[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2973 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 2973
To amend titles XVIII and XIX of the Social Security Act to establish
requirements relating to pharmacy benefit managers under the Medicare
and Medicaid programs, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 28 (legislative day, September 22), 2023
Mr. Wyden introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend titles XVIII and XIX of the Social Security Act to establish
requirements relating to pharmacy benefit managers under the Medicare
and Medicaid programs, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Modernizing and
Ensuring PBM Accountability Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Arrangements with pharmacy benefit managers with respect to
prescription drug plans and MA-PD plans.
Sec. 3. Ensuring fair assessment of pharmacy performance and quality
under Medicare part D.
Sec. 4. Promoting transparency for pharmacies under Medicare part D.
Sec. 5. Preventing the use of abusive spread pricing in Medicaid.
Sec. 6. Ensuring accurate payments to pharmacies under Medicaid.
Sec. 7. OIG study and report on drug price mark-ups in Medicare part D.
Sec. 8. Resolving P&T committee conflicts of interest.
Sec. 9. Enhancing PBM transparency requirements.
Sec. 10. Facilitating midyear formulary changes for biosimilars.
Sec. 11. Strengthening pharmacy access for seniors.
Sec. 12. Beneficiary-focused listening sessions to improve prescription
drug plan transparency, access, and choice.
Sec. 13. Reporting on enforcement and oversight of pharmacy access
requirements.
Sec. 14. GAO study on price-related compensation across the supply
chain.
Sec. 15. Reports on inappropriate pharmacy rejections.
Sec. 16. GAO study on drug shortages.
Sec. 17. Report on biosimilar and generic access under Medicare part D.
Sec. 18. Medicare Improvement Fund.
SEC. 2. ARRANGEMENTS WITH PHARMACY BENEFIT MANAGERS WITH RESPECT TO
PRESCRIPTION DRUG PLANS AND MA-PD PLANS.
(a) In General.--
(1) Prescription drug plans.--Section 1860D-12 of the
Social Security Act (42 U.S.C. 1395w-112) is amended by adding
at the end the following new subsection:
``(h) Requirements Relating to Pharmacy Benefit Managers.--For plan
years beginning on or after January 1, 2026:
``(1) Agreements with pharmacy benefit managers.--Each
contract entered into with a PDP sponsor under this part with
respect to a prescription drug plan offered by such sponsor
shall provide that any pharmacy benefit manager acting on
behalf of such sponsor has a written agreement with the PDP
sponsor under which the pharmacy benefit manager agrees to meet
the following requirements:
``(A) No income other than bona fide service
fees.--
``(i) In general.--The pharmacy benefit
manager and any affiliate of such pharmacy
benefit manager shall not derive any
remuneration with respect to any services
provided in connection with the utilization of
covered part D drugs from any entity or
individual other than bona fide service fees,
subject to clauses (ii) and (iii).
``(ii) Incentive payments.--For the
purposes of this subsection, an incentive
payment paid by a PDP sponsor to a pharmacy
benefit manager that is performing services on
behalf of such sponsor shall be deemed a `bona
fide service fee' if such payment is a flat
dollar amount, is consistent with fair market
value, and is related to services actually
performed by the pharmacy benefit manager or
affiliate of such pharmacy benefit manager in
connection with the utilization of covered part
D drugs.
``(iii) Clarification on rebates and
discounts used to lower costs for covered part
d drugs.--Rebates, discounts, and other price
concessions received from manufacturers, even
if such price concessions are calculated as a
percentage of a drug's price, shall not be
considered a violation of the requirements of
clause (i) if they are fully passed through to
a PDP sponsor and exclusively used to lower
costs for prescription drugs under this part,
including in cases where a PDP sponsor is
acting as a pharmacy benefit manager on behalf
of a prescription drug plan offered by such PDP
sponsor.
``(iv) Evaluation of remuneration
arrangements.--Remuneration arrangements
between pharmacy benefit managers or affiliates
of such pharmacy benefit managers, as
applicable, and other entities involved in the
dispensing or utilization of covered part D
drugs (including PDP sponsors, manufacturers,
pharmacies, and other entities as determined
appropriate by the Secretary) shall be subject
to review by the Secretary and the Office of
the Inspector General of the Department of
Health and Human Services. The Secretary, in
consultation with the Office of the Inspector
General, shall evaluate whether remuneration
under such arrangements is consistent with fair
market value through reviews and assessments of
such remuneration, as determined appropriate.
``(B) Transparency regarding guarantees and cost
performance evaluations.--The pharmacy benefit manager
shall--
``(i) define, interpret, and apply, in a
fully transparent and consistent manner for
purposes of calculating or otherwise evaluating
pharmacy benefit manager performance against
pricing guarantees or similar cost performance
measurements related to rebates, discounts,
price concessions, or net costs, terms such
as--
``(I) `generic drug', in a manner
consistent with the definition of the
term under section 423.4 of title 42,
Code of Federal Regulations, or a
successor regulation;
``(II) `brand name drug', in a
manner consistent with the definition
of the term under section 423.4 of
title 42, Code of Federal Regulations,
or a successor regulation;
``(III) `specialty drug';
``(IV) `rebate'; and
``(V) `discount';
``(ii) identify any drugs, claims, or price
concessions excluded from any pricing guarantee
or other cost performance calculation or
evaluation in a clear and consistent manner;
and
``(iii) where a pricing guarantee or other
cost performance measure is based on a pricing
benchmark other than the wholesale acquisition
cost (as defined in section 1847A(c)(6)(B)) of
a drug, calculate and provide a wholesale
acquisition cost-based equivalent to the
pricing guarantee or other cost performance
measure in the written agreement.
``(C) Provision of information.--
``(i) In general.--Not later than July 1 of
each year, beginning in 2026, the pharmacy
benefit manager shall submit to the PDP
sponsor, and to the Secretary, a report, in
accordance with this subparagraph, and shall
make such report available to such sponsor at
no cost to such sponsor in a format specified
by the Secretary under paragraph (4). Each such
report shall include, with respect to such PDP
sponsor and each plan offered by such sponsor,
the following information with respect to the
previous plan year:
``(I) A list of all drugs covered
by the plan that were dispensed
including, with respect to each such
drug--
``(aa) the brand name,
generic or non-proprietary
name, and National Drug Code;
``(bb) the number of plan
enrollees for whom the drug was
dispensed, the total number of
prescription claims for the
drug (including original
prescriptions and refills,
counted as separate claims),
and the total number of dosage
units of the drug dispensed;
``(cc) the number of
prescription claims described
in item (bb) by each type of
dispensing channel through
which the drug was dispensed,
including retail, mail order,
specialty pharmacy, long term
care pharmacy, home infusion
pharmacy, or other types of
pharmacies or providers;
``(dd) the average
wholesale acquisition cost,
listed as cost per day's
supply, cost per dosage unit,
and cost per typical course of
treatment (as applicable);
``(ee) the average
wholesale price for the drug,
listed as cost per day's
supply, cost per dosage unit,
and cost per typical course of
treatment (as applicable);
``(ff) the total out-of-
pocket spending by plan
enrollees on such drug after
application of any benefits
under the plan, including plan
enrollee spending through
copayments, coinsurance, and
deductibles;
``(gg) total rebates paid
by the manufacturer on the drug
as reported under the Detailed
DIR Report (or any successor
report) submitted by such
sponsor to the Centers for
Medicare & Medicaid Services;
``(hh) all other direct or
indirect remuneration on the
drug as reported under the
Detailed DIR Report (or any
successor report) submitted by
such sponsor to the Centers for
Medicare & Medicaid Services;
``(ii) the average pharmacy
reimbursement amount paid by
the plan for the drug in the
aggregate and disaggregated by
dispensing channel identified
in item (cc);
``(jj) the average National
Average Drug Acquisition Cost
(NADAC) for retail community
pharmacies; and
``(kk) total manufacturer-
derived revenue, inclusive of
bona fide service fees,
retained by the pharmacy
benefit manager and any
affiliate of such pharmacy
benefit manager attributable to
the drug.
