D) Enforcement.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(7) Standard formats.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(c) Limitations on Spread Pricing.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(2) Rule of construction.--For purposes of
paragraph (1), penalties paid by pharmacies include only the
following:</DELETED>
<DELETED> ``(A) A penalty paid if an original claim
for a prescription drug was submitted fraudulently by
the pharmacy to the plan or entity.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(C) A penalty paid if the pharmacist
services billed to the plan or entity were not rendered
by the pharmacy.</DELETED>
<DELETED> ``(d) Full Rebate Pass-Through to Plan.--</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(2) Form and manner of remittance.--Such
rebates, fees, alternative discounts, and other remuneration
shall be--</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(B) fully disclosed and enumerated to
the group health plan sponsor, as described in
paragraphs (1) and (4) of subsection (b);</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(4) Auditors.--The applicable plan sponsor may
select an auditor for purposes of carrying out audits under
paragraphs (2)(C) and (3).</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(e) Enforcement.--</DELETED>
<DELETED> ``(1) In general.--The Secretary, in consultation
with the Secretary of Labor and the Secretary of Health and
Human Services, shall enforce this section.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(g) Definitions.--In this section--</DELETED>
<DELETED> ``(1) the term `applicable entity' means--
</DELETED>
<DELETED> ``(A) a drug manufacturer, distributor,
wholesaler, rebate aggregator (or other purchasing
entity designed to aggregate rebates), group purchasing
organization, or associated third party;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(C) such other entity as the Secretary,
the Secretary of Health and Human Services, and the
Secretary of Labor may specify through
rulemaking;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(3) the term `covered group health plan' means a
group health plan maintained by a large employer;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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));</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(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)).''.</DELETED>
<DELETED> (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:</DELETED>
<DELETED>``Sec. 9826. Oversight of entities that provide pharmacy
benefit management services.''.
<DELETED> (d) Funding.--</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (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:</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (2) The mechanics needed in the pharmaceutical
supply chain (whether existing or not) to move a manufacturer
rebate to the point of sale.</DELETED>
<DELETED> (3) The feasibility of a partial point-of-sale
manufacturer rebate versus a full point-of-sale manufacturer
rebate.</DELETED>
<DELETED> (4) The impact on patient out-of-pocket costs,
premiums, and other cost-sharing.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (6) Behavioral changes between entities that
contract with pharmaceutical manufacturers and pharmaceutical
supply chain.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (8) The impact on pharmacies, including pharmacy
rebates, pharmacy fees, and dispensing channels.</DELETED>
<DELETED> (f) GAO Study.--</DELETED>
<DELETED> (1) In general.--Not later than January 1, 2029,
the Comptroller General of the United States shall report to
Congress on--</DELETED>
<DELETED> (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;</DELETED>
<DELETED> (B) as it relates to pharmacy networks
that include pharmacies under common ownership
described in subparagraph (A)--</DELETED>
<DELETED> (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</DELETED>
<DELETED> (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;</DELETED>
<DELETED> (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;</DELETED>
<DELETED> (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</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (2) Requirement.--In carrying out paragraph (1),
the Comptroller General of the United States shall not
disclose--</DELETED>
<DELETED> (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</DELETED>
<DELETED> (B) commercial or financial information
that is privileged or confidential.</DELETED>
<DELETED> (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).</DELETED>
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) Public Health Service Act.--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 the date
that is 30 months after the date of enactment of the Pharmacy Benefit
Manager Reform Act, 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 unless such
applicable entity agrees to--
``(1) not limit 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); and
``(2) provide the group health plan or health insurance
issuer offering group health insurance coverage, or an entity
providing pharmacy benefit management services on behalf of a
plan or issuer, relevant information necessary to make the
reports described in subsection (b).
``(b) Reports.--
``(1) In general.--For plan years beginning on or after the
date that is 30 months after the date of enactment of the
Pharmacy Benefit Manager Reform Act, not less frequently than
annually, an entity providing pharmacy benefit management
services on behalf of a covered group health plan or group
health insurance coverage (regardless of whether such coverage
is covered group health insurance coverage as defined in
subsection (g)(3)) shall submit to the plan sponsor of such
covered group health plan or issuer of such health insurance
coverage a report in accordance with this subsection and make
such report available to the plan sponsor or issuer in plain
language, 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 or health insurance
coverage--
``(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 such drug
manufacturers with respect to the participants and
beneficiaries in such plan or coverage;
``(B) a list of each drug covered by the plan,
coverage, or entity providing pharmacy benefit
management services for which a claim was filed 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 a claim for the drug was
filed 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 for which a claim was filed 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 and cost per
dosage unit;
``(v) the total out-of-pocket spending by
participants and beneficiaries on such drug
after application of any benefits under the
plan or coverage--
``(I) including copayments,
coinsurance, and deductibles; and
``(II) 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 each of the 50 prescription
drugs with the highest gross spending under the
group health plan or health insurance coverage
during the reporting period--
``(I) a list of all other drugs in
the same therapeutic class (as defined
by the Secretary, the Secretary of
Labor, and the Secretary of the
Treasury), including brand name drugs
and biological products and generic
drugs or biosimilar biological products
that are in the same therapeutic class
as such drug;
``(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, the Secretary of Labor, and
the Secretary of the Treasury, in
consultation with stakeholders; and
``(III) any change in formulary
placement compared to the prior plan
year;
``(C) a list of each therapeutic class of drugs for
which a claim was filed under the group health plan or
health insurance coverage during the reporting period,
and, with respect to each such therapeutic class (as
defined as described in subparagraph (B)(vi)(I)) of
drugs, during the reporting period--
``(i) total gross spending by the plan or
by the issuer offering such coverage;
``(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 on drugs in such
therapeutic class, after application of any
benefits under the plan or coverage--
``(I) including copayments,
coinsurance, and deductibles; and
``(II) 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 issuer; and
``(v) for each therapeutic class under
which 3 or more drugs are included on the
formulary of such plan or coverage--
``(I) the amount received, or
expected to be received, by such
entity, from applicable entities, in
rebates, fees, alternative discounts,
or other remuneration--
``(aa) for claims incurred
during the reporting period; or
``(bb) that is related to
utilization of drugs or drug
spending;
``(II) the total net spending by
the plan or by the issuer with respect
to such coverage on that class of
drugs; and
``(III) the average net spending
per 30-day supply and per 90-day supply
by the plan or by the issuer with
respect to such coverage and its
participants and beneficiaries, among
all drugs within the therapeutic class
for which a claim was filed during the
reporting period;
``(D) total gross spending on prescription drugs by
the plan or by the issuer with respect to such coverage
during the reporting period;
``(E) the total amount received, or expected to be
received, by the group health plan or health insurance
issuer, from applicable entities, in rebates, fees,
alternative discounts, and other remuneration received
from such entities, related to utilization of drugs or
drug spending under that group health plan or health
insurance coverage during the reporting period;
``(F) the total net spending on prescription drugs
by the group health plan or health insurance issuer
with respect to the coverage 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 for--
``(i) referral of the group health plan's
or health insurance issuer's business to the
pharmacy benefit manager;
``(ii) consideration of the entity
providing pharmacy benefit management services
by the group health plan or health insurance
issuer; or
``(iii) the retention of the entity by the
group health plan or health insurance issuer;
``(H)(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 affiliated with or under common
ownership with the entity providing pharmacy benefit
management services on behalf of such plan or coverage,
including mandatory mail and specialty home delivery
programs, retail and mail auto-refill programs, and
cost-sharing assistance incentives funded by an entity
providing pharmacy benefit management services;
``(ii) the percentage of total prescriptions
charged to the plan, issuer, or participants and
beneficiaries in the plan or coverage, that were
dispensed by mail order, specialty, or retail
pharmacies that are affiliated with or under common
ownership with the entity providing pharmacy benefit
management services; and
``(iii) a list of all drugs dispensed by such
affiliated pharmacy or pharmacy under common ownership
and charged to the plan, issuer, or participants and
beneficiaries of the plan or coverage, during the
applicable period, and, with respect to each drug--
``(I)(aa) the amount charged, per dosage
unit, per 30-day supply, and per 90-day supply,
with respect to participants and beneficiaries
in the plan or coverage, to the plan or issuer;
and
``(bb) the amount charged, per dosage unit,
per 30-day supply, and per 90-day supply to
participants and beneficiaries;
``(II) the median amount charged to the
plan or issuer, per dosage unit, 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 affiliated
with or under common ownership with the 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 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 affiliated with or under common
ownership with the entity and that are included
in the pharmacy network of that plan or
coverage;
``(IV) the lowest cost, per dosage unit,
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 or coverage;
``(V) the net acquisition cost per dosage
unit, per 30-day supply, and per 90-day supply,
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, the Secretary of Labor, and the
Secretary of the Treasury, such as average
sales price, wholesale acquisition cost, and
national average drug acquisition cost per
dosage unit 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;
``(I) a summary document for plan sponsors or
issuers that includes the information described in
subparagraphs (A) through (H) that the Secretary, the
Secretary of Labor, and the Secretary of the Treasury
determine useful to plan sponsors and health insurance
issuers 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; and
``(J) a summary document for participants or
beneficiaries, which shall be made available to
participants or beneficiaries upon request to the plan
sponsor, that contains the information described in
subparagraphs (D) through (G) that the Secretary, the
Secretary of Labor, and the Secretary of the Treasury
determine useful to participants or beneficiaries in
better understanding their plan or benefits, except
that such summary document for participants or
beneficiaries shall contain only aggregate information.
``(2) Regulations.--Not later than 2 years after the date
of enactment of the Pharmacy Benefit Manager Reform Act, the
Secretary, the Secretary of Labor, and the Secretary of the
Treasury shall, through notice and comment rulemaking,
promulgate final regulations to implement the requirements of
this subsection. In promulgating such regulations, the
Secretary, the Secretary of Labor, and the Secretary of the
Treasury shall, to the extent practicable, align the reporting
requirements under this subsection with the reporting
requirements under section 2799A-10.
``(3) Additional reporting.--
``(A) Reporting with respect to group health plans
offered by small employers.--For plan years beginning
on or after the date that is 30 months after the date
of enactment of the Pharmacy Benefit Manager Reform
Act, 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 Labor, and
the Secretary of the Treasury may specify. Each such
report shall include, with respect to the applicable
group health plan--
``(i) the information described in
subparagraphs (D), (E), (F), and (G) of
paragraph (1);
``(ii) as applicable, information collected
from drug manufacturers by such plan on the
total amount of copayment assistance dollars
paid, or copayment cards applied, that were
funded by applicable drug manufacturers with
respect to the participants and beneficiaries
in such plan, except that such information
shall not identify any drug manufacturer; and
``(iii) a summary document that includes
the information described in clauses (i) and
(ii) that the Secretary, the Secretary of
Labor, and the Secretary of the Treasury
determine useful for plan sponsors for purposes
of selecting pharmacy benefit management
services, provided that such summary documents
include only aggregate information.
``(B) Opt-in for group health insurance coverage.--
``(i) In general.--A plan sponsor of group
health insurance coverage offered in connection
with a group health plan may, on an annual
basis, for plan years beginning on or after the
date that is 30 months after the date of
enactment of the Pharmacy Benefit Manager
Reform Act, elect to require an entity
providing pharmacy benefit management services
on behalf of 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
entity providing pharmacy benefit
management services on behalf 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 entity
providing pharmacy benefit management
services on behalf 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--
``(aa) the information
described in subparagraphs (D),
(E), (F), and (G) of paragraph
(1); and
``(bb) 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
applicable drug manufacturers
with respect to the
participants and beneficiaries
in such plan, except that such
information shall not identify
any drug manufacturer.
