[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1967 Introduced in Senate (IS)]
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118th CONGRESS
1st Session
S. 1967
To amend title XVIII of the Social Security Act to establish
requirements relating to the responsibility of pharmacy benefit
managers under Medicare part D.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 14, 2023
Mr. Menendez (for himself, Mrs. Blackburn, Mr. Tester, Mr. Marshall,
Mr. Wyden, and Mr. Crapo) introduced the following bill; which was read
twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to establish
requirements relating to the responsibility of pharmacy benefit
managers under Medicare part D.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Patients Before Middlemen Act'' or
the ``PBM Act''.
SEC. 2. RESPONSIBILITY OF PHARMACY BENEFIT MANAGERS UNDER MEDICARE PART
D.
(a) Prescription Drug Plans.--Section 1860D-12(b) of the Social
Security Act (42 U.S.C. 1395w-112(b)) is amended by adding at the end
the following new paragraph:
``(9) Responsibility of pharmacy benefit managers.--
``(A) In general.--Each contract entered into with
a PDP sponsor under this part with respect to a
prescription drug plan offered by such sponsor shall
provide that any pharmacy benefit manager (or
affiliate, subsidiary, or agent of a pharmacy benefit
manager) acting on behalf of such sponsor--
``(i) derives no income with respect to any
services provided in connection with part D
utilization from any entity or individual other
than bona fide service fees; and
``(ii) sets forth in an agreement between
the pharmacy benefit manager and the PDP
sponsor the amount of any bona fide service
fee. The bona fide service fee must be a flat
dollar amount, cannot be passed on in whole or
in part to another party whether or not the
pharmacy benefit manager takes title to the
drug, and shall not be directly or indirectly
based on, or contingent upon--
``(I) drug price, such as wholesale
acquisition cost or drug benchmark
price (such as average wholesale
price);
``(II) discounts, rebates, fees, or
other remuneration with respect to
prescription drugs prescribed to
enrollees in the plan; or
``(III) any other amounts
prohibited by the Secretary.
``(B) Clarification regarding pdp sponsor acting as
pbm.--In the case where a PDP sponsor is acting as a
pharmacy benefit manager on behalf of a prescription
drug plan offered by the PDP sponsor, the requirements
under subparagraph (A) shall not be construed as
preventing the PDP sponsor from accepting any rebates,
discounts, or price concessions that lower net costs
for covered part D drugs.
``(C) Certification of compliance.--The PDP sponsor
and pharmacy benefit manager shall furnish to the
Secretary (in a time and manner specified by the
Secretary) an annual certification of compliance with
this paragraph, as well as such information as the
Secretary determines necessary to carry out this
paragraph.
``(D) Disgorgement of excess amounts received.--A
pharmacy benefit manager (or affiliate, subsidiary, or
agent of a pharmacy benefit manager) shall disgorge to
the Secretary any payment, remuneration, or other
amount received in violation of this paragraph or the
contract entered into with a PDP sponsor under this
part with respect to a prescription drug plan.
``(E) Clarification.--The requirements of this
paragraph shall apply regardless of whether the
pharmacy benefit manager is a first-tier, downstream,
or related entity to the PDP sponsor.
``(F) Rule of construction.--Nothing in this
paragraph shall be construed as prohibiting payments
related to reimbursement for ingredient costs to
entities that acquire prescription drugs or pharmacy
dispensing fees.
``(G) Definitions.--For purposes of this paragraph:
``(i) Bona fide service fee.--The term
`bona fide service fee' means fair market value
for a bona fide, itemized service actually
performed on behalf of an entity, that the
entity would otherwise perform (or contract
for) in the absence of the service arrangement
and that are not passed on in whole to a client
or customer, whether or not the entity takes
title to the drug.
``(ii) Pharmacy benefit manager.--The term
`pharmacy benefit manager' means any person,
business, or other entity that, pursuant to an
agreement with a PDP sponsor or part D plan
either directly or through an intermediary acts
as a price negotiator or group purchaser on
behalf of such sponsor or plan, or manages the
prescription drug benefits provided by such
sponsor or plan, including 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 part D drugs,
or the provision of services related thereto.
Such term includes--
``(I) any person, business, or
other entity that carries out one or
more of the activities described in the
preceding sentence; and
``(II) any entity that is owned,
affiliated, or related under a common
ownership structure with such a person,
business, or entity (including an
entity owned by or affiliated with the
PDP sponsor) or that acts as a
contractor or agent to such a person,
business, or entity,
irrespective of whether such person, business,
or entity calls itself a `pharmacy benefit
manager'.''.
(b) MA-PD Plans.--Section 1857(f)(3) of the Social Security Act (42
U.S.C. 1395w-27(f)(3)) is amended by adding at the end the following
new subparagraph:
``(E) Responsibility of pharmacy benefit
managers.--Section 1860D-12(b)(9).''.
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