[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2214 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 2214
To improve services provided by pharmacy benefit managers.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 18, 2025
Mrs. Miller-Meeks (for herself, Ms. Barragan, Ms. Malliotakis, Mr.
Schneider, Mr. Allen, and Mr. Norcross) introduced the following bill;
which was referred to the Committee on Energy and Commerce, and in
addition to the Committees on Ways and Means, and Education and
Workforce, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To improve services provided by pharmacy benefit managers.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Delinking Revenue from Unfair
Gouging Act'' or the ``DRUG Act''.
SEC. 2. IMPROVING PHARMACY BENEFIT MANAGER SERVICES.
(a) Public Health Service Act.--Part D of title XXVII of the Public
Health Service Act (42 U.S.C. 300gg-111 et seq.) is amended by adding
at the end the following:
``SEC. 2799A-11. IMPROVING PHARMACY BENEFIT MANAGER SERVICES.
``(a) In General.--Beginning on January 1, 2027, except as provided
in subsection (b), a pharmacy benefit manager shall derive no
remuneration from any entity for services, benefit administration, or
any other activities related to prescription drug benefits under a
group health plan or group or individual health insurance coverage.
``(b) Exception for Bona Fide Service Fees.--
``(1) In general.--A pharmacy benefit manager may charge an
entity a bona fide service fee for the provision of services to
such entity only if such fee is set forth in an agreement
between the pharmacy benefit manager and such entity and the
amount of any bona fide service fee--
``(A) is a flat dollar amount; and
``(B) is not directly or indirectly based on, or
contingent upon--
``(i) a drug price (such as wholesale
acquisition cost) or drug benchmark price (such
as average wholesale price);
``(ii) the amount of discounts, rebates,
fees, or other direct or indirect remuneration
with respect to prescription drugs prescribed
to the participants, beneficiaries, or
enrollees in the group health plan or health
insurance coverage involved; or
``(iii) any other amounts specified by the
Secretary, the Secretary of Labor, and the
Secretary of the Treasury;
``(2) Definitions.--In this section--
``(A) the term `bona fide service fee' means a fee
that is equal to the fair market value of a bona fide,
itemized service that is 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 is not passed on in whole or in
part to a client or customer, whether or not the entity
takes title to the drug; and
``(B) the term `pharmacy benefit manager' means any
person, business, or other entity, such as a third-
party administrator, regardless of whether it
identifies itself as a pharmacy benefit manager, that,
either directly or through an intermediary (including
an affiliate, subsidiary, or agent) or an arrangement
with a third-party--
``(i) acts a price negotiator for
prescription drugs on behalf of a group health
plan or health insurance issuer offering group
or individual health insurance coverage; or
``(ii) manages or administers the
prescription drug benefits provided by a group
health plan or health insurance issuer offering
group or individual health insurance coverage,
including creating formularies, the processing
and payment of claims for prescription drugs,
arranging alternative access to or funding for
prescription drugs, the performance of drug
utilization review, the processing of drug
prior authorization requests, the adjudication
of appeals or grievances related to the
prescription drug benefit, contracting with
network pharmacies (including retail and mail
pharmacies), controlling the cost of covered
prescription drugs, or the provision of related
services.
``(c) Enforcement.--
``(1) In general.--The Secretary, in consultation with the
Secretary of Labor and the Secretary of the Treasury, shall
enforce this section.
``(2) Disgorgement.--The pharmacy benefit manager shall
disgorge to a group health plan or health insurance issuer
offering group or individual health insurance coverage any
payment, remuneration, or other amount received by the pharmacy
benefit manager or an affiliate of such pharmacy benefit
manager from such plan or issuer in violation of subsection (a)
or, pursuant to subsection (b), the agreement entered into with
such plan or issuer for bona fide service fees.
``(3) Penalties.--A pharmacy benefit manager that violates
subsection (a) or (b) shall be subject to a civil monetary
penalty in the amount of $10,000 for each day during which such
violation continues.