``(iii) Required reporting for covered
group health insurance coverage.--Each health
insurance issuer that offers covered group
health insurance coverage shall annually submit
to the plan sponsor the information described
in paragraph (1)(I), regardless of whether the
plan sponsor made the election described in
clause (i) for the applicable year.
``(iv) Required reporting for other group
health insurance coverage.--Each health
insurance issuer that offers group health
insurance coverage that is not covered group
health insurance shall annually submit a
summary document that includes such information
described in items (aa) and (bb) of clause
(ii)(II) as the Secretary and the Secretary of
Labor determine useful for plan sponsors for
purposes of selecting pharmacy benefit
management services, provided that such summary
documents include only aggregate information.
``(4) 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
HIPAA privacy regulations, as defined in section
1180(b)(3) of the Social Security Act.
``(B) Requirement.--A report submitted under
paragraph (1) or (3) 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
health insurance issuer offering group health
insurance coverage from placing reasonable
restrictions (as the Secretary, the Secretary
of Labor, and the Secretary of the Treasury may
determine) on the public disclosure of the
information contained in a report under
paragraph (1) or (3).
``(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 health insurance issuer offering 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).
``(5) 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 (3) 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 (3) 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 (3) 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, and as
a term of the contract, to abide by the same
use and disclosure restrictions as the plan
sponsor.
``(C) Relationship to hipaa regulations.--With
respect to the HIPAA privacy regulations, as defined in
section 1180(b)(3) of the Social Security Act,
subparagraph (B) does not prohibit a covered entity (as
defined for purposes of such regulations promulgated
under section 264 of the Health Insurance Portability
and Accountability Act of 1996) 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) Written notice.--Plan sponsors of group
health plans and group health insurance coverage shall
provide to each employee written notice informing the
employee of the requirement for health insurance
issuers or entities providing pharmacy benefit
management services on behalf of the plan or coverage
to submit reports to plan sponsors under paragraphs (1)
and (3), as applicable, which may include incorporating
such notification in plan documents provided to the
employee, an employee handbook provided to the
employee, or individual notification.
``(E) 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.
``(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, upon request, to the Comptroller
General of the United States each of the first 2 reports
submitted to a plan sponsor under paragraph (1) or (3) with
respect to such coverage or plan, and other such reports as
requested, in accordance with the privacy requirements under
paragraph (4), 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 entities providing pharmacy
benefit management services to submit reports required
under this subsection. Such secretaries may provide for
separate standard formats for reports to plan sponsors
of group health plans and reports to plan sponsors of
group health insurance coverage offered in connection
with a group health plan.
``(B) Form of report.--The Secretary, the Secretary
of Labor, and the Secretary of the Treasury shall
define through rulemaking a form of the reports under
paragraphs (1) and (3) 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 the case that such
secretaries determine that changes to the standard
format are necessary to prevent anticompetitive
behavior.
``(c) Limitations on Spread Pricing.--
``(1) In general.--For plan years beginning on or after the
date that is 30 months after the date of enactment of the
Pharmacy Benefit Manager Reform Act, a group health plan or
health insurance issuer offering group or individual health
insurance coverage shall ensure that the amount required to be
paid by a participant, beneficiary, or enrollee for a
prescription drug covered under the plan or coverage, and a
third-party administrator or an entity providing pharmacy
benefit management services on behalf of such a plan or
coverage shall ensure that the total amount required to be paid
by the plan or issuer and participant, beneficiary, or enrollee
for a prescription drug covered under the plan or coverage,
does not exceed the price paid to the pharmacy, 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 for
which a claim was filed with the plan, issuer, or
entity were not rendered by the pharmacy.
``(d) Full Rebate Pass-through to Plan or Health Insurance
Issuer.--
``(1) In general.--For plan years beginning on or after the
date that is 30 months after the date of enactment of the
Pharmacy Benefit Manager Reform Act, a third-party
administrator of a group health plan or an entity providing
pharmacy benefit management services on behalf of a group
health plan or health insurance issuer offering group 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 group health plan or
health insurance coverage, to the group health plan or
health insurance issuer offering group health insurance
coverage; and
``(B) ensure that any contract entered into, by
such third-party administrator or entity providing
pharmacy benefit management services on behalf of such
a plan or coverage, with rebate aggregators (or other
purchasing entity designed to aggregate rebates),
applicable group purchasing organizations, or any
subsidiary, parent, affiliate, or subcontractor of the
plan, entity, rebate aggregator (or other purchasing
entity designed to aggregate rebates), or applicable
group purchasing organization remit 100 percent of
rebates, fees, alternative discounts, and other
remuneration received that are related to utilization
of drugs under such group health plan or health
insurance coverage, to the third-party administrator or
entity providing pharmacy benefit management services.
``(2) Form and manner of remittance.--With respect to such
rebates, fees, alternative discounts, and other remuneration--
``(A) the rebates, fees, alternative discounts, and
other remuneration under paragraph (1)(A) shall be--
``(i) remitted--
``(I) on a quarterly basis, to the
group health plan or the group health
insurance issuer, not later than 90
days after the end of each quarter; or
``(II) in the case of an
underpayment in a remittance for a
prior quarter, as soon as practicable,
but not later than 90 days after notice
of the underpayment is first given;
``(ii) fully disclosed and enumerated to
the group health plan or health insurance
issuer, as described in paragraphs (1) and (3)
of subsection (b); and
``(iii) returned to the issuer or entity
providing pharmacy benefit management services
on behalf of the group health plan if an audit
by a plan sponsor, or a third party designated
by a plan sponsor, indicates that the amounts
received are incorrect after such amounts have
been paid to the group health plan or health
insurance issuer;
``(B) the rebates, fees, alternative discounts, and
other remuneration under paragraph (1)(B) shall be
remitted in accordance with such procedures as the
Secretary, Secretary of Labor, and Secretary of the
Treasury establish; and
``(C) the records of such rebates, fees,
alternative discounts, and other remuneration shall be
available for audit by the plan sponsor, issuer, or a
third party designated by a plan sponsor, not less than
once per plan year.
``(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 on behalf of
such group health plan or health insurance coverage shall make
rebate contracts with rebate aggregators or drug manufacturers
available for audit by the plan sponsor or designated third
party, subject to reasonable restrictions (as determined by the
Secretary, the Secretary of Labor, and the Secretary of the
Treasury) on confidentiality to prevent re-disclosure of such
contracts.
``(4) Auditors.--Audits carried out under paragraphs (2)(C)
and (3) shall be performed by an auditor selected by the
applicable plan sponsor.
``(5) Rule of construction.--Nothing in this subsection
shall be construed to--
``(A) prohibit payments to entities offering
pharmacy benefit management services for bona fide
services using a fee structure not described in this
subsection, provided that such fees are transparent to
group health plans and health insurance issuers;
``(B) require a third-party administrator of a
group health plan or an entity providing pharmacy
benefit management services on behalf of a group health
plan or health insurance issuer offering health
insurance coverage to remit bona fide service fees to
group health plans or health insurance issuers; or
``(C) limit the ability of a group health plan or
health insurance issuer to pass through rebates, fees,
alternative discounts, and other remuneration to the
participant or beneficiary.
``(e) Enforcement.--
``(1) In general.--The Secretary shall enforce this
section.
``(2) Violations.--A group health plan, a health insurance
issuer, or an entity providing pharmacy benefit management
services that violates subsection (a); an entity providing
pharmacy benefit management services that 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, 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 group health plan, a health
insurance issuer, an entity providing pharmacy benefit
management services, or a third-party administrator 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 subsection (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,
entity providing pharmacy benefit management services on behalf of a
group health plan or health insurance issuer, or other entity to
restrict disclosure to, or otherwise limit the access of, the Secretary
of Health and Human Services, the Secretary of Labor, or the Secretary
of the Treasury to a report described in subsection (b)(1) or
information related to compliance with subsections (a), (b), (c), or
(d) by such issuer, plan, or entity.
``(g) Definitions.--In this section--
``(1) the term `applicable entity' means--
``(A) an applicable group purchasing organization,
drug manufacturer, distributor, wholesaler, rebate
aggregator (or other purchasing entity designed to
aggregate rebates), 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 `applicable group purchasing organization'
means a group purchasing organization that is affiliated with
or under common ownership with an entity providing pharmacy
benefit management services;
``(3) the term `covered group health insurance coverage'
means health insurance coverage offered in connection with a
group health plan maintained by a large employer;
``(4) the term `covered group health plan' means a group
health plan maintained by a large employer;
``(5) 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 rebates, fees, alternative
discounts, or other remuneration;
``(6) 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;
``(7) 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 rebates, fees, alternative
discounts, or other remuneration;
``(8) the term `plan sponsor' has the meaning given such
term in section 3(16)(B) of the Employee Retirement Income
Security Act of 1974;
``(9) the term `remuneration' has the meaning given such
term by the Secretary, the Secretary of Labor, and the
Secretary of the Treasury, through rulemaking, which shall be
reevaluated by such secretaries every 5 years; and
``(10) the term `wholesale acquisition cost' has the
meaning given such term in section 1847A(c)(6)(B) of the Social
Security Act.'';
(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''; and
(3) in section 2799A-10 (42 U.S.C. 300gg-120), by adding at
the end the following:
``(d) Entities Providing Pharmacy Benefit Management Services.--
Beginning 2 years after the date of enactment of the Pharmacy Benefit
Manager Reform Act, entities providing pharmacy benefit management
services shall report to plan sponsors of group health plans or group
health insurance coverage information required under paragraphs (4),
(5), (6), (7)(A)(iii), and (7)(B) of subsection (a).''.
(b) Employee Retirement Income Security Act of 1974.--
(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 the date
that is 30 months after the date of enactment of the Pharmacy Benefit
Manager Reform Act, 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 unless such applicable entity agrees to--
``(1) not limit 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); and
``(2) provide the group health plan or health insurance
issuer offering group health insurance coverage, or an entity
providing pharmacy benefit management services on behalf of a
plan or issuer, relevant information necessary to make the
reports described in subsection (b).