``(II) In the case of a pharmacy
benefit manager that has an affiliate
that is a retail, mail order, or
specialty pharmacy, with respect to
drugs covered by such plan that were
dispensed, the following information:
``(aa) The percentage of
total prescriptions that were
dispensed by pharmacies that
are an affiliate of the
pharmacy benefit manager for
each drug.
``(bb) The interquartile
range of the total combined
costs paid by the plan and plan
enrollees, per dosage unit, per
course of treatment, per 30-day
supply, and per 90-day supply
for each drug dispensed by
pharmacies that are not an
affiliate of the pharmacy
benefit manager and that are
included in the pharmacy
network of such plan.
``(cc) The interquartile
range of the total combined
costs paid by the plan and plan
enrollees, per dosage unit, per
course of treatment, per 30-day
supply, and per 90-day supply
for each drug dispensed by
pharmacies that are an
affiliate of the pharmacy
benefit manager and that are
included in the pharmacy
network of such plan.
``(dd) The lowest total
combined cost paid by the plan
and plan enrollees, per dosage
unit, per course of treatment,
per 30-day supply, and per 90-
day supply, for each drug that
is available from any pharmacy
included in the pharmacy
network of such plan.
``(ee) The difference
between the average acquisition
cost of the affiliate, such as
a pharmacy or other entity that
acquires prescription drugs,
that initially acquires the
drug and the amount reported
under subclause (I)(jj) for
each drug.
``(ff) A list of covered
part D drugs subject to an
agreement with a covered entity
under section 340B of the
Public Health Service Act for
which the pharmacy benefit
manager or an affiliate of the
pharmacy benefit manager had a
contract or other arrangement
with such a covered entity in
the service area of such plan.
``(III) Where a drug approved under
section 505(c) of the Federal Food,
Drug, and Cosmetic Act (referred to in
this subclause as the `listed drug') is
covered by the plan, the following
information:
``(aa) A list of currently
marketed generic drugs approved
under section 505(j) of the
Federal Food, Drug, and
Cosmetic Act pursuant to an
application that references
such listed drug that are not
covered by the plan, are
covered on the same formulary
tier or a formulary tier
typically associated with
higher cost-sharing than the
listed drug, or are subject to
utilization management that the
listed drug is not subject to.
``(bb) The estimated
average beneficiary cost-
sharing under the plan for a
30-day supply of the listed
drug.
``(cc) Where a generic drug
listed under item (aa) is on a
formulary tier typically
associated with higher cost-
sharing than the listed drug,
the estimated average cost-
sharing that a beneficiary
would have paid for a 30-day
supply of each of the generic
drugs described in item (aa),
had the plan provided coverage
for such drugs on the same
formulary tier as the listed
drug.
``(dd) A written
justification for providing
more favorable coverage of the
listed drug than the generic
drugs described in item (aa).
``(ee) The number of
currently marketed generic
drugs approved under section
505(j) of the Federal Food,
Drug, and Cosmetic Act pursuant
to an application that
references such listed drug.
``(IV) Where a reference product
(as defined in section 351(i) of the
Public Health Service Act) is covered
by the plan, the following information:
``(aa) A list of currently
marketed biosimilar biological
products licensed under section
351(k) of the Public Health
Service Act pursuant to an
application that refers to such
reference product that are not
covered by the plan, are
covered on the same formulary
tier or a formulary tier
typically associated with
higher cost-sharing than the
reference product, or are
subject to utilization
management that the reference
product is not subject to.
``(bb) The estimated
average beneficiary cost-
sharing under the plan for a
30-day supply of the reference
product.
``(cc) Where a biosimilar
biological product listed under
item (aa) is on a formulary
tier typically associated with
higher cost-sharing than the
listed drug, the estimated
average cost-sharing that a
beneficiary would have paid for
a 30-day supply of each of the
biosimilar biological products
described in item (aa), had the
plan provided coverage for such
products on the same formulary
tier as the reference product.
``(dd) A written
justification for providing
more favorable coverage of the
reference product than the
biosimilar biological product
described in item (aa).
``(ee) The number of
currently marketed biosimilar
biological products licensed
under section 351(k) of the
Public Health Service Act,
pursuant to an application that
refers to such reference
product.
``(V) Total gross spending on
covered part D drugs by the plan, not
net of rebates, fees, discounts, or
other direct or indirect remuneration.
``(VI) The total amount retained by
the pharmacy benefit manager or an
affiliate of such pharmacy benefit
manager in revenue related to
utilization of prescription drugs under
that plan, inclusive of bona fide
service fees.
``(VII) The total spending on
covered part D drugs net of rebates,
fees, discounts, or other direct and
indirect remuneration by the plan.
``(VIII) An explanation of any
benefit design parameters under such
plan that encourage plan enrollees to
fill prescriptions at pharmacies that
are an affiliate of such pharmacy
benefit manager, such as mail and
specialty home delivery programs, and
retail and mail auto-refill programs.
``(IX) A list of all brokers,
consultants, advisors, and auditors
that receive compensation from the
pharmacy benefit manager or an
affiliate of such pharmacy benefit
manager for referrals, consulting,
auditing, or other services offered to
PDP sponsors related to pharmacy
benefit management services.
``(X) A list of all affiliates of
the pharmacy benefit manager.
``(XI) A summary document submitted
in a standardized template developed by
the Secretary that includes such
information described in subclauses (I)
through (X).
``(ii) Written explanation of contracts or
agreements with drug manufacturers.--
``(I) In general.--The pharmacy
benefit manager shall, not later than
30 days after the finalization of any
contract or agreement between such
pharmacy benefit manager or an
affiliate of such pharmacy benefit
manager and a drug manufacturer (or
subsidiary, agent, or entity affiliated
with such drug manufacturer) that makes
rebates, discounts, payments, or other
financial incentives related to one or
more prescription drugs of the
manufacturer directly or indirectly
contingent upon coverage, formulary
placement, or utilization management
conditions on any other prescription
drugs, submit to the PDP sponsor a
written explanation of such contract or
agreement.
``(II) Requirements.--A written
explanation under subclause (I) shall--
``(aa) include the
manufacturer subject to the
contract or agreement, all
prescription drugs subject to
the contract or agreement and
the manufacturers of such
drugs, and a high-level
description of the terms of
such contract or agreement and
how such terms apply to such
drugs; and
``(bb) be certified by the
Chief Executive Officer, Chief
Financial Officer, or General
Counsel of such pharmacy
benefit manager, affiliate of
such pharmacy benefit manager,
or an individual delegated with
the authority to sign on behalf
of one of these officers, who
reports directly to the
officer.