``(4) Procedure.--Notwithstanding section 2723, 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.
``(d) Regulations.--Notwithstanding any other provision of law, the
Secretary, in consultation with the Secretary of Labor and the
Secretary of the Treasury, shall implement this section through interim
final regulations.
``(e) Rules of Construction.--Nothing in this section shall be
construed--
``(1) as prohibiting payments related to reimbursement for
ingredient costs to entities that acquire prescription drugs or
pharmacy dispensing fees; and
``(2) to prohibit rebates, discounts, or other price
concessions from being fully passed through to a group health
plan or health insurance issuer offering group or individual
health insurance coverage to lower net costs for prescription
drugs.''.
(b) ERISA.--
(1) In general.--Subpart B of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1185 et seq.) is amended by inserting after section 725
the following:
``SEC. 726. IMPROVING PHARMACY BENEFIT MANAGER SERVICES.
``(a) General.--Beginning on January 1, 2027, except as provided in
subsection (b), a pharmacy benefit manager shall derive no remuneration
from any entity for services, benefit administration, or any other
activities related to prescription drug benefits under a group health
plan or group health insurance coverage.
``(b) Exception for Bona Fide Service Fees.--
``(1) In general.--A pharmacy benefit manager may charge an
entity a bona fide service fee for the provision of services to
an entity only if such fee is set forth in an agreement between
the pharmacy benefit manager and such entity and the amount of
any bona fide service fee--
``(A) is a flat dollar amount; and
``(B) is not directly or indirectly based on, or
contingent upon--
``(i) a drug price (such as wholesale
acquisition cost) or drug benchmark price (such
as average wholesale price);
``(ii) the amount of discounts, rebates,
fees, or other direct or indirect remuneration
with respect to prescription drugs prescribed
to the participants, beneficiaries, or
enrollees in the group health plan or health
insurance coverage involved; or
``(iii) any other amounts specified by the
Secretary, the Secretary of Health and Human
Services, and the Secretary of the Treasury.
``(2) Definitions.--In this section--
``(A) the term `bona fide service fee' means a fee
that is equal to the fair market value of a bona fide,
itemized service that is 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 is not passed on in whole or in
part to a client or customer, whether or not the entity
takes title to the drug; and
``(B) the term `pharmacy benefit manager' means any
person, business, or other entity, such as a third-
party administrator, regardless of whether it
identifies itself as a pharmacy benefit manager, that,
either directly or through an intermediary (including
an affiliate, subsidiary, or agent) or an arrangement
with a third-party--
``(i) acts a price negotiator for
prescription drugs on behalf of a group health
plan or health insurance issuer offering group
health insurance coverage; or
``(ii) manages or administers the
prescription drug benefits provided by a group
health plan or health insurance issuer offering
group health insurance coverage, including
creating formularies, the processing and
payment of claims for prescription drugs,
arranging alternative access to or funding for
prescription drugs, the performance of drug
utilization review, the processing of drug
prior authorization requests, the adjudication
of appeals or grievances related to the
prescription drug benefit, contracting with
network pharmacies (including retail and mail
pharmacies), controlling the cost of covered
prescription drugs, or the provision of related
services.
``(c) Enforcement.--The Secretary shall enforce this section as
provided for in section 502(c)(13).
``(d) Regulations.--Notwithstanding any other provision of law, the
Secretary, in consultation with the Secretary of Health and Human
Services and the Secretary of the Treasury, shall implement this
section through interim final regulations.
``(e) Rules of Construction.--Nothing in this section shall be
construed--
``(1) as prohibiting payments related to reimbursement for
ingredient costs to entities that acquire prescription drugs or
pharmacy dispensing fees; and
``(2) to prohibit rebates, discounts, or other price
concessions from being fully passed through to a group health
plan or health insurance issuer offering group health insurance
coverage to lower net costs for prescription