``(b) Reports.--
``(1) In general.--For plan years beginning on or after the
date that is 30 months after the date of enactment of the
Pharmacy Benefit Manager Reform Act, not less frequently than
annually, an entity providing pharmacy benefit management
services on behalf of a covered group health plan or group
health insurance coverage (regardless of whether such coverage
is covered group health insurance coverage as defined in
subsection (g)(3)) shall submit to the plan sponsor of such
covered group health plan or issuer of such health insurance
coverage a report in accordance with this subsection and make
such report available to the plan sponsor or issuer in plain
language, in a machine-readable format, and, as the Secretary,
the Secretary of Health and Human Services, and the Secretary
of the Treasury may determine, other formats. Each such report
shall include, with respect to the covered group health plan or
health insurance coverage--
``(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 such drug
manufacturers with respect to the participants and
beneficiaries in such plan or coverage;
``(B) a list of each drug covered by the plan,
coverage, or entity providing pharmacy benefit
management services for which a claim was filed 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 a claim for the drug was
filed 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 for which a claim was filed 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 and cost per
dosage unit;
``(v) the total out-of-pocket spending by
participants and beneficiaries on such drug
after application of any benefits under the
plan or coverage--
``(I) including copayments,
coinsurance, and deductibles; and
``(II) 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 each of the 50 prescription
drugs with the highest gross spending under the
group health plan or health insurance coverage
during the reporting period--
``(I) a list of all other drugs in
the same therapeutic class (as defined
by the Secretary, the Secretary of
Health and Human Services, and the
Secretary of the Treasury), including
brand name drugs and biological
products and generic drugs or
biosimilar biological products that are
in the same therapeutic class as such
drug;
``(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, the Secretary of Health and
Human Services, and the Secretary of
the Treasury, in consultation with
stakeholders; and
``(III) any change in formulary
placement compared to the prior plan
year;
``(C) a list of each therapeutic class (as defined
as described in subparagraph (B)(vi)(I)) of drugs for
which a claim was filed under the group health plan or
health insurance coverage 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 or
by the issuer offering such coverage;
``(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 on drugs in such
therapeutic class, after application of any
benefits under the plan or coverage--
``(I) including copayments,
coinsurance, and deductibles; and
``(II) 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 issuer; and
``(v) for each therapeutic class under
which 3 or more drugs are included on the
formulary of such plan or coverage--
``(I) the amount received, or
expected to be received, by such
entity, from applicable entities, in
rebates, fees, alternative discounts,
or other remuneration--
``(aa) for claims incurred
during the reporting period; or
``(bb) that is related to
utilization of drugs or drug
spending;
``(II) the total net spending by
the plan or by the issuer with respect
to such coverage on that class of
drugs; and
``(III) the average net spending
per 30-day supply and per 90-day supply
by the plan or by the issuer with
respect to such coverage and its
participants and beneficiaries, among
all drugs within the therapeutic class
for which a claim was filed during the
reporting period;
``(D) total gross spending on prescription drugs by
the plan or coverage during the reporting period;
``(E) the total amount received, or expected to be
received, by the group health plan or health insurance
issuer, from applicable entities, in rebates, fees,
alternative discounts, and other remuneration received
from such entities, related to utilization of drugs or
drug spending under that group health plan or health
insurance coverage during the reporting period;
``(F) the total net spending on prescription drugs
by the group health plan or health insurance issuer
with respect to the coverage 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 for--
``(i) referral of the group health plan's
or health insurance issuer's business to the
pharmacy benefit manager;
``(ii) consideration of the entity
providing pharmacy benefit management services
by the group health plan or health insurance
issuer; or
``(iii) the retention of the entity by the
group health plan or health insurance issuer;
``(H)(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 affiliated with or under common
ownership with the entity providing pharmacy benefit
management services on behalf of such plan or coverage,
including mandatory mail and specialty home delivery
programs, retail and mail auto-refill programs, and
cost-sharing assistance incentives funded by an entity
providing pharmacy benefit management services;
``(ii) the percentage of total prescriptions
charged to the plan, issuer, or participants and
beneficiaries in the plan or coverage, that were
dispensed by mail order, specialty, or retail
pharmacies that are affiliated with or under common
ownership with the entity providing pharmacy benefit
management services; and
``(iii) a list of all drugs dispensed by such
affiliated pharmacy or pharmacy under common ownership
and charged to the plan, issuer, or participants and
beneficiaries of the plan or coverage, during the
applicable period, and, with respect to each drug--
``(I)(aa) the amount charged, per dosage
unit, per 30-day supply, and per 90-day supply,
with respect to participants and beneficiaries
in the plan or coverage, to the plan or issuer;
and
``(bb) the amount charged, per dosage unit,
per 30-day supply, and per 90-day supply to
participants and beneficiaries;
``(II) the median amount charged to the
plan or issuer, per dosage unit, 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 affiliated
with or under common ownership with the 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 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 affiliated with or under common
ownership with the entity and that are included
in the pharmacy network of that plan or
coverage;
``(IV) the lowest cost, per dosage unit,
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 or coverage;
``(V) the net acquisition cost per dosage
unit, per 30-day supply, and per 90-day supply,
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, the Secretary of Health and Human
Services, and the Secretary of the Treasury,
such as average sales price, wholesale
acquisition cost, and national average drug
acquisition cost per dosage unit 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;
``(I) a summary document for plan sponsors or
issuers that includes the information described in
subparagraphs (A) through (H) that the Secretary, the
Secretary of Health and Human Services, and the
Secretary of the Treasury determine useful to plan
sponsors and health insurance issuers 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; and
``(J) a summary document for participants or
beneficiaries, which shall be made available to
participants or beneficiaries upon request to the plan
sponsor, that contains the information described in
subparagraphs (D) through (G) that the Secretary, the
Secretary of Health and Human Services, and the
Secretary of the Treasury determine useful to
participants or beneficiaries in better understanding
their plan or benefits, except that such summary
document for participants or beneficiaries shall
contain only aggregate information.
``(2) Regulations.--Not later than 2 years after the date
of enactment of the Pharmacy Benefit Manager Reform Act, the
Secretary, the Secretary of Health and Human Services, and the
Secretary of the Treasury shall, through notice and comment
rulemaking, promulgate final regulations to implement the
requirements of this subsection. In promulgating such
regulations, the Secretary, the Secretary of Health and Human
Services, and the Secretary of the Treasury shall, to the
extent practicable, align the reporting requirements under this
subsection with the reporting requirements under section 725.
``(3) Additional reporting.--
``(A) Reporting with respect to group health plans
offered by small employers.--For plan years beginning
on or after the date that is 30 months after the date
of enactment of the Pharmacy Benefit Manager Reform
Act, 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
specify. Each such report shall include, with respect
to the applicable group health plan--
``(i) the information described in
subparagraphs (D), (E), (F), and (G) of
paragraph (1);
``(ii) as applicable, information collected
from drug manufacturers by such plan on the
total amount of copayment assistance dollars
paid, or copayment cards applied, that were
funded by applicable drug manufacturers with
respect to the participants and beneficiaries
in such plan, except that such information
shall not identify any drug manufacturer; and
``(iii) a summary document that includes
the information described in clauses (i) and
(ii) that the Secretary, the Secretary of
Health and Human Services, and the Secretary of
the Treasury determine useful to plan sponsors
for purposes of selecting pharmacy benefit
management services, provided that such summary
documents include only aggregate information.
``(B) Opt-in for group health insurance coverage.--
``(i) In general.--A plan sponsor of group
health insurance coverage offered in connection
with a group health plan may, on an annual
basis, for plan years beginning on or after the
date that is 30 months after the date of
enactment of the Pharmacy Benefit Manager
Reform Act, elect to require an entity
providing pharmacy benefit management services
on behalf of 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
entity providing pharmacy benefit
management services on behalf 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 entity
providing pharmacy benefit management
services on behalf 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--
``(aa) the information
described in subparagraphs (D),
(E), (F), and (G) of paragraph
(1); and
``(bb) 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
applicable drug manufacturers
with respect to the
participants and beneficiaries
in such plan, except that such
information shall not identify
any drug manufacturer.
``(iii) Required reporting for covered
group health insurance coverage.--Each health
insurance issuer that offers covered group
health insurance coverage shall annually submit
to the plan sponsor the information described
in paragraph (1)(I), regardless of whether the
plan sponsor made the election described in
clause (i) for the applicable year.
``(iv) Required reporting for other group
health insurance coverage.--Each health
insurance issuer that offers group health
insurance coverage that is not covered group
health insurance shall annually submit a
summary document that includes such information
described in items (aa) and (bb) of clause
(ii)(II) as the Secretary and the Secretary of
Health and Human Services determine useful for
plan sponsors for purposes of selecting
pharmacy benefit management services, provided
that such summary documents include only
aggregate information.
``(4) 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
HIPAA privacy regulations, as defined in section
1180(b)(3) of the Social Security Act (42 U.S.C. 1320d-
9(b)(3)).
``(B) Requirement.--A report submitted under
paragraph (1) or (3) 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
health insurance issuer offering group health
insurance coverage from placing reasonable
restrictions (as the Secretary, the Secretary
of Health and Human Services, and the Secretary
of the Treasury may determine) on the public
disclosure of the information contained in a
report under paragraph (1) or (3).
``(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 health insurance issuer offering 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).
``(5) 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 (3) 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 (3) 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 (3) 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, and as
a term of the contract, to abide by the same
use and disclosure restrictions as the plan
sponsor.
``(C) Relationship to hipaa regulations.--With
respect to HIPAA privacy regulations, as defined in
section 1180(b)(3) of the Social Security Act (42
U.S.C. 1320d-9(b)(3)), subparagraph (B) does not
prohibit a covered entity (as defined for purposes of
such regulations promulgated under section 264 of the
Health Insurance Portability and Accountability Act of
1996 (42 U.S.C. 1320d-2)) 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) Written notice.--Plan sponsors of group
health plans and group health insurance coverage shall
provide to each employee written notice informing the
employee of the requirement for health insurance
issuers or entities providing pharmacy benefit
management services on behalf of the plan or coverage
to submit reports to plan sponsors under paragraphs (1)
and (3), as applicable, which may include incorporating
such notification in plan documents provided to the
employee, an employee handbook provided to the
employee, or individual notification.
``(E) 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.
``(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, upon request, to the Comptroller
General of the United States each of the first 2 reports
submitted to a plan sponsor under paragraph (1) or (3) with
respect to such coverage or plan, and other such reports as
requested, in accordance with the privacy requirements under
paragraph (4), 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 entities
providing pharmacy benefit management services to
submit reports required under this subsection. Such
secretaries may provide for separate standard formats
for reports to plan sponsors of group health plans and
reports to plan sponsors of group health insurance
coverage offered in connection with a group health
plan.
``(B) Form of report.--The Secretary, the Secretary
of Health and Human Services, and the Secretary of the
Treasury shall define through rulemaking a form of the
reports under paragraphs (1) and (3) 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 the case that
such secretaries determine that changes to the standard
format are necessary to prevent anticompetitive
behavior.
``(c) Limitations on Spread Pricing.--
``(1) In general.--For plan years beginning on or after the
date that is 30 months after the date of enactment of the
Pharmacy Benefit Manager Reform Act, a group health plan or
health insurance issuer offering group health insurance
coverage shall ensure that the amount required to be paid by a
participant or beneficiary for a prescription drug covered
under the plan or coverage, and a third-party administrator or
an entity providing pharmacy benefit management services on
behalf of such a plan or coverage shall ensure that the total
amount required to be paid by the plan or issuer and
participant or beneficiary for a prescription drug covered
under the plan or coverage, does not exceed the price paid to
the pharmacy, 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 for
which a claim was filed with the plan, issuer, or
entity were not rendered by the pharmacy.
``(d) Full Rebate Pass-through to Plan or Health Insurance
Issuer.--
``(1) In general.--For plan years beginning on or after the
date that is 30 months after the date of enactment of the
Pharmacy Benefit Manager Reform Act, a third-party
administrator of a group health plan or an entity providing
pharmacy benefit management services on behalf of a group
health plan or health insurance issuer offering group 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 group health plan or
health insurance coverage, to the group health plan or
health insurance issuer offering group health insurance
coverage; and
``(B) ensure that any contract entered into, by
such third-party administrator or entity providing
pharmacy benefit management services on behalf of such
a plan or coverage, with rebate aggregators (or other
purchasing entity designed to aggregate rebates),
applicable group purchasing organizations, or any
subsidiary, parent, affiliate, or subcontractor of the
plan, entity, rebate aggregator (or other purchasing
entity designed to aggregate rebates), or applicable
group purchasing organization remit 100 percent of
rebates, fees, alternative discounts, and other
remuneration received that are related to utilization
of drugs under such group health plan or health
insurance coverage, to the third-party administrator or
entity providing pharmacy benefit management services.