``(D) Audit rights.--
``(i) In general.--Not less than once a
year, at the request of the PDP sponsor, the
pharmacy benefit manager shall allow for an
audit of the pharmacy benefit manager to ensure
compliance with all terms and conditions under
the written agreement and the accuracy of
information reported under subparagraph (C).
``(ii) Auditor.--The PDP sponsor shall have
the right to select an auditor. The pharmacy
benefit manager shall not impose any
limitations on the selection of such auditor.
``(iii) Provision of information.--The
pharmacy benefit manager shall make available
to such auditor all records, data, contracts,
and other information necessary to confirm the
accuracy of information provided under
subparagraph (C), subject to reasonable
restrictions on how such information must be
reported to prevent redisclosure of such
information.
``(iv) Timing.--The pharmacy benefit
manager must provide information under clause
(iii) and other information, data, and records
relevant to the audit to such auditor within 6
months of the initiation of the audit and
respond to requests for additional information
from such auditor within 30 days after the
request for additional information.
``(v) Information from affiliates.--The
pharmacy benefit manager shall be responsible
for providing to such auditor information
required to be reported under subparagraph (C)
that is owned or held by an affiliate of such
pharmacy benefit manager.
``(E) Enforcement.--The pharmacy benefit manager
shall--
``(i) disgorge to a PDP sponsor (or, in a
case where the PDP sponsor is an affiliate of
such pharmacy benefit manager, to the
Secretary) any payment, remuneration, or other
amount received by the pharmacy benefit manager
or an affiliate of such pharmacy benefit
manager in violation of subparagraph (A) or the
written agreement entered into with such
sponsor under this part with respect to a
prescription drug plan;
``(ii) reimburse the PDP sponsor for any
civil money penalty imposed on the PDP sponsor
as a result of the failure of the pharmacy
benefit manager to meet the requirements of
this paragraph that are applicable to the
pharmacy benefit manager under the agreement;
and
``(iii) be subject to punitive remedies for
breach of contract for failure to comply with
the requirements applicable under this
paragraph.
``(2) Certification of compliance.--Each PDP sponsor shall
furnish to the Secretary (in a time and manner specified by the
Secretary) an annual certification of compliance with this
subsection, as well as such information as the Secretary
determines necessary to carry out this subsection.
``(3) Rule of construction.--Nothing in this subsection
shall be construed as prohibiting payments related to
reimbursement for ingredient costs to any entity that acquires
prescription drugs, such as a pharmacy or wholesaler.
``(4) Standard formats.--Not later than June 1, 2025, the
Secretary shall specify standard, machine-readable formats for
pharmacy benefit managers to submit annual reports required
under paragraph (1)(C)(i).
``(5) Confidentiality.--
``(A) In general.--Information disclosed by a
pharmacy benefit manager or PDP sponsor under this
subsection that is not otherwise publicly available or
available for purchase shall not be disclosed by the
Secretary or a PDP sponsor receiving the information,
except that the Secretary may disclose the information
for the following purposes:
``(i) As the Secretary determines necessary
to carry out this part.
``(ii) To permit the Comptroller General to
review the information provided.
``(iii) To permit the Director of the
Congressional Budget Office to review the
information provided.
``(iv) To permit the Executive Director of
the Medicare Payment Advisory Commission to
review the information provided.
``(v) To the Attorney General for the
purposes of conducting oversight and
enforcement under this title.
``(vi) To the Inspector General of the
Department of Health and Human Services in
accordance with its authorities under the
Inspector General Act of 1978 (section 406 of
title 5, United States Code), and other
applicable statutes.
``(B) Restriction on use of information.--The
Secretary, the Comptroller General, the Director of the
Congressional Budget Office, and the Executive Director
of the Medicare Payment Advisory Commission shall not
report on or disclose information disclosed pursuant to
subparagraph (A) to the public in a manner that would
identify a specific pharmacy benefit manager,
affiliate, manufacturer or wholesaler, PDP sponsor, or
plan, or contract prices, rebates, discounts, or other
remuneration for specific drugs in a manner that may
allow the identification of specific contracting
parties.
``(6) Definitions.--For purposes of this subsection:
``(A) Affiliate.--The term `affiliate' means any
entity that is owned by, controlled by, or related
under a common ownership structure with a pharmacy
benefit manager or PDP sponsor, or that acts as a
contractor or agent to such pharmacy benefit manager or
PDP sponsor, insofar as such contractor or agent
performs any of the functions described under
subparagraph (C).
``(B) Bona fide service fee.--The term `bona fide
service fee' means a fee that is reflective of the fair
market value for a bona fide, itemized service actually
performed on behalf of an entity, that the entity would
otherwise perform (or contract for) in the absence of
the service arrangement and that are not passed on in
whole or in part to a client or customer, whether or
not the entity takes title to the drug. Such fee must
be a flat dollar amount 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
direct or indirect remuneration amounts with
respect to covered part D drugs dispensed to
enrollees in a prescription drug plan, except
as permitted pursuant to paragraph (1)(A)(ii);
``(iii) coverage or formulary placement
decisions or the volume or value of any
referrals or business generated between the
parties to the arrangement; or
``(iv) any other amounts or methodologies
prohibited by the Secretary.
``(C) Pharmacy benefit manager.--The term `pharmacy
benefit manager' means any person or entity that,
either directly or through an intermediary, acts as a
price negotiator or group purchaser on behalf of a PDP
sponsor or prescription drug 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
related services. Such term includes any person or
entity that carries out one or more of the activities
described in the preceding sentence, irrespective of
whether such person or entity calls itself a `pharmacy
benefit manager'.''.
(2) MA-PD plans.--Section 1857(f)(3) of the Social Security
Act (42 U.S.C. 1395w-27(f)(3)) is amended by adding at the end
the following new subparagraph:
``(F) Requirements relating to pharmacy benefit
managers.--For plan years beginning on or after January
1, 2026, section 1860D-12(h).''.
(3) Funding.--
(A) Secretary.--In addition to amounts otherwise
available, there is appropriated to the Centers for
Medicare & Medicaid Services Program Management
Account, out of any money in the Treasury not otherwise
appropriated, $20,000,000 for fiscal year 2026, to
remain available until expended, to carry out the
amendments made by this subsection.
(B) OIG.--In addition to amounts otherwise
available, there is appropriated to the Inspector
General of the Department of Health and Human Services,
out of any money in the Treasury not otherwise
appropriated, $5,000,000 for fiscal year 2026, to
remain available until expended, to carry out the
amendments made by this subsection.
(b) GAO Study and Report on Certain Reporting Requirements.--
(1) Study.--The Comptroller General of the United States
(in this subsection referred to as the ``Comptroller General'')
shall conduct a study on Federal and State reporting
requirements for health plans and pharmacy benefit managers
related to the transparency of prescription drug costs and
prices. Such study shall include an analysis of the following:
(A) Federal statutory and regulatory reporting
requirements for health plans and pharmacy benefit
managers related to prescription drug costs and prices.
(B) Selected States' statutory and regulatory
reporting requirements for health plans and pharmacy
benefit managers related to prescription drug costs and
prices.