``(2) Form and manner of remittance.--With respect to such
rebates, fees, alternative discounts, and other remuneration--
``(A) the rebates, fees, alternative discounts, and
other remuneration under paragraph (1)(A) shall be--
``(i) remitted--
``(I) on a quarterly basis, to the
group health plan or the group health
insurance issuer, not later than 90
days after the end of each quarter; or
``(II) in the case of an
underpayment in a remittance for a
prior quarter, as soon as practicable,
but not later than 90 days after notice
of the underpayment is first given;
``(ii) fully disclosed and enumerated to
the group health plan or health insurance
issuer, as described in paragraphs (1) and (3)
of subsection (b); and
``(iii) returned to the issuer or entity
providing pharmacy benefit management services
on behalf of the group health plan if an audit
by a plan sponsor, or a third party designated
by a plan sponsor, indicates that the amounts
received are incorrect after such amounts have
been paid to the group health plan or health
insurance issuer;
``(B) the rebates, fees, alternative discounts, and
other remuneration under paragraph (1)(B) shall be
remitted in accordance with such procedures as the
Secretary, Secretary of Health and Human Services, and
Secretary of the Treasury establish; and
``(C) the records of such rebates, fees,
alternative discounts, and other remuneration shall be
available for audit by the plan sponsor, issuer, or a
third party designated by a plan sponsor, not less than
once per plan year.
``(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 on behalf of
such group health plan or health insurance coverage shall make
rebate contracts with rebate aggregators or drug manufacturers
available for audit by the plan sponsor or designated third
party, subject to reasonable restrictions (as determined by the
Secretary, the Secretary of Health and Human Services, and the
Secretary of the Treasury) on confidentiality to prevent re-
disclosure of such contracts.
``(4) Auditors.--Audits carried out under paragraphs (2)(C)
and (3) shall be performed by an auditor selected by the
applicable plan sponsor.
``(5) Rule of construction.--Nothing in this subsection
shall be construed to--
``(A) prohibit payments to entities offering
pharmacy benefit management services for bona fide
services using a fee structure not described in this
subsection, provided that such fees are transparent to
group health plans and health insurance issuers;
``(B) require a third-party administrator of a
group health plan or an entity providing pharmacy
benefit management services on behalf of a group health
plan or health insurance issuer offering group health
insurance coverage to remit bona fide service fees to
the group health plans or health insurance issuers; or
``(C) limit the ability of a group health plan or
health insurance issuer to pass through rebates, fees,
alternative discounts, and other remuneration to the
participant or beneficiary.
``(e) Enforcement.--
``(1) In general.--The Secretary shall enforce this
section.
``(2) Violations.--A group health plan, a health insurance
issuer, or an entity providing pharmacy benefit management
services that violates subsection (a); an entity providing
pharmacy benefit management services that 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, 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 group health plan, a health
insurance issuer, an entity providing pharmacy benefit
management services, or a third-party administrator 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 Secretary shall impose civil monetary
penalties under this subsection in the same manner and
according to the same procedures as the Secretary imposes civil
monetary penalties as described in section 502(c)(10).
``(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,
entity providing pharmacy benefit management services on behalf of a
group health plan or health insurance issuer, or other entity to
restrict disclosure to, or otherwise limit the access of, the Secretary
of Labor, the Secretary of Health and Human Services, or the Secretary
of the Treasury to a report described in subsection (b)(1) or
information related to compliance with subsections (a), (b), (c), or
(d) by such issuer, plan, or entity.
``(g) Definitions.--In this section--
``(1) the term `applicable entity' means--
``(A) an applicable group purchasing organization,
drug manufacturer, distributor, wholesaler, rebate
aggregator (or other purchasing entity designed to
aggregate rebates), 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 `applicable group purchasing organization'
means a group purchasing organization that is affiliated with
or under common ownership with an entity providing pharmacy
benefit management services;
``(3) the term `covered group health insurance coverage'
means health insurance coverage offered in connection with a
group health plan maintained by a large employer;
``(4) the term `covered group health plan' means a group
health plan maintained by a large employer;
``(5) 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 rebates, fees, alternative
discounts, or other remuneration;
``(6) 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;
``(7) 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 rebates, fees, alternative
discounts, or other remuneration;
``(8) the term `plan sponsor' has the meaning given such
term in section 3(16)(B);
``(9) 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
rulemaking, which shall be reevaluated by such secretaries
every 5 years; 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.''.
(3) Additional reporting requirement.--Section 725 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1185n) is amended by adding at the end the following:
``(d) Entities Providing Pharmacy Benefit Management Services.--
Beginning 2 years after the date of enactment of the Pharmacy Benefit
Manager Reform Act, entities providing pharmacy benefit management
services shall report to plan sponsors of group health plans
information required under paragraphs (4), (5), (6), (7)(A)(iii), and
(7)(B) of subsection (a).''.
(c) Internal Revenue Code of 1986.--
(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 the date
that is 30 months after the date of enactment of the Pharmacy Benefit
Manager Reform Act, 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 unless such applicable entity
agrees to--
``(1) not limit 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); and
``(2) provide the group health plan or an entity providing
pharmacy benefit management services on behalf of a plan,
relevant information necessary to make the reports described in
subsection (b).
``(b) Reports.--
``(1) In general.--For plan years beginning on or after the
date that is 30 months after the date of enactment of the
Pharmacy Benefit Manager Reform Act, 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 plain language, in a machine-
readable format, and, as the Secretary, the Secretary of Labor,
and the Secretary of Health and Human Services 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 such drug
manufacturers with respect to the participants and
beneficiaries in such plan;
``(B) a list of each drug covered by the plan or
entity providing pharmacy benefit management services
for which a claim was filed 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 a claim for the drug was
filed 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 for which a claim was filed 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 and cost per
dosage unit;
``(v) the total out-of-pocket spending by
participants and beneficiaries on such drug
after application of any benefits under the
plan--
``(I) including copayments,
coinsurance, and deductibles; and
``(II) 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 each of the 50 prescription
drugs with the highest gross spending under the
group health plan during the reporting period--
``(I) a list of all other drugs in
the same therapeutic class (as defined
by the Secretary, the Secretary of
Labor, and the Secretary of Health and
Human Services), including brand name
drugs and biological products and
generic drugs or biosimilar biological
products that are in the same
therapeutic class as such drug;
``(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, the Secretary of Labor, and
the Secretary of Health and Human
Services, in consultation with
stakeholders; and
``(III) any change in formulary
placement compared to the prior plan
year;
``(C) a list of each therapeutic class (as defined
as described in subparagraph (B)(vi)(I)) of drugs for
which a claim was filed under the group 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;
``(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 on drugs in such
therapeutic class, after application of any
benefits under the plan--
``(I) including copayments,
coinsurance, and deductibles; and
``(II) 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
``(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 applicable entities, in
rebates, fees, alternative discounts,
or other remuneration--
``(aa) for claims incurred
during the reporting period; or
``(bb) that is related to
utilization of drugs or drug
spending;
``(II) the total net spending by
the plan on that class of drugs; and
``(III) the average net spending
per 30-day supply and per 90-day supply
by the plan and its participants and
beneficiaries, among all drugs within
the therapeutic class for which a claim
was filed during the reporting period;
``(D) total gross spending on prescription drugs by
the plan during the reporting period;
``(E) the total amount received, or expected to be
received, by the group health plan, from applicable
entities, in rebates, fees, alternative discounts, and
other remuneration received from such entities, related
to utilization of drugs or drug spending under that
group health plan during the reporting period;
``(F) the total net spending on prescription drugs
by the group 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
for--
``(i) referral of the group health plan's
business to the pharmacy benefit manager;
``(ii) consideration of the entity
providing pharmacy benefit management services
by the group health plan; or
``(iii) the retention of the entity by the
group health plan;
``(H)(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
affiliated with or under common ownership with the
entity providing pharmacy benefit management services
on behalf of such plan, including mandatory mail and
specialty home delivery programs, retail and mail auto-
refill programs, and cost-sharing assistance 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 affiliated
with or under common ownership with the entity
providing pharmacy benefit management services; and
``(iii) a list of all drugs dispensed by such
affiliated pharmacy or pharmacy under common ownership
and charged to the plan, or participants and
beneficiaries of the plan, during the applicable
period, and, with respect to each drug--
``(I)(aa) the amount charged, per dosage
unit, per 30-day supply, and per 90-day supply,
with respect to participants and beneficiaries
in the plan, to the plan; and
``(bb) the amount charged, per dosage unit,
per 30-day supply, and per 90-day supply to
participants and beneficiaries;
``(II) the median amount charged to the
plan, per dosage unit, 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 affiliated with or under common
ownership with the entity and that are included
in the pharmacy network of that plan;
``(III) the interquartile range of the
costs, per dosage unit, 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 affiliated with or under common
ownership with the entity and that are included
in the pharmacy network of that plan;
``(IV) the lowest cost, per dosage unit,
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, per 30-day supply, and per 90-day supply,
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, the Secretary of Labor, and the
Secretary of Health and Human Services, such as
average sales price, wholesale acquisition
cost, and national average drug acquisition
cost per dosage unit 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;
``(I) a summary document for plan sponsors that
includes the information described in subparagraphs (A)
through (H) that the Secretary, the Secretary of Labor,
and the Secretary of Health and Human Services
determine useful to 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; and
``(J) a summary document for participants or
beneficiaries, which shall be made available to
participants or beneficiaries upon request to the plan
sponsor, that contains the information described in
subparagraphs (D) through (G) that the Secretary, the
Secretary of Labor, and the Secretary of Health and
Human Services determine useful to participants or
beneficiaries in better understanding their plan or
benefits, except that such summary document for
participants or beneficiaries shall contain only
aggregate information.
``(2) Regulations.--Not later than 2 years after the date
of enactment of the Pharmacy Benefit Manager Reform Act, the
Secretary, the Secretary of Labor, and the Secretary of Health
and Human Services shall, through notice and comment
rulemaking, promulgate final regulations to implement the
requirements of this subsection. In promulgating such
regulations, the Secretary, the Secretary of Labor, and the
Secretary of Health and Human Services shall, to the extent
practicable, align the reporting requirements under this
subsection with the reporting requirements under section 9825.
``(3) Additional reporting.--For plan years beginning on or
after the date that is 30 months after the date of enactment of
the Pharmacy Benefit Manager Reform Act, 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 Labor, and the Secretary of Health
and Human Services may specify. Each such report shall include,
with respect to the applicable group health plan--
``(A) the information described in subparagraphs
(D), (E), (F), and (G) of paragraph (1);
``(B) as applicable, information collected from
drug manufacturers by such plan on the total amount of
copayment assistance dollars paid, or copayment cards
applied, that were funded by applicable drug
manufacturers with respect to the participants and
beneficiaries in such plan, except that such
information shall not identify any drug manufacturer;
and
``(C) a summary document that includes that
information described in subparagraphs (A) and (B) that
the Secretary, the Secretary of Labor, and the
Secretary of Health and Human Services determine useful
for plan sponsors for purposes of selecting pharmacy
benefit management services, provided that such summary
documents include only aggregate information.
``(4) 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
HIPAA privacy regulations, as defined in section
1180(b)(3) of the Social Security Act (42 U.S.C. 1320d-
9(b)(3)).
``(B) Requirement.--A report submitted under
paragraph (1) or (3) 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 (as the Secretary, the Secretary
of Labor, and the Secretary of Health and Human
Services may determine) on the public
disclosure of the information contained in a
report under paragraph (1) or (3).
``(ii) Limitations.--An entity providing
pharmacy benefit management services on behalf
of a group health plan 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).
``(5) 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 (3) 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 (3) 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 (3) 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, and as
a term of the contract, to abide by the same
use and disclosure restrictions as the plan
sponsor.
``(C) Relationship to hipaa regulations.--With
respect to the HIPAA privacy regulations, as defined in
section 1180(b)(3) of the Social Security Act (42
U.S.C. 1320d-9(b)(3)), subparagraph (B) does not
prohibit a covered entity (as defined for purposes of
such regulations promulgated under section 264 of the
Health Insurance Portability and Accountability Act of
1996 (42 U.S.C. 1320d-2)) 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) Written notice.--Plan sponsors of group
health plans shall provide to each employee written
notice informing the employee of the requirement for
entities providing pharmacy benefit management services
to submit reports to plan sponsors under paragraphs (1)
and (3), as applicable, which may include incorporating
such notification in plan documents provided to the
employee, an employee handbook provided to the
employee, or individual notification.
``(E) 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.
``(6) Submissions to gao.--An entity providing pharmacy
benefit management services on behalf of a group health plan
shall submit, upon request, to the Comptroller General of the
United States each of the first 2 reports submitted to a plan
sponsor under paragraph (1) or (3) with respect to such plan,
and other such reports as requested, in accordance with the
privacy requirements under paragraph (4), 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 entities providing
pharmacy benefit management services to submit reports
required under this subsection. Such secretaries may
provide for separate standard formats for reports to
plan sponsors of group health plans and reports to plan
sponsors of group health insurance coverage offered in
connection with a group health plan.
``(B) Form.--The Secretary, the Secretary of Health
and Human Services, and the Secretary of Labor shall
define through rulemaking a form of the reports under
paragraphs (1) and (3) 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 the case that such
secretaries determine that changes to the standard
format are necessary to prevent anticompetitive
behavior.
``(c) Limitations on Spread Pricing.--
``(1) In general.--For plan years beginning on or after the
date that is 30 months after the date of enactment of the
Pharmacy Benefit Manager Reform Act, a group health plan shall
ensure that the amount required to be paid by a participant or
beneficiary for a prescription drug covered under the plan, and
a third-party administrator or an entity providing pharmacy
benefit management services on behalf of such a plan shall
ensure that the total amount required to be paid by the plan
and participant or beneficiary for a prescription drug covered
under the plan, does not exceed the price paid to the pharmacy,
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 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 for
which a claim was filed with 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 the
date that is 30 months after the date of enactment of the
Pharmacy Benefit Manager Reform Act, a third-party
administrator of a group health plan or an entity providing
pharmacy benefit management services on behalf of a group
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 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 on behalf of such
a plan, with rebate aggregators (or other purchasing
entity designed to aggregate rebates), applicable group
purchasing organizations, or any subsidiary, parent,
affiliate, or subcontractor of the plan, entity, rebate
aggregator (or other purchasing entity designed to
aggregate rebates), or applicable group purchasing
organization remit 100 percent of rebates, fees,
alternative discounts, and other remuneration received
that are related to utilization of drugs under such
plan, to the third-party administrator or entity
providing pharmacy benefit management services.
``(2) Form and manner of remittance.--With respect to such
rebates, fees, alternative discounts, and other remuneration--
``(A) the rebates, fees, alternative discounts, and
other remuneration under paragraph (1)(A) shall be--
``(i) remitted--
``(I) on a quarterly basis, to the
group health plan, not later than 90
days after the end of each quarter; or
``(II) in the case of an
underpayment in a remittance for a
prior quarter, as soon as practicable,
but not later than 90 days after notice
of the underpayment is first given;
``(ii) fully disclosed and enumerated to
the group health plan, as described in
paragraphs (1) and (3) of subsection (b); and
``(iii) returned to the entity providing
pharmacy benefit management services on behalf
of the group health plan if an audit by a plan
sponsor, or a third party designated by a plan
sponsor, indicates that the amounts received
are incorrect after such amounts have been paid
to the group health plan;
``(B) the rebates, fees, alternative discounts, and
other remuneration under paragraph (1)(B) shall be
remitted in accordance with such procedures as the
Secretary, Secretary of Health and Human Services, and
Secretary of Labor establish; and
``(C) the records of such rebates, fees,
alternative discounts, and other remuneration shall be
available for audit by the plan sponsor, or a third
party designated by a plan sponsor, not less than once
per plan year.
``(3) Audit of rebate contracts.--A third-party
administrator of a group health plan or an entity providing
pharmacy benefit management services on behalf of such group
health plan shall make rebate contracts with rebate aggregators
or drug manufacturers available for audit by the plan sponsor
or designated third party, subject to reasonable restrictions
(as determined by the Secretary, the Secretary of Labor, and
the Secretary of Health and Human Services) on confidentiality
to prevent re-disclosure of such contracts.
``(4) Auditors.--Audits carried out under paragraphs (2)(C)
and (3) shall be performed by an auditor selected by the
applicable plan sponsor.
``(5) Rule of construction.--Nothing in this subsection
shall be construed to--
``(A) prohibit payments to entities offering
pharmacy benefit management services for bona fide
services using a fee structure not described in this
subsection, provided that such fees are transparent to
group health plans;
``(B) require a third-party administrator of a
group health plan or an entity providing pharmacy
benefit management services on behalf of a group health
plan to remit bona fide service fees to plan sponsors
of the group health plan; or
``(C) limit the ability of a group health plan to
pass through rebates, fees, alternative discounts, and
other remuneration to the participant or beneficiary.
``(e) Enforcement.--
``(1) In general.--The Secretary shall enforce this
section.
``(2) Violations.--A group health plan or an entity
providing pharmacy benefit management services that violates
subsection (a); an entity providing pharmacy benefit management
services that 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.--A group health plan, an entity
providing pharmacy benefit management services, or a third-
party administrator 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 subsection (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, entity providing pharmacy
benefit management services on behalf of a group health plan, or other
entity to restrict disclosure to, or otherwise limit the access of, the
Secretary of the Treasury to a report described in subsection (b)(1) or
information related to compliance with subsections (a), (b), (c), or
(d) by such plan or entity.
``(g) Definitions.--In this section--
``(1) the term `applicable entity' means--
``(A) an applicable group purchasing organization,
drug manufacturer, distributor, wholesaler, rebate
aggregator (or other purchasing entity designed to
aggregate rebates), 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 `applicable group purchasing organization'
means a group purchasing organization that is affiliated with
or under common ownership with an entity providing pharmacy
benefit management services;
``(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, means the
amount spent by a group health plan on prescription drug
benefits, calculated before the application of 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, means the amount spent
by a group health plan on prescription drug benefits,
calculated after the application of 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 rulemaking,
which shall be reevaluated by such secretaries every 5 years;
and
``(9) 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.''.
(3) Additional reporting requirement.--Section 9825 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following:
``(d) Entities Providing Pharmacy Benefit Management Services.--
Beginning 2 years after the date of enactment of the Pharmacy Benefit
Manager Reform Act, entities providing pharmacy benefit management
services shall report to plan sponsors of group health plans
information required under paragraphs (4), (5), (6), (7)(A)(iii), and
(7)(B) of subsection (a).''.
(d) Funding.--
(1) For purposes of carrying out the amendments made by
subsection (a) there is appropriated to the Centers for
Medicare & Medicaid Services, out of amounts in the Treasury
not otherwise appropriated, $40,000,000 for fiscal year 2023,
to remain available until expended.
(2) For purposes of carrying out the amendments made by
subsection (b), there is appropriated to the Department of
Labor, out of amounts in the Treasury not otherwise
appropriated, $4,500,000 for fiscal year 2023, to remain
available until expended.
(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 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, or 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 manufacturers,
distributors, wholesalers, rebate aggregators, pharmacy
services administrative organizations, or group purchasing
organizations.
(6) Behavioral changes between entities that contract with
pharmaceutical manufacturers and entities that participate in
the 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.
(9) The impact of manufacturer rebates on getting insulin
products to market, and the market dynamics and extent to which
biosimilar biological product development and competition could
increase, or is increasing, the number of biological products
approved and available to patients, including by examining
barriers to--
(A) placement of biosimilar biological products on
health insurance formularies;
(B) market entry of insulin products in the United
States, as compared to other highly developed nations;
and
(C) patient and provider education around
biosimilar biological products.
(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 a selection of group
health plans, health insurance issuers, and entities
providing pharmacy benefit management services on
behalf of such group health plan or group or individual
health insurance coverage, including networks that have
pharmacies that are affiliated with or in common
ownership 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 affiliated with or in common ownership with
plans, issuers, or entities, as 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 drugs compared to other network
pharmacies;
(C) whether group health plans and health insurance
issuers offering group health insurance coverage have
options to elect different network pricing arrangements
in the marketplace with entities that provide pharmacy
benefit management services, and the prevalence of
electing such different network pricing arrangements
among a selection of such plans and issuers;
(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) for a selection of plans and issuers, the
degree to which mail order, specialty, or retail
pharmacies that dispense prescription drugs to
participants and beneficiaries in a group health plan
or group health insurance coverage that are affiliated
with or in common ownership with group health plans,
health insurance issuers, or entities providing
pharmacy benefit management services or pharmacy
benefit administrative services under a group health
plan or group 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 or issuer that are not affiliated with or in
common ownership with 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, group health 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).
SEC. 3. REPORTING ON JUSTIFICATION FOR DRUG PRICE INCREASES.
Title III of the Public Health Service Act (42 U.S.C. 241 et seq.)
is amended by adding at the end the following:
``PART W--DRUG PRICE REPORTING; DRUG VALUE FUND
``SEC. 399OO. REPORTING ON JUSTIFICATION FOR DRUG PRICE INCREASES.
``(a) Definitions.--In this section:
``(1) Manufacturer.--The term `manufacturer' means the
person--
``(A) that holds the application for a drug
approved under section 505 of the Federal Food, Drug,
and Cosmetic Act or the license issued under section
351 of this Act; or
``(B) who is engaged in manufacturing, preparing,
propagating, compounding, processing, packaging,
repackaging, or labeling of a prescription drug.
``(2) Qualifying drug.--The term `qualifying drug' means
any drug that is approved under subsection (c) or (j) of
section 505 of the Federal Food, Drug, and Cosmetic Act or
licensed under subsection (a) or (k) of section 351 of this
Act--
``(A) that has a wholesale acquisition cost of $100
or more per month supply, or per a course of treatment
that lasts less than a month, and is--
``(i) subject to section 503(b)(1) of the
Federal Food, Drug, and Cosmetic Act;
``(ii) not a vaccine; and
``(iii) not an antibiotic; and
``(B) for which, during the previous calendar year,
at least 1 dollar of the total amount of sales was for
individuals enrolled under the Medicare program under
title XVIII of the Social Security Act (42 U.S.C. 1395
et seq.) or under a State Medicaid plan under title XIX
of such Act (42 U.S.C. 1396 et seq.) or under a waiver
of such plan.
``(3) Wholesale acquisition cost.--The term `wholesale
acquisition cost' has the meaning given that term in section
1847A(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
3a(c)(6)(B)).