(C) The extent to which the statutory and
regulatory reporting requirements identified in
subparagraphs (A) and (B) overlap and conflict.
(D) The resources required by health plans and
pharmacy benefit managers to comply with the reporting
requirements described in subparagraphs (A) and (B).
(E) Other items determined appropriate by the
Comptroller General.
(2) Report.--Not later than 2 years after the date on which
information is first required to be reported under section
1860D-12(h)(1)(C) of the Social Security Act, as added by
subsection (a)(1), the Comptroller General shall submit to
Congress a report containing the results of the study conducted
under paragraph (1), together with recommendations for
legislation and administrative actions that would streamline
and reduce the burden associated with the reporting
requirements for health plans and pharmacy benefit managers
described in paragraph (1).
(c) MedPAC Reports on Agreements With Pharmacy Benefit Managers
With Respect to Prescription Drug Plans and MA-PD Plans.--The Medicare
Payment Advisory Commission shall submit to Congress the following
reports:
(1) Not later than March 31, 2027, a report regarding
agreements with pharmacy benefit managers with respect to
prescription drug plans and MA-PD plans. Such report shall
include--
(A) a description of trends and patterns, including
relevant averages, totals, and other figures for each
of the types of information submitted;
(B) an analysis of any differences in agreements
and their effects on plan enrollee out-of-pocket
spending and average pharmacy reimbursement, and any
other impacts; and
(C) any recommendations the Commission determines
appropriate.
(2) Not later than March 31, 2029, a report describing any
changes with respect to the information described in paragraph
(1) over time, together with any recommendations the Commission
determines appropriate.
SEC. 3. ENSURING FAIR ASSESSMENT OF PHARMACY PERFORMANCE AND QUALITY
UNDER MEDICARE PART D.
(a) Standardized Pharmacy Performance Measures.--Section 1860D-2 of
the Social Security Act (42 U.S.C. 1395w-102) is amended by adding at
the end the following new subsection:
``(f) Application of Standardized Pharmacy Performance Measures.--
``(1) Measures.--For plan years beginning on or after
January 1, 2025, a PDP sponsor offering a prescription drug
plan and an MA organization offering an MA-PD plan shall, for
purposes of incentive payments, price concessions, or any fees
or other remuneration paid or charged to a pharmacy based on
performance measures, only use measures that are--
``(A) established or adopted by the Secretary under
paragraph (2) and included on the list described in
subparagraph (B) of such paragraph; and
``(B) relevant to the performance of such pharmacy
based on the type of pharmacy (including retail, mail
order, specialty, long term care, and home infusion or
other types of pharmacies), drugs dispensed by such
pharmacy, and pharmacy services used to dispense and
manage drugs by such pharmacy.
``(2) Standardized pharmacy performance measures.--
``(A) Measures.--
``(i) In general.--Notwithstanding any
other provision of law, the Secretary shall
establish (or adopt pursuant to clause (iii))
standardized pharmacy performance measures that
may be used by a PDP sponsor offering a
prescription drug plan and an MA organization
offering an MA-PD plan for the purpose of
determining incentive payments, price
concessions, or fees or other remuneration
described in paragraph (1).
``(ii) Requirements.--The measures under
clause (i) shall focus on pharmacy performance
and quality of care based on the type of
pharmacy, as determined by the Secretary. Such
measures shall be evidence-based, feasible,
appropriate and reasonable.
``(iii) Adoption of measure.--In lieu of
establishing some or all of the measures under
this paragraph, the Secretary may adopt
measures that are endorsed by one or more
multi-stakeholder consensus organizations (such
as the Pharmacy Quality Alliance), that has
participation from pharmacies (including retail
and specialty pharmacies not owned or
affiliated with a plan, pharmacy benefit
manager, or other pharmacy), health plans,
pharmacy benefit managers, and the Centers for
Medicare & Medicaid Services. Any measure
adopted under this clause shall be deemed to
meet the requirements under clause (ii).
``(B) Maintenance of list.--
``(i) In general.--The Secretary shall
maintain, and publish on a publicly available
internet website, a list of measures
established or adopted under this paragraph.
Such list shall initially be published no later
than June 1, 2024.
``(ii) Update.--The Secretary shall
periodically evaluate measures, and how
measures are applied by type of pharmacy and
update the measures on the list under clause
(i) so that such measures meet the requirements
under subparagraph (A)(ii).
``(3) Nonapplication of paperwork reduction act.--Chapter
35 of title 44, United States Code, shall not apply to any data
collection undertaken by the Secretary under this
subsection.''.
(b) Funding.--In addition to amounts otherwise available, there is
appropriated to the Centers for Medicare & Medicaid Services Program
Management Account, out of any money in the Treasury not otherwise
appropriated, $4,000,000 for fiscal year 2025, to remain available
until expended, to carry out the amendment made by subsection (a).
SEC. 4. PROMOTING TRANSPARENCY FOR PHARMACIES UNDER MEDICARE PART D.
(a) Transparency for Pharmacies.--Section 1860D-2(f) of the Social
Security Act (42 U.S.C. 1395w-102(f)), as added by section 3, is
amended by adding at the end the following new paragraph:
``(4) Transparency for pharmacies.--
``(A) In general.--For plan years beginning on or
after January 1, 2025, a PDP sponsor offering a
prescription drug plan and an MA organization offering
an MA-PD plan, with respect to payment made by such PDP
sponsor or such MA organization to a pharmacy for a
covered part D drug dispensed by such pharmacy during a
plan year, shall promptly furnish, upon paying a claim
for a covered part D drug from a pharmacy, to such
pharmacy information related to such claim, such as the
Network Reimbursement ID, fees, pharmacy price
concessions, discounts, incentives, or any other forms
of remuneration that affect payment and pricing of the
claim.
``(B) Standardized format.--The PDP sponsor and the
MA organization shall furnish the information described
in subparagraph (A) in a standardized format (as
specified by the Secretary) that includes all fields
needed to price the claim for a covered part D drug
dispensed by such pharmacy.
``(C) Availability of information to the
secretary.--A PDP sponsor offering a prescription drug
plan or an MA organization offering an MA-PD plan shall
make the information described in subparagraph (A)
available to the Secretary upon request.
``(D) Implementation.--Notwithstanding any other
provision of law, the Secretary shall implement this
paragraph by program instruction or otherwise.''.
(b) Funding.--In addition to amounts otherwise available, there is
appropriated to the Centers for Medicare & Medicaid Services Program
Management Account, out of any money in the Treasury not otherwise
appropriated, $2,000,000 for fiscal year 2025, to remain available
until expended, to carry out the amendment made by subsection (a).
SEC. 5. PREVENTING THE USE OF ABUSIVE SPREAD PRICING IN MEDICAID.