``(b) Report.--
``(1) Report required.--The manufacturer of a qualifying
drug shall submit a report to the Secretary for each planned
increase in price of a qualifying drug that will result in an
increase in the wholesale acquisition cost of that drug that is
equal to--
``(A) 10 percent or more over a 12-month period; or
``(B) 25 percent or more over a 36-month period.
``(2) Report deadline.--Each report described in paragraph
(1) shall be submitted to the Secretary not later than 30 days
prior to the effective date of such planned increase in price.
``(c) Contents.--A report under subsection (b) shall, at a minimum,
include--
``(1) with respect to the qualifying drug--
``(A) the percentage by which the manufacturer will
raise the wholesale acquisition cost of the drug on the
planned effective date of such planned increase in
price;
``(B) a justification for, and description of, each
manufacturer's planned increase in price that will
occur during the 12-month period described in
subsection (b)(1)(A) or the 36-month period described
in subsection (b)(1)(B), as applicable, that shall be
accompanied by information to substantiate the basis
for the justification and a certification that, to the
manufacturer's knowledge and belief, the justification
is truthful and nonmisleading and does not describe
uses of the drug beyond those listed as an indication
or use in its approved labeling;
``(C) the identity of the initial developer of the
drug, if applicable;
``(D) a description of the history of the
manufacturer's price increases for the drug since the
approval of the application for the drug under section
505 of the Federal Food, Drug, and Cosmetic Act or the
issuance of the license for the drug under section 351,
or since the manufacturer acquired such approved
application or license, as applicable;
``(E) the current wholesale acquisition cost of the
drug;
``(F) the total expenditures of the manufacturer
for the 3 years preceding the planned increase in price
on--
``(i) materials and manufacturing for such
drug; and
``(ii) acquiring patents and licensing for
such drug;
``(G) the percentage of total expenditures of the
manufacturer on research and development for such drug
that was derived from Federal funds;
``(H) the total expenditures of the manufacturer on
research and development, for the 3 years preceding the
planned increase in price for such drug, that is
necessary to demonstrate that it meets applicable
standards for approval under section 505 of the Federal
Food, Drug, and Cosmetic Act or licensure under such
section 351, as applicable;
``(I) the total expenditures of the manufacturer on
research and development for such drug that is pursuing
new or expanded indications for such drug through
supplemental applications under section 505(b) of the
Federal Food, Drug, and Cosmetic Act or section 351(a)
of this Act;
``(J) the total expenditures of the manufacturer on
research and development for such drug that is carrying
out postmarket requirements related to such drug,
including those under section 505(o)(3) of the Federal
Food, Drug, and Cosmetic Act;
``(K) the total revenue and the net profit
generated from the qualifying drug for each calendar
year since the approval of the application for the drug
under section 505 of the Federal Food, Drug, and
Cosmetic Act or the issuance of the license for the
drug under section 351, or since the manufacturer
acquired such approved application or license; and
``(L) the total costs associated with marketing and
advertising for the qualifying drug;
``(2) with respect to the manufacturer--
``(A) the total revenue and the net profit of the
manufacturer--
``(i) for the 12-month period preceding the
date of the report, in the case of a report
based on an increase described in subsection
(b)(1)(A);
``(ii) for the 36-month period preceding
the date of the report, in the case of a report
based on an increase described in subsection
(b)(1)(B);
``(B) all stock-based performance metrics used by
the manufacturer to determine executive compensation--
``(i) for the 12-month period preceding the
date of the report, in the case of a report
based on an increase described in subsection
(b)(1)(A); or
``(ii) for the 36-month period preceding
the date of the report, in the case of a report
based on an increase described in subsection
(b)(1)(B); and
``(C) any additional information the manufacturer
chooses to provide related to drug pricing decisions,
such as total expenditures on--
``(i) drug research and development; or
``(ii) clinical trials on drugs, conducted
with the intent of using the data to support
approval of an application under section 505(b)
of the Federal Food, Drug, and Cosmetic Act or
section 351(a), but for which such application
was not submitted or filed, or failed to
receive approval by the Food and Drug
Administration; and
``(3) such other related information as the Secretary
considers appropriate, as specified through notice and comment
rulemaking.
``(d) Civil Money Penalty.--Any manufacturer of a qualifying drug
that fails to submit a report for the drug as required by this section,
or knowingly provides false information, shall be subject to a civil
money penalty of $100,000 for each day on which the violation
continues.
``(e) Public Posting.--
``(1) In general.--Subject to paragraph (3), not later than
30 days after the submission of a report under subsection (b),
the Secretary shall post the report on the public website of
the Department of Health and Human Services, accompanied by
language indicating that such public posting does not represent
an endorsement or validation of the report's content by the
Secretary.
``(2) Format.--In developing the format of such report for
public posting, the Secretary shall consult stakeholders,
including beneficiary groups, and shall seek feedback on the
content and format from consumer advocates and readability
experts to ensure such public reports are user-friendly to the
public and are written in plain language that consumers can
readily understand.
``(3) Trade secrets and confidential information.--This
section does not authorize the disclosure of confidential
commercial information or trade secrets.''.
``SEC. 399OO-1. USE OF CIVIL PENALTY AMOUNTS.
``The Secretary shall, without further appropriation, collect civil
penalties under section 399OO and use the funds derived from such civil
penalties, in addition to any other amounts available to the Secretary,
to carry out activities described in this part and to improve consumer
and provider information about drug value and drug price transparency.
``SEC. 399OO-2. ANNUAL REPORT TO CONGRESS.
``(a) In General.--Subject to subsection (b), the Secretary shall
submit to Congress, and post on the public website of the Department of
Health and Human Services in a way that is easy to find, use, and
understand, an annual report--
``(1) summarizing the information reported pursuant to
section 399OO; and
``(2) including copies of the reports and supporting
detailed economic analyses submitted pursuant to section 399OO.
``(b) Trade Secrets and Confidential Information.-- This section
does not authorize the disclosure of confidential commercial
information or trade secrets.''.
SEC. 4. STUDY ON FIDUCIARY DUTIES OF PHARMACY BENEFIT MANAGERS.
(a) In General.--The Secretary of Labor shall conduct, and submit
to Congress a report describing the results of, a study on the impacts
of a change in policy described in subsection (b).
(b) Policy Described.--Under a policy referred to in subsection
(a)--
(1) an entity providing pharmacy benefit management
services would be considered a fiduciary within the meaning of
section 3(21) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1002(21)) with respect to a group health plan
or group health insurance coverage; and
(2) such an entity would--
(A) be subject to the responsibilities,
obligations, and duties imposed on fiduciaries under
part 4 of subtitle B of title I of such Act (29 U.S.C.
1101 et seq.); and
(B) make the required fiduciary disclosure under
section 408(b)(2)(B)(iii) of such Act (29 U.S.C.
1108(b)(2)(B)(iii)) with respect to the pharmacy
benefit management services provided to the plan or
coverage.
(c) Definition of Pharmacy Benefit Management Services.--In this
section, the term ``pharmacy benefit management services'' means
services related to--
(1) negotiating prices with respect to prescription drugs
on behalf of a group health plan or health insurance issuer
offering group health insurance coverage; and
(2) managing the prescription drug benefits provided by
such plan or coverage, including designing and implementing a
drug formulary, the processing and payment of claims 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.
SEC. 5. CLARIFICATION OF REQUIREMENT TO DISCLOSE DIRECT AND INDIRECT
COMPENSATION FOR BROKERS AND CONSULTANTS TO EMPLOYER-
SPONSORED HEALTH PLANS.
(a) In General.--Section 408(b)(2)(B)(ii)(I)(bb) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1108(b)(2)(B)(ii)(I)(bb)) is amended by adding at the end the
following:
``(CC) Pharmacy benefit management services provided by
pharmacy benefit managers or other service providers and
related services provided by third-party administrators (or
other entities providing such services) for which the covered
service provider, an affiliate, or a subcontractor reasonably
expects to receive indirect compensation or direct compensation
described in item (dd).''.
(b) Regulations.--Not later than 18 months after the date of
enactment of this Act, the Secretary of Labor shall promulgate
regulations, through notice and comment rulemaking, clarifying the
requirements of section 408(b)(2)(B) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1108(b)(2)(B)) with respect to covered
service providers providing services described in subitem (CC) of
subclause (I)(bb) of such section, as amended by subsection (a). Such
regulations shall apply with respect to any plan year that begins on or
after the date that is 6 months after such regulations are promulgated.
(c) Sense of Congress.--It is the sense of Congress that the
amendment made by subsection (a) clarifies the existing requirement of
covered service providers with respect to services described in section
408(b)(2)(B)(ii)(I)(bb)(BB) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1108(b)(2)(B)(ii)(I)(bb)(BB)) that were in
effect since the application date described in section 202(e) of the No
Surprises Act (Public Law 116-260; 29 U.S.C. 1108 note), and does not
impose any additional requirement under section 408(b)(2)(B) of such
Act.
SEC. 6. STUDY ON NALOXONE ACCESS.
(a) In General.--The Comptroller General of the United States shall
conduct a study on actions that may be taken to ensure appropriate
access and affordability of naloxone for individuals seeking to
purchase naloxone. Such study shall address what is known about--
(1) coverage of naloxone (in any available form), including
whether naloxone can be covered as an over-the-counter drug
under a group health plan or group or individual health
insurance coverage (as such terms are defined in section 2791
of the Public Health Service Act (42 U.S.C. 300gg-91));
(2) the out-of-pocket cost to consumers purchasing
naloxone--
(A) with a prescription, with and without coverage
under any such plan or coverage; and
(B) over the counter, with and without coverage
under any such plan or coverage; and
(3) other factors impacting coverage, including barriers in
covering naloxone as an over-the-counter drug, the relative net
costs of naloxone when purchased over the counter without
insurance coverage compared to when purchased with a
prescription and covered under a group health plan or health
insurance coverage, and the availability of naloxone purchased
and distributed through public health entities.
(b) Report.--Not later than 2 years after the date of the enactment
of this Act, the Comptroller General of the United States shall submit
to Congress a report that contains the findings of the study conducted
under subsection (a).
SEC. 7. PROHIBITION ON BLOCKING CONSUMER DECISION-SUPPORT TOOLS.
(a) PHSA.--Part D of title XXVII of the Public Health Service Act
(42 U.S.C. 300gg-111 et seq.), as amended by section 2, is further
amended by adding at the end the following:
``SEC. 2799A-12. PROHIBITION ON BLOCKING CONSUMER DECISION-SUPPORT
TOOLS.
``(a) In General.--A group health plan or a health insurance issuer
offering group or individual health insurance coverage shall not enter
into a contract with an entity that provides pharmacy benefit
management services with respect to such plan or coverage if such
contract includes any terms, conditions, or costs that would prevent or
restrict a covered third party from accessing or using information, for
purposes of the consumer decision-support tool, relevant to the
operability, implementation, and utilization of the consumer-decision
support tool regarding prescription drug benefits under the plan or
coverage that are administered by the entity providing pharmacy benefit
management services in contract with the plan or issuer.
``(b) Definitions.--In this section:
``(1) Consumer decision-support tool.--The term `consumer
decision-support tool' means a tool designed to inform
enrollees in a group health plan or health insurance coverage
about all costs to the enrollee for prescription drugs covered
by the plan or coverage, including out-of-pocket, copayment,
and coinsurance responsibility, as well as means for reducing
the cost to the enrollee, such as manufacturer copayment
assistance, purchasing at the cash price, and purchasing
through mail order pharmacy benefits.
``(2) Covered third party.--The term `covered third party'
means a third party that is in contract, as a business
associate (as defined in section 160.103 of title 45, Code of
Federal Regulations (or successor regulations)), with a group
health plan or a health insurance issuer offering group or
individual health insurance coverage to provide a consumer
decision-support tool.
``(c) Rules of Construction Regarding Privacy.--
``(1) Nothing in this section shall be construed to alter
existing obligations of a covered entity or business associate
under the privacy, security, and breach notification
regulations in parts 160 and 164 of title 45, Code of Federal
Regulations (or successor regulations).
``(2) Nothing in this section shall be construed to require
a group health plan, a health insurance issuer offering group
or individual health insurance coverage, or an entity providing
pharmacy benefit management services to share protected health
information, as defined in section 160.103 of title 45, Code of
Federal Regulations (or successor regulations), with a covered
third party.''.
(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.), as amended by section 2, is further
amended by adding at the end the following:
``SEC. 727. PROHIBITION ON BLOCKING CONSUMER DECISION-SUPPORT TOOLS.
``(a) In General.--A group health plan or a health insurance issuer
offering group health insurance coverage shall not enter into a
contract with an entity that provides pharmacy benefit management
services with respect to such plan or coverage if such contract
includes any terms, conditions, or costs that would prevent or restrict
a covered third party from accessing or using information, for purposes
of the consumer decision-support tool, relevant to the operability,
implementation, and utilization of the consumer-decision support tool
regarding prescription drug benefits under the plan or coverage that
are administered by the entity providing pharmacy benefit management
services in contract with the plan or issuer.
``(b) Definitions.--In this section:
``(1) Consumer decision-support tool.--The term `consumer
decision-support tool' means a tool designed to inform
participants and beneficiaries in a group health plan or health
insurance coverage about all costs to the participant or
beneficiary for prescription drugs covered by the plan or
coverage, including out-of-pocket, copayment, and coinsurance
responsibility, as well as means for reducing the cost to the
participant or beneficiary, such as manufacturer copayment
assistance, purchasing at the cash price, and purchasing
through mail order pharmacy benefits.
``(2) Covered third party.--The term `covered third party'
means a third party that is in contract, as a business
associate (as defined in section 160.103 of title 45, Code of
Federal Regulations (or successor regulations)), with a group
health plan or a health insurance issuer offering group health
insurance coverage to provide a consumer decision-support tool.
``(c) Rules of Construction.--
``(1) Nothing in this section shall be construed to alter
existing obligations of a covered entity or business associate
under the privacy, security, and breach notification
regulations in parts 160 and 164 of title 45, Code of Federal
Regulations (or successor regulations).
``(2) Nothing in this section shall be construed to require
a group health plan, a health insurance issuer offering group
health insurance coverage, or an entity providing pharmacy
benefit management services to share protected health
information, as defined in section 160.103 of title 45, Code of
Federal Regulations (or successor regulations), with a covered
third party.''.
(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.), as amended by section 2, is further
amended by inserting after the item relating to section 726 the
following:
``Sec. 727. Prohibition on blocking consumer decision-support tools.''.
(c) Internal Revenue Code.--
(1) In general.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986, as amended by section 2, is
further amended by adding at the end the following new section:
``SEC. 9827. PROHIBITION ON BLOCKING CONSUMER DECISION-SUPPORT TOOLS.
``(a) In General.--A group health plan offering group health
insurance coverage shall not enter into a contract with an entity that
provides pharmacy benefit management services with respect to such plan
if such contract includes any terms, conditions, or costs that would
prevent or restrict a covered third party from accessing or using
information, for purposes of the consumer decision-support tool,
relevant to the operability, implementation, and utilization of the
consumer-decision support tool regarding prescription drug benefits
under the plan that are administered by the entity providing pharmacy
benefit management services in contract with the plan.
``(b) Definitions.--In this section:
``(1) Consumer decision-support tool.--The term `consumer
decision-support tool' means a tool designed to inform
participants and beneficiaries in a group health plan about all
costs to the participant or beneficiary for prescription drugs
covered by the plan, including out-of-pocket, copayment, and
coinsurance responsibility, as well as means for reducing the
cost to the participant or beneficiary, such as manufacturer
copayment assistance, purchasing at the cash price, and
purchasing through mail order pharmacy benefits.
``(2) Covered third party.--The term `covered third party'
means a third party that is in contract, as a business
associate (as defined in section 160.103 of title 45, Code of
Federal Regulations (or successor regulations)), with a group
health plan or a health insurance issuer offering group health
insurance coverage to provide a consumer decision-support tool.
``(c) Rules of Construction.--
``(1) Nothing in this section shall be construed to alter
existing obligations of a covered entity or business associate
under the privacy, security, and breach notification
regulations in parts 160 and 164 of title 45, Code of Federal
Regulations (or successor regulations).
``(2) Nothing in this section shall be construed to require
a group health plan or an entity providing pharmacy benefit
management services to share protected health information, as
defined in section 160.103 of title 45, Code of Federal
Regulations (or successor regulations), with a covered third
party.''.
(2) Clerical amendment.--The table of sections for
subchapter B of chapter 100 of such Code, as amended by section
2, is further amended by adding at the end the following new
item:
``Sec. 9827. Prohibition on blocking consumer decision-support
tools.''.
(d) Application.--The amendments made by subsections (a), (b), and
(c) shall apply with respect to plan years beginning on or after the
date that is 2 years after the date of enactment of this Act.
(e) Regulations.--The Secretary of Health and Human Services, the
Secretary of Labor, and the Secretary of the Treasury shall jointly
promulgate regulations to carry out the amendments made by subsections
(a), (b), and (c), and shall issue draft regulations not later than 1
year after the date of enactment of this Act.
SEC. 8. REQUIREMENT TO PROVIDE HEALTH CLAIMS, NETWORK, AND COST
INFORMATION.
(a) In General.--Part A of title XXVII of the Public Health Service
Act (42 U.S.C. 300gg et seq.) is amended by inserting after section
2715A the following:
``SEC. 2715B. REQUIREMENT TO PROVIDE HEALTH CLAIMS, NETWORK, AND COST
INFORMATION.
``(a) In General.--A group health plan or a health insurance issuer
offering group or individual health insurance coverage shall make
available for access, exchange, and use without special effort, through
application programming interfaces (or successor technology or
standards), consistent with standards and implementation specifications
adopted under section 3004, the information described in subsection
(b), in the manner described in subsection (b), as applicable, and
otherwise consistent with this section.
``(b) Electronic Information.--The following electronic information
is required to be made available, as the Secretary may specify:
``(1) Historical claims, provider encounter, and payment
data for each enrollee, which--
``(A) may include adjudicated medical and
prescription drug claims and equivalent encounters,
including all data elements contained in such
transactions--
``(i) that were adjudicated by the group
health plan or health insurance issuer during
the previous 5 years or the enrollee's entire
period of enrollment in the applicable plan or
coverage if such period is less than the
previous 5 years;
``(ii) that involve benefits managed by any
third party, such as a pharmacy benefits
manager or radiology benefits manager that
manages benefits or adjudicates claims on
behalf of the plan or coverage; and
``(iii) from any other group health plan or
health insurance coverage offered by the same
insurance issuer, in which the same enrollee
was enrolled during the previous 5 years; and
``(B) shall be available to an enrollee or former
enrollee, the enrollee's providers, and any third-party
applications or services authorized by the enrollee--
``(i) through the application programming
interfaces (or successor technology or
standards) consistent with standards and
specifications adopted under section 3004, in a
single, longitudinal format that is easy to
understand, secure, and that may update
automatically;
``(ii) as soon as practicable, and in no
case later than the period of time determined
by the Secretary, after the claim is
adjudicated or the data is received by the
group health plan or health insurance issuer;
and
``(iii) for a period of 5 years after the
end date of the enrollee's enrollment in the
plan or in any coverage offered by the health
insurance issuer.
``(2) Identifying directory information for all in-network
providers, including facilities and practitioners, that
participate in the plan or coverage, which shall--
``(A) include--
``(i) the national provider identifier for
in-network facilities and practitioners; and
``(ii) the name, address, phone number, and
specialty for each such facility and
practitioner, within a timeframe determined by
the Secretary, from when the plan or coverage
receives provider directory information or
updates from that facility or practitioner;
``(B) be capable of returning the information
necessary to establish a list of participating in-
network facilities and practitioners, in a given
specialty or at a particular facility type, within a
specified geographic radius; and
``(C) be capable of returning the network status,
when presented with identifiers for a given enrollee
and facility or practitioner.
``(3) Estimated enrollee out-of-pocket costs, including
costs expected to be incurred through a deductible, co-payment,
coinsurance, or other form of cost-sharing, for--
``(A) a designated set of common services or
episodes of care, to be established by the Secretary
through rulemaking, including, at a minimum--
``(i) in the case of services provided by a
hospital, the 100 most common diagnosis-related
groups, as used in the Medicare Inpatient
Prospective Patient System (or successor
episode-based reimbursement methodology) at
that hospital, based on claims data adjudicated
by the group health plan or health insurance
issuer;
``(ii) in the case of services provided in
an out-patient setting, including radiology,
lab tests, and out-patient surgical procedures,
any service rendered by the facility or
practitioner, and reimbursed by the group
health plan or health insurance issuer; and
``(iii) in the case of post-acute care,
including home health providers, skilled
nursing facilities, inpatient rehabilitation
facilities, and long-term care hospitals, the
patient out-of-pocket costs for an episode of
care, as the Secretary may determine, which
permits users to reasonably compare costs
across different facility and service types;
and
``(B) all prescription drugs currently included on
any tier of the formulary of the plan or coverage.
``(c) Availability and Access.--Subject to all applicable Federal
and State privacy, security, and breach notification laws, and within a
timeframe determined by the Secretary, the application programming
interfaces (or successor technology or standards), including all data
required to be made available through such interfaces, shall--
``(1) be made available by the applicable group health plan
or health insurance issuer, at no charge, to--
``(A) enrollees and prospective enrollees in the
group health plan or health insurance coverage;
``(B) third parties authorized by the enrollee;
``(C) facilities and practitioners who are under
contract with the plan or coverage; and
``(D) business associates of such facilities and
practitioners, as defined in section 160.103 of title
45, Code of Federal Regulations (or any successor
regulations);
``(2) be available to enrollees in the group health plan or
health insurance coverage, and to third-party applications or
services facilitating such access by enrollees, during the
enrollment process and for a minimum of 5 years after the end
date of the enrollee's enrollment in the plan or in any
coverage offered by the health insurance issuer;
``(3) permit persistent access by third-party applications
or services authorized by the enrollee, for a reasonable period
of time;
``(4) employ the applicable content, vocabulary, and
technical standards, as determined by the Secretary pursuant to
title XXX; and
``(5) employ security and authentication standards, as the
Secretary determines appropriate.
``(d) Denial or Discontinuance of Access.--A group health plan or
health insurance issuer offering group or individual health insurance
coverage may deny access or discontinue access of the application
programming interfaces (or successor technology or standards) to third-
party applications or services on the basis of reasonable privacy or
security concerns, as determined by the Secretary, including at the
request of the enrollee.
``(e) Notification.--When obtaining enrollee authorization to share
information with a third party under this section, a group health plan
or a health insurance issuer offering group or individual health
insurance coverage shall include a notification for the enrollee that
information shared with a third party that is not a covered entity or
business associate is not subject to the privacy, security, or breach
notification rules under parts 160 and 164 of title 45, Code of Federal
Regulations (or successor regulations).