(a) In General.--Section 1927(e) of the Social Security Act (42
U.S.C. 1396r-8(e)) is amended by adding at the end the following:
``(6) Transparent prescription drug pass-through pricing
required.--A contract between the State and a pharmacy benefit
manager (referred to in this paragraph as a `PBM'), or a
contract between the State and a managed care entity or other
specified entity (as such terms are defined in section
1903(m)(9)(D) and collectively referred to in this paragraph as
the `entity') that includes provisions making the entity
responsible for coverage of covered outpatient drugs dispensed
to individuals enrolled with the entity, shall require that
payment for such drugs and related administrative services (as
applicable), including payments made by a PBM on behalf of the
State or entity, is based on a transparent prescription drug
pass-through pricing model under which--
``(A) any payment made by the entity or the PBM (as
applicable) for such a drug--
``(i) is limited to--
``(I) ingredient cost; and
``(II) a professional dispensing
fee that is not less than the
professional dispensing fee that the
State plan or waiver would pay if the
plan or waiver was making the payment
directly;
``(ii) is passed through in its entirety by
the entity or PBM to the pharmacy or provider
that dispenses the drug (and shall not be
reduced or denied retroactively under post-
adjudication processes); and
``(iii) is made in a manner that is
consistent with sections 447.502, 447.512,
447.514, and 447.518 of title 42, Code of
Federal Regulations (or any successor
regulation) as if such requirements applied
directly to the entity or the PBM, except that
any payment by the entity or the PBM for the
ingredient cost of such drug purchased by a
covered entity (as defined in subsection
(a)(5)(B)) may exceed the actual acquisition
cost (as defined in 447.502 of title 42, Code
of Federal Regulations, or any successor
regulation) for such drug if--
``(I) such drug was subject to an
agreement under section 340B of the
Public Health Service Act;
``(II) such payment for the
ingredient cost of such drug does not
exceed the maximum payment that would
have been made by the entity or the PBM
for the ingredient cost of such drug if
such drug had not been purchased by
such covered entity; and
``(III) such covered entity reports
to the Secretary (in a form and manner
specified by the Secretary), on an
annual basis and with respect to
payments for the ingredient costs of
such drugs so purchased by such covered
entity that are in excess of the actual
acquisition costs for such drugs, the
aggregate amount of such excess;
``(B) payment to the entity or the PBM (as
applicable) for administrative services performed by
the entity or PBM is limited to the fair market value
of such services;
``(C) the entity or the PBM (as applicable) shall
make available to the State, and the Secretary upon
request, all costs and payments related to covered
outpatient drugs and accompanying administrative
services incurred, received, or made by the entity or
the PBM, including ingredient costs, professional
dispensing fees, administrative fees, post-sale and
post-invoice fees, discounts, or related adjustments
such as direct and indirect remuneration fees, and any
and all other remuneration; and
``(D) any form of spread pricing whereby any amount
charged or claimed by the entity or the PBM (as
applicable) that exceeds the amount paid to the
pharmacies or providers on behalf of the State or
entity, including any post-sale or post-invoice fees,
discounts, or related adjustments such as direct and
indirect remuneration fees or assessments (after
allowing for an administrative fee as described in
subparagraph (B)) is not allowable for purposes of
claiming Federal matching payments under this title.''.
(b) Definition of Pharmacy Benefit Manager.--Section 1927(k) of the
Social Security Act (42 U.S.C. 1396r-8(k)) is amended by adding at the
end the following new paragraph:
``(12) Pharmacy benefit manager.--The term `pharmacy
benefit manager' means any person or entity that, either
directly or through an intermediary, acts as a price negotiator
or group purchaser on behalf of a State, managed care entity or
other specified entity (as such terms are defined in section
1903(m)(9)(D)), or manages the prescription drug benefits
provided by such State, managed care entity, or other specified
entity, including the processing and payment of claims for
prescription drugs, the performance of drug utilization review,
the processing of drug prior authorization requests, the
managing of appeals or grievances related to the prescription
drug benefits, contracting with pharmacies, controlling the
cost of covered outpatient drugs, or the provision of services
related thereto. Such term includes any person or entity that
carries out 1 or more of the activities described in the
preceding sentence, irrespective of whether such person or
entity calls itself a `pharmacy benefit manager'.''.
(c) Conforming Amendments.--Section 1903(m) of such Act (42 U.S.C.
1396b(m)) is amended--
(1) in paragraph (2)(A)(xiii)--
(A) by striking ``and (III)'' and inserting
``(III)'';
(B) by inserting before the period at the end the
following: ``, and (IV) if the entity, or a pharmacy
benefit manager acting on behalf of the entity under a
contract or other arrangement between the entity and
the pharmacy benefit manager, performs any of the
activities described in section 1927(k)(12), such
activities shall comply with the requirements of
section 1927(e)(6)''; and
(C) by moving the left margin 2 ems to the left;
and
(2) by adding at the end the following new paragraph:
``(10) No payment shall be made under this title to a State with
respect to expenditures incurred by the State for payment for services
provided by an other specified entity (as defined in paragraph
(9)(D)(iii)) unless such services are provided in accordance with a
contract between the State and such entity which satisfies the
requirements of paragraph (2)(A)(xiii).''.
(d) Effective Date.--The amendments made by this section apply to
contracts between States and managed care entities, other specified
entities, or pharmacy benefit managers that have an effective date
beginning on or after the date that is 18 months after the date of
enactment of this Act.
SEC. 6. ENSURING ACCURATE PAYMENTS TO PHARMACIES UNDER MEDICAID.
(a) In General.--Section 1927(f) of the Social Security Act (42
U.S.C. 1396r-8(f)) is amended--
(1) by striking ``and'' after the semicolon at the end of
paragraph (1)(A)(i) and all that precedes it through ``(1)''
and inserting the following:
``(1) Determining pharmacy actual acquisition costs.--The
Secretary shall conduct a survey of retail community pharmacy
drug prices to determine the national average drug acquisition
cost as follows:
``(A) Use of vendor.--The Secretary may contract
services for--
``(i) with respect to retail community
pharmacies, the determination of retail survey
prices of the national average drug acquisition
cost for covered outpatient drugs that
represent a nationwide average of consumer
purchase prices for such drugs, net of all
discounts and rebates (to the extent any
information with respect to such discounts and
rebates is available) based on a monthly survey
of such pharmacies; and'';
(2) by adding at the end of paragraph (1) the following:
``(F) Survey reporting.--In order to meet the
requirement of section 1902(a)(54), a State shall
require that any retail community pharmacy in the State
that receives any payment, reimbursement,
administrative fee, discount, or rebate related to the
dispensing of covered outpatient drugs to individuals
receiving benefits under this title, regardless of
whether such payment, reimbursement, administrative
fee, discount, or rebate is received from the State or
a managed care entity or other specified entity (as
such terms are defined in section 1903(m)(9)(D))
directly or from a pharmacy benefit manager or another
entity that has a contract with the State or a managed
care entity or other specified entity (as so defined),
shall respond to surveys of retail prices conducted
under this paragraph.
``(G) Survey information.--Information on national
drug acquisition prices obtained under this paragraph
shall be made publicly available and shall include at
least the following:
``(i) The monthly response rate to the
survey including a list of pharmacies not in
compliance with subparagraph (F).
``(ii) The sampling frame and number of
pharmacies sampled monthly.
``(iii) Information on price concessions to
the pharmacy, including discounts, rebates, and
other price concessions, to the extent that
such information may be publicly released and
has been collected by the Secretary as part of
the survey.
``(H) Penalties.--The Secretary may enforce non-
compliance with this paragraph by a pharmacy through
the establishment of penalties or the suspension of
payments under this title, in full or in part, until
compliance with this paragraph has been completed.'';
(3) in paragraph (2)--
(A) in subparagraph (A), by inserting ``, including
payment rates under Medicaid managed care entities or
other specified entities (as such terms are defined in
section 1903(m)(9)(D)),'' after ``under this title'';
and
(B) in subparagraph (B), by inserting ``and the
basis for such dispensing fees'' before the semicolon;
and
(4) in paragraph (4), by inserting ``, and $5,000,000 for
fiscal year 2024 and each fiscal year thereafter,'' after
``2010''.
(b) Effective Date.--The amendments made by this section take
effect on the first day of the first quarter that begins on or after
the date that is 18 months after the date of enactment of this Act.
SEC. 7. OIG STUDY AND REPORT ON DRUG PRICE MARK-UPS IN MEDICARE PART D.
Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152)
is amended by adding at the end the following new subsection:
``(e) OIG Study and Report on Drug Price Mark-Ups Under This
Part.--
``(1) Study.--The Inspector General of the Department of
Health and Human Services (in this subsection referred to as
the `Inspector General') shall conduct a study on the impact of
related party transactions within select vertically integrated
entities on the negotiated price (as defined in section 1860D-
2(d)(1)(B)) paid by part D plan sponsors for covered part D
drugs. Such study may include an analysis of the following:
``(A) Acquisition costs by the affiliate within
such vertically integrated entities that initially
acquires the prescription drug for a sample of covered
part D drugs, including at least 5 generic drugs, brand
drugs, specialty brand drugs, and specialty generic
drugs.
``(B) The methodologies and negotiation processes
used to calculate transfer prices or other transactions
between related parties with respect to such covered
part D drugs.
``(C) The impact of the transactions described in
subparagraph (B) on the negotiated price, net of direct
and indirect remuneration, for such covered part D
drugs.
``(D) The margin captured by different affiliates
within such vertically integrated entities through the
transactions described in subparagraph (B).
``(E) An assessment of the impact of the
transactions described in subparagraph (B) on costs to
individuals enrolled in a prescription drug plan or an
MA-PD plan and program spending on prescription drugs
under this part.
``(F) Other issues determined to be relevant and
appropriate by the Inspector General.
``(2) Report.--Not later than 3 years after the date of
enactment of this subsection, the Inspector General shall
submit to the Committee on Finance of the Senate and the
Committee on Energy and Commerce and the Committee on Ways and
Means of the House of Representatives a report containing the
results of the study conducted under paragraph (1), together
with recommendations for such legislation and administrative
action as the Inspector General determines appropriate.
``(3) Funding.--In addition to amounts otherwise available,
there is appropriated to the Inspector General, out of any
money in the Treasury not otherwise appropriated, $5,200,000
for fiscal year 2024, to remain available until expended, to
carry out this subsection.''.
SEC. 8. RESOLVING P&T COMMITTEE CONFLICTS OF INTEREST.
Section 1860D-4(b)(3)(A)(ii)(I) of the Social Security Act (42
U.S.C. 1395w-104(b)(3)(A)(ii)(I)) is amended by inserting the following
before the semicolon: ``(and, for 2025 and each subsequent year, any
pharmacy benefit manager acting under contract with such sponsor
offering such plan)''.
SEC. 9. ENHANCING PBM TRANSPARENCY REQUIREMENTS.
(a) In General.--Section 1150A of the Social Security Act (42
U.S.C. 1320b-23) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Provision of Information.--
``(1) In general.--The following entities shall provide the
information described in subsection (b) to the Secretary and,
in the case of an entity described in subparagraph (B) or an
affiliate of such entity described in subparagraph (C), to the
health benefits plan with which the entity is under contract,
at such times, and in such form and manner, as the Secretary
shall specify:
``(A) A health benefits plan.
``(B) Any entity that provides pharmacy benefits
management services on behalf of a health benefits plan
(in this section referred to as a `PBM') that manages
prescription drug coverage under a contract with--
``(i) a PDP sponsor of a prescription drug
plan or an MA organization offering an MA-PD
plan under part D of title XVIII; or
``(ii) a qualified health benefits plan
offered through an exchange established by a
State under section 1311 of the Patient
Protection and Affordable Care Act.
``(C) Any affiliate of an entity described in
subparagraph (B) that acts as a price negotiator or
group purchaser on behalf of such PBM, PDP sponsor, MA
organization, or qualified health benefits plan.
``(2) Affiliate defined.--In this section, the term
`affiliate' means any entity that is owned by, controlled by,
or related under a common ownership structure with a PBM
(including an entity owned or controlled by the PDP sponsor of
a prescription drug plan, MA organization offering an MA-PD
plan, or qualified health benefits plan for which such entity
is acting as a price negotiator or group purchaser).'';
(2) in subsection (b)--
(A) in paragraph (2), by inserting ``and
percentage'' after ``and the aggregate amount''; and
(B) by adding at the end the following new
paragraph:
``(4) The amount (in the aggregate and disaggregated by
type) of all fees the PBM or an affiliate of the PBM receives
from all pharmaceutical manufacturers in connection with
patient utilization under the plan, and the amount and
percentage (in the aggregate and disaggregated by type) of such
fees that are passed through to the plan sponsor or issuer.'';
and
(3) by adding at the end the following new subsection:
``(e) Annual Report.--The Secretary shall make publicly available
on the internet website of the Centers for Medicare & Medicaid Services
an annual report that summarizes the trends observed with respect to
data reported under subsection (b).''.
(b) Effective Date.--The amendments made by this section shall
apply to plan or contract years beginning on or after January 1, 2027.
(c) Implementation.--Notwithstanding any other provision of law,
the Secretary may implement the amendments made by this section by
program instruction or otherwise.
(d) Non-Application of the Paperwork Reduction Act.--Chapter 35 of
title 44, United States Code (commonly referred to as the ``Paperwork
Reduction Act of 1995''), shall not apply to the implementation of the
amendments made by this section.
SEC. 10. FACILITATING MIDYEAR FORMULARY CHANGES FOR BIOSIMILARS.
(a) In General.--Section 1860D-4(b) of the Social Security Act (42
U.S.C. 1395w-104(b)) is amended by adding at the end the following new
paragraph:
``(5) Mid-year changes in formularies permitted for certain
biosimilar biological products and the reference product of
such biosimilars.--If a PDP sponsor of a prescription drug plan
uses a formulary (including the use of tiered cost-sharing),
the following shall apply:
``(A) In general.--For plan year 2025, and
subsequent plan years, in the case of a covered part D
drug that is the reference biological product (as
defined in section 351(i) of the Public Health Service
Act) with respect to a biosimilar biological product
(defined as a biological product licensed under section
351(k) of such Act), the PDP sponsor may, with respect
to a formulary, at any time after the first 60 days of
the plan year, subject to paragraph (3)(E), change the
preferred or tiered cost-sharing status of such
reference biological product if such PDP sponsor adds,
before or at the same time, to such formulary such
biosimilar biological product at the same or a higher
preferred status, or to the same or lower cost-sharing
tier, as that of such reference biological product
immediately prior to such change.
``(B) Request for approval of change.--Prior to
making a change described in subparagraph (A), the PDP
sponsor shall submit to the Secretary a request to make
such change. If the Secretary approves the request or
has not provided a decision to the PDP sponsor
regarding such request within 30 days of receiving such
request, such PDP sponsor may make such change.''.