``(f) Rule of Construction Regarding Privacy.--Nothing in this
section shall be construed to alter existing obligations of a covered
entity or business associate under the privacy, security, and breach
notification rules promulgated under section 264(c) of the Health
Insurance Portability and Accountability Act or section 13402 of the
HITECH Act, or to alter the Secretary's existing authority to modify
such rules, under part 2 of title 42, Code of Federal Regulations (or
successor regulations), under section 444 of the General Education
Provisions Act (20 U.S.C. 1232g) (commonly referred to as the `Family
Educational Rights and Privacy Act of 1974'), under the amendments made
by the Genetic Information Nondiscrimination Act, or under State
privacy law.''.
(b) Effective Date.--Section 2715B of the Public Health Service
Act, as added by subsection (a), shall take effect 18 months after the
date of enactment of this Act.
SEC. 9. REQUIRED EXCEPTIONS PROCESS FOR MEDICATION STEP THERAPY
PROTOCOLS.
(a) Short Title.--This section may be cited as the ``Safe Step
Act''.
(b) Required Exceptions Process for Medication Step Therapy
Protocols.--The Employee Retirement Income Security Act of 1974 is
amended by inserting after section 713 of such Act (29 U.S.C. 1185b)
the following new section:
``SEC. 713A. REQUIRED EXCEPTIONS PROCESS FOR MEDICATION STEP THERAPY
PROTOCOLS.
``(a) In General.--In the case of a group health plan or health
insurance issuer offering coverage offered in connection with such a
plan that provides coverage of a prescription drug pursuant to a
medication step therapy protocol, the plan or issuer shall--
``(1) implement a clear, prompt, and transparent process
for a participant or beneficiary (or the prescribing health
care provider (referred to in this section as the `prescriber')
on behalf of the participant or beneficiary) to request an
exception to such medication step therapy protocol, pursuant to
subsection (b); and
``(2) where the participant or beneficiary or prescriber's
request for an exception to the medication step therapy
protocols satisfies the criteria and requirements of subsection
(b), cover the requested drug in accordance with the terms
established by the plan or coverage for patient cost-sharing
rates or amounts at the beginning of the plan year.
``(b) Circumstances for Exception Approval.--The circumstances
requiring an exception to a medication step therapy protocol, pursuant
to a request under subsection (a), are any of the following:
``(1) Any treatments otherwise required under the protocol,
or treatments in the same pharmacological class or having the
same mechanism of action, including treatments provided prior
to the effective date of the participant's or beneficiary's
coverage under the plan or coverage, have been ineffective in
the treatment of the disease or condition of the participant or
beneficiary, when prescribed consistent with clinical
indications, clinical guidelines, or other peer-reviewed
evidence, based on the prescribing health care professional's
judgement or relevant information provided by the participant
or beneficiary (including the medical records of the
participant or beneficiary).
``(2) Delay of effective treatment would lead to severe or
irreversible consequences, or worsen disease progression or a
comorbidity and the treatment otherwise required under the
protocol is reasonably expected by the prescriber to be
ineffective based upon the documented physical or mental
characteristics of the participant or beneficiary and the known
characteristics of such treatment.
``(3) Any treatments otherwise required under the protocol
are contraindicated for the participant or beneficiary or have
caused, or are likely to cause, based on clinical, peer-
reviewed evidence, an adverse reaction or other physical or
mental harm to the participant or beneficiary.
``(4) Any treatment otherwise required under the protocol
has prevented, will prevent, or is likely to prevent a
participant or beneficiary from achieving or maintaining
reasonable and safe functional ability in performing
occupational responsibilities or activities of daily living (as
defined in section 441.505 of title 42, Code of Federal
Regulations (or successor regulations)).
``(5) The participant or beneficiary is stable for his or
her disease or condition on the prescription drug or drugs
selected by the prescriber and has previously received approval
for coverage of the relevant drug or drugs for the disease or
condition by any public or private health plan.
``(6) Other circumstances, as determined by the Secretary.
``(c) Requirement of a Clear Process.--
``(1) In general.--The process required by subsection (a)
shall--
``(A) provide the prescriber or participant or
beneficiary an opportunity to present such prescriber's
clinical rationale and relevant medical information for
the group health plan or health insurance issuer to
evaluate such request for exception;
``(B) develop and use a standard form and
instructions for the request of an exception under
subsection (b), available in paper and electronic
forms, and allow for submission of such form by paper
and electronic means;
``(C) provide both paper and electronic means for
the submission of requests for additional information;
``(D) clearly set forth all required information
and the specific criteria that will be used to
determine whether an exception is warranted, which may
require disclosure of--
``(i) the medical history or other health
records of the participant or beneficiary
demonstrating that the participant or
beneficiary seeking an exception--
``(I) has tried other drugs
included in the drug therapy class
without success; or
``(II) has taken the requested drug
for a clinically appropriate amount of
time to establish stability, in
relation to the condition being treated
and prescription guidelines given by
the prescribing physician; or
``(ii) other clinical information that may
be relevant to conducting the exception review;
``(E) not require the submission of any information
or supporting documentation beyond what is strictly
necessary (as determined by the Secretary) to determine
whether a circumstance listed in subsection (b) exists;
``(F) clearly outline conditions under which an
exception request warrants expedited resolution from
the group health plan or health insurance issuer,
pursuant to subsection (d)(2); and
``(G) allow a representative of a participant or
beneficiary, which may include a designated third-party
advocate, to act on behalf of the participant or
beneficiary.
``(2) Availability of process information.--The group
health plan or health insurance issuer shall make information
regarding the process required under subsection (a) readily
available in the relevant plan materials, including the summary
of benefits and, if available, on the website of the group
health plan or health insurance issuer. Such information shall
include--
``(A) the requirements for requesting an exception
to a medication step therapy protocol pursuant to this
section; and
``(B) any forms, supporting information, and
contact information, as appropriate.
``(d) Timing for Determination of Exception.--The process required
under subsection (a)(1) shall provide for the disposition of requests
received under such paragraph in accordance with the following:
``(1) Subject to paragraph (2), not later than 72 hours
after receiving an initial exception request, the plan or
issuer shall respond to the participant or beneficiary and, if
applicable, the requesting prescriber with either a
determination of exception eligibility or a request for
additional required information strictly necessary to make a
determination of whether the conditions specified in subsection
(b) are met. The plan or issuer shall respond to the
participant or beneficiary and, if applicable, the requesting
prescriber, with a determination of exception eligibility no
later than 72 hours after receipt of the additional required
information.
``(2) In the case of a request under circumstances in which
the applicable medication step therapy protocol may seriously
jeopardize the life or health of the participant or
beneficiary, may jeopardize the ability of the participant or
beneficiary to regain maximum function, or may subject the
participant or beneficiary to severe pain that cannot be
adequately managed without the treatment that is the subject of
the request, the plan or issuer shall conduct a review of the
request and respond to the participant or beneficiary and, if
applicable, the requesting prescriber, with either a
determination of exception eligibility or a request for
additional required information strictly necessary to make a
determination of whether the conditions specified in subsection
(b) are met, in accordance with the following:
``(A) If the plan or issuer can make a
determination of exception eligibility without
additional information, such determination shall be
made on an expedited basis, and no later than 24 hours
after receipt of such request.
``(B) If the plan or issuer requires additional
information before making a determination of exception
eligibility, the plan or issuer shall respond to the
participant or beneficiary and, if applicable, the
requesting prescriber, with a request for such
information within 24 hours of the request for a
determination, and shall respond with a determination
of exception eligibility as quickly as the condition or
disease requires, and no later than 24 hours after
receipt of the additional required information.
``(e) Duration of a Grant.--If an exception to a medication step
therapy protocol is granted under this section to a participant or
beneficiary, coverage for the requested drug shall remain in effect
with respect to such participant or beneficiary for not less than one
year.
``(f) Medication Step Therapy Protocol.--In this section, the term
`medication step therapy protocol' means a drug therapy utilization
management protocol or program under which a group health plan or
health insurance issuer offering group health insurance coverage of
prescription drugs requires a participant or beneficiary to try an
alternative preferred prescription drug or drugs before the plan or
health insurance issuer approves coverage for the non-preferred drug
therapy prescribed.
``(g) Clarification.--This section shall apply with respect to any
group health plan or health insurance coverage offered in connection
with such a plan that provides coverage of a prescription drug pursuant
to a policy that meets the definition of the term `medication step
therapy protocol' in subsection (f), regardless of whether such policy
is described by such group health plan or health insurance coverage as
a step therapy protocol.
``(h) Reporting.--
``(1) Reporting to the secretary.--Not later than 3 years
after the date of enactment of the Safe Step Act and not later
than October 1 of each year thereafter, each group health plan
and health insurance issuer offering group health insurance
coverage shall report to the Secretary, in such manner as the
Secretary shall require, the following:
``(A) The number of step therapy exception requests
received for each exception circumstance described in
paragraphs (1) through (6) of subsection (b), and the
numbers of such requests for each such circumstance
that were--
``(i) approved;
``(ii) deemed approved under subsection
(d)(3) due to the failure of the plan or issuer
to timely respond;
``(iii) denied, and the reasons for the
denials;
``(iv) initially denied and appealed; and
``(v) initially denied and then
subsequently reversed by internal appeals or
external reviews.
``(B) The number of times a plan or issuer
requested additional information in response to a step
therapy exception request, by exception circumstance
described in paragraphs (1) through (6) of subsection
(b).
``(C) The number of exception requests submitted by
participants or beneficiaries, and the number of
exception requests submitted by prescribers, by medical
specialty.
``(D) The medical conditions for which participants
and beneficiaries were granted exceptions due to the
likelihood that switching from a prescription drug will
likely cause an adverse reaction by, or physical or
mental harm to, the participant or beneficiary, as
described in subsection (b)(3).
``(E) The entities responsible for providing
pharmacy benefit management services for the group
health plan or health insurance coverage.
``(2) Information.--A group health plan or health insurance
issuer offering group health insurance coverage shall not enter
into a contract with a third-party administrator or an entity
providing pharmacy benefit management services on behalf of the
plan or coverage that prevents the plan or issuer from
obtaining from the third-party administrator or the entity
providing pharmacy benefit management services any information
needed for the plan or issuer to comply with the reporting
requirements under paragraph (1).
``(3) Reports to congress.--Not later than 3 years after
the date of enactment of the Safe Step Act, and not later than
October 1 of each year thereafter, the Secretary shall submit
to Congress, and make publicly available, a report that
contains a summary and analysis of the information reported
under paragraph (1), including an analysis of, with respect to
requests for exceptions under this section, approvals, and
denials, including the reasons for denials; appeals and
external reviews; and trends, if any, in exception requests by
medical specialty or medical condition.''.
(c) 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 713
the following new items:
``Sec. 713A. Required exceptions process for medication step therapy
protocols.''.
(d) Effective Date.--
(1) In general.--The amendment made by subsection (b)
applies with respect to plan years beginning with the first
plan year that begins at least 6 months after the date of the
enactment of this Act.
(2) Regulations.--Not later than 6 months after the date of
the enactment of this Act, the Secretary of Labor shall issue
final regulations, through notice and comment rulemaking, to
implement the provisions of section 713A of the Employee
Retirement Income Security Act of 1974, as added by subsection
(b).
Calendar No. 113
118th CONGRESS
1st Session
S. 1339
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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.
_______________________________________________________________________
June 22, 2023
Reported with an amendment