(b) Administration.--
(1) Implementation.--Notwithstanding any other provision of
law, the Secretary of Health and Human Services may implement
the amendment made by subsection (a) by program instruction or
otherwise.
(2) Non-application of the paperwork reduction act.--
Chapter 35 of title 44, United States Code (commonly referred
to as the ``Paperwork Reduction Act of 1995''), shall not apply
to the implementation of the amendment made by subsection (a).
SEC. 11. STRENGTHENING PHARMACY ACCESS FOR SENIORS.
Section 1860D-4(b)(1) of the Social Security Act (42 U.S.C. 1395w-
104(b)(1)) is amended by adding at the end the following new
subparagraph:
``(F) Limited access drugs.--
``(i) Limitation on restrictions or limits
on access.--For each plan year (beginning with
plan year 2026), a PDP sponsor offering a
prescription drug plan--
``(I) may not restrict or limit
access to any covered part D drug to a
subset of their network pharmacies,
other than with respect to a limited
access drug, as defined in clause (v);
and
``(II) shall document the rationale
for why a covered part D drug meets the
definition of a limited access drug
under clause (v), if such plan
restricts or limits access to a limited
access drug to a subset of network
pharmacies.
``(ii) Annual submission of information to
the secretary on limited access drugs.--For
each plan year (beginning with plan year 2026),
each PDP sponsor offering a prescription drug
plan shall submit to the Secretary, at a time
and in a manner specified by the Secretary,
with respect to each prescription drug plan
offered by the sponsor during such plan year--
``(I) a list of all covered part D
drugs that the PDP sponsor designated
as a limited access drug;
``(II) for each covered part D drug
included in the list described in
subclause (I), a written rationale for
why such drug meets the definition of a
limited access drug;
``(III) a summary of the
requirements imposed on network
pharmacies (including all accreditation
requirements, if any) to ensure
appropriate handling and dispensing of
each covered part D drug included in
the list described in subclause (I);
``(IV) the percentages of each
covered part D drug included in the
list described in subclause (I) that is
dispensed through retail pharmacies,
specialty pharmacies, mail order
pharmacies, or other dispensing
channels as defined by the PDP sponsor,
respectively;
``(V) the annual percentage of each
covered part D drug included in the
list described in subclause (I) that is
dispensed through a pharmacy that is
affiliated with the plan or is an
affiliate (as defined in section 1860D-
12(h)(4)(A)) of a pharmacy benefit
manager acting on behalf of such
sponsor or such plan; and
``(VI) any other information
determined appropriate by the
Secretary.
``(iii) Pharmacy access to limited access
drug information.--For plan years beginning
with plan year 2026, upon the request of a
network pharmacy, a PDP sponsor of a
prescription drug plan shall provide such
pharmacy, not later than 14 days after
receiving such request, with the information
described in subclauses (I), (II), and (III) of
clause (ii).
``(iv) HHS annual report on limited access
drugs.--Not later than December 31, 2028, and
annually thereafter, the Secretary shall submit
to the Committee on Finance of the Senate, and
the Committee on Ways and Means and the
Committee on Energy and Commerce of the House
of Representatives a report on compliance by
PDP sponsors with the requirements under this
subparagraph. Each such report shall include--
``(I) a description of the
patterns, trends, variations, and
rationales for the designation by PDP
sponsors of certain covered part D
drugs as limited access drugs, and the
implications of such designations on
beneficiary access to such covered part
D drugs;
``(II) a description of the
information submitted to the Secretary
under clause (ii) (in a manner that
does not disclose the identity of a
pharmacy, a PDP sponsor, a prescription
drug plan, or pharmacy benefit manager,
or any proprietary pricing
information); and
``(III) any other information
determined appropriate by the
Secretary.
``(v) Limited access drug defined.--In this
subparagraph, the term `limited access drug'
means a covered part D drug that meets at least
one of the following:
``(I) The Food and Drug
Administration has restricted
distribution of such covered part D
drug to certain facilities or
physicians.
``(II) The dispensing of such
covered part D drug requires
extraordinary special handling,
provider coordination, or patient
education that cannot be met by a
network pharmacy.''.
``(vii) Implementation.--Notwithstanding
any other provision of law, the Secretary shall
implement this subparagraph by program
instruction or otherwise.
``(viii) Nonapplication of paperwork
reduction act.--Chapter 35 of title 44, United
States Code, shall not apply to any data
collection undertaken by the Secretary under
this subparagraph.''.
SEC. 12. BENEFICIARY-FOCUSED LISTENING SESSIONS TO IMPROVE PRESCRIPTION
DRUG PLAN TRANSPARENCY, ACCESS, AND CHOICE.
Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152),
as amended by section 7, is amended by adding at the end the following
new subsection:
``(f) Beneficiary-Focused Listening Sessions To Improve
Prescription Drug Plan Transparency, Access, and Choice.--
``(1) In general.--Not later than December 31, 2024, the
Secretary shall hold at least one beneficiary-focused listening
session to receive input on potential improvements to the
experience with, and transparency of, prescription drug plans
under this part, as described in paragraph (2).
``(2) Beneficiary-focused listening sessions.--Any
beneficiary-focused listening session held under paragraph (1)
shall be open to the public, including beneficiaries,
caregivers of beneficiaries, consumer and patient advocacy
organizations, health care providers, and other interested
parties. Any such listening sessions may include an opportunity
for the public to provide input to the Secretary on potential
improvements to--
``(A) the information made available by
prescription drug plans to individuals;
``(B) tools and mechanisms to assist enrollees of
prescription drug plans in navigating plan complaint
systems, as well as the efficiency and effectiveness of
such systems;
``(C) tools and mechanisms to assist beneficiaries
in selecting a prescription drug plan;
``(D) tools and mechanisms to assist enrollees of
prescription drug plans in navigating utilization
management requirements of such plans, such as step
therapy and prior authorization;
``(E) access to, and effectiveness and utilization
of, electronic real-time benefit tools (as described in
section 423.160(b)(7) of title 42, Code of Federal
Regulations, or any successor regulation) and
beneficiary real-time benefit tools (as described in
section 423.128(d)(4) of title 42, Code of Federal
Regulations, or any successor regulation);
``(F) formulary management and oversight by
prescription drug plans; and
``(G) other subjects, as determined appropriate by
the Secretary.''.
SEC. 13. REPORTING ON ENFORCEMENT AND OVERSIGHT OF PHARMACY ACCESS
REQUIREMENTS.
Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152),
as amended by section 12, is amended by adding at the end the following
new subsection:
``(g) Biennial Report on Enforcement and Oversight of Pharmacy
Access Requirements.--
``(1) In general.--Not later than 2 years after the date of
enactment of this subsection, and at least once every 2 years
thereafter, the Secretary shall publish a report on enforcement
and oversight actions and activities undertaken by the
Secretary with respect to the requirements under section 1860D-
4(b)(1).
``(2) Limitation.--A report under paragraph (1) shall not
disclose--
``(A) identifiable information about individuals or
entities unless such information is otherwise publicly
available; or
``(B) trade secrets with respect to any
entities.''.
SEC. 14. GAO STUDY ON PRICE-RELATED COMPENSATION ACROSS THE SUPPLY
CHAIN.
Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152),
as amended by section 13, is amended by adding at the end the following
new subsection:
``(h) GAO Study and Report on Price-Related Compensation and
Payment Structures in the Prescription Drug Supply Chain.--
``(1) Study.--The Comptroller General of the United States
(in this subsection referred to as the `Comptroller General')
shall conduct a study describing the use of compensation and
payment structures related to a prescription drug's price
within the retail prescription drug supply chain in this part.
Such study shall summarize information from Federal agencies
and industry experts, to the extent available, with respect to
the following:
``(A) The type, magnitude, other features (such as
the pricing benchmarks used), and prevalence of
compensation and payment structures related to a
prescription drug's price, such as calculating fee
amounts as a percentage of a prescription drug's price,
between intermediaries in the prescription drug supply
chain, including--
``(i) pharmacy benefit managers;
``(ii) part D plan sponsors;
``(iii) drug wholesalers;
``(iv) pharmacies;
``(v) manufacturers;
``(vi) pharmacy services administrative
organizations;
``(vii) brokers, auditors, consultants, and
other entities that advise part D plan sponsors
about pharmacy benefits or review part D plan
sponsor contracts with pharmacy benefit
managers; and
``(viii) other service providers that
contract with any of the entities described in
clauses (i) through (vii) that may use price-
related compensation and payment structures,
such as rebate aggregators (or other entities
that negotiate or process price concessions on
behalf of pharmacy benefit managers, plan
sponsors, or pharmacies).
``(B) The primary business models and compensation
structures for each category of intermediary described
in subparagraph (A).
``(C) Variation in price-related compensation
structures between affiliated entities (such as
entities with common ownership, either full or partial,
and subsidiary relationships) and unaffiliated
entities.
``(D) Potential conflicts of interest among
contracting entities related to the use of prescription
drug price-related compensation structures, such as the
potential for fees or other payments set as a
percentage of a prescription drug's price to advantage
formulary selection, distribution, or purchasing of
prescription drugs with higher prices.
``(E) Notable differences, if any, in the use and
level of price-based compensation structures over time
and between different market segments, such as under
this part and the Medicaid program under title XIX.
``(F) The effects of drug price-related
compensation structures and alternative compensation
structures on Federal health care programs and program
beneficiaries, including with respect to cost-sharing,
premiums, Federal outlays, biosimilar and generic drug
adoption and utilization, drug shortage risks, and the
potential for fees set as a percentage of a drug's
price to advantage the formulary selection,
distribution, or purchasing of drugs with higher
prices.
``(G) Other issues determined to be relevant and
appropriate by the Comptroller General.
``(2) Report.--Not later than 2 years after the date of
enactment of this subsection, the Comptroller General shall
submit to Congress a report containing the results of the study
conducted under paragraph (1), together with recommendations
for such legislation and administrative action as the
Comptroller General determines appropriate.''.
SEC. 15. REPORTS ON INAPPROPRIATE PHARMACY REJECTIONS.
Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152),
as amended by section 14, is amended by adding at the end the following
new subsection:
``(i) Biennial Report on Efforts To Address Inappropriate Pharmacy
Rejections and Inappropriate Coverage Denials Under Medicare Part D.--
``(1) In general.--Not later than January 1, 2026, and at
least once every 4 years thereafter, the Secretary, in
consultation with the Office of the Inspector General of the
Department of Health and Human Services, shall post, on a
publicly available website, a report related to preventing,
identifying, or addressing inappropriate pharmacy rejections
(as defined in paragraph (2)(B)) and inappropriate coverage
denials (as defined in paragraph (2)(A)) under this part. Such
reports shall include--
``(A) a description of programs, reviews, or
initiatives underway to prevent, identify, or address
such rejections and denials, in accordance with
existing authorities;
``(B) a summary of data collected or other
information available with respect to such rejections
and denials, including--
``(i) standards (if any such standards have
been adopted) used by the Secretary for
identifying PDP sponsors and MA organizations
with relatively high rates of such rejections
or denials; and
``(ii) notable longitudinal trends or other
patterns, as determined appropriate by the
Secretary;
``(C) an overview of corrective actions taken and
technical assistance provided by the Secretary in
response to violations of existing requirements with
respect to such rejections and denials; and
``(D) a description of barriers, if any, preventing
the Secretary from taking administrative actions
sufficient to identify and address such rejections and
denials.
``(2) Definitions.--For purposes of this subsection:
``(A) Inappropriate coverage denial.--The term
`inappropriate coverage denial' means a denial of
coverage of a covered part D drug claim that violates
the requirements of this part.
``(B) Inappropriate pharmacy rejections.--The term
`inappropriate pharmacy rejection' means a rejection of
a covered part D drug claim that violates the
requirements of this part, such as through the
application of utilization management requirements that
the Secretary has not approved.''.
SEC. 16. GAO STUDY ON DRUG SHORTAGES.
Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152),
as amended by section 15, is amended by adding at the end the following
new subsection:
``(j) GAO Study and Report on Drug Shortages.--
``(1) Study.--The Comptroller General of the United States
(in this subsection referred to as the `Comptroller General')
shall conduct a study on factors contributing to shortages of
covered part D drugs across the outpatient prescription drug
supply chain. Such study shall include analysis of--
``(A) common features of and trends in covered part
D drugs that have experienced at least 1 shortage (as
defined under section 506C of the Federal Food, Drug,
and Cosmetic Act);
``(B) patterns, trends, and variations in the
duration of shortages experienced by covered part D
drugs;
``(C) patterns, trends, and variations in the
proximate causes and other potential causes of
shortages experienced by covered part D drugs;
``(D) effects of such shortages on beneficiaries
enrolled in prescription drug plans under this part,
including with respect to access to covered part D
drugs and out-of-pocket costs; and
``(E) other issues determined appropriate by the
Comptroller General.
``(2) Report.--Not later than 2 years after the date of
enactment of this subsection, the Comptroller General shall
submit to Congress a report containing the results of the study
conducted under paragraph (1), together with recommendations
for such legislation and administrative action as the
Comptroller General determines appropriate.''.
SEC. 17. REPORT ON BIOSIMILAR AND GENERIC ACCESS UNDER MEDICARE PART D.
Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152),
as amended by section 16, is amended by adding at the end the following
new subsection:
``(k) OIG Report on Biosimilar and Generic Access Under Part D.--
``(1) Study.--The Office of the Inspector General of the
Department of Health and Human Services (referred to in this
subsection as the `Office of the Inspector General') shall
conduct a study on biosimilar and generic drug access and
adoption under prescription drug plans offered under this part,
including with respect to barriers to increased adoption and
utilization of lower-priced biosimilar and generic utilization,
plan features that discourage or encourage the utilization of
these products, and the gross and net spending effects of
policies that increased adoption of these products under this
part.
``(2) Report.--Not later than 1 year after the date of
enactment of this subsection, the Office of the Inspector
General shall publish a report on the study conducted under
paragraph (1).''.
SEC. 18. MEDICARE IMPROVEMENT FUND.
Section 1898(b)(1) of the Social Security Act (42 U.S.C.
1395iii(b)(1)) is amended by striking ``during and after fiscal year
2022, $180,000,000'' and inserting the following: ``during and after--
``(A) fiscal year 2022, $180,000,000; and
``(B) fiscal year 2028, $1,947,000,000''.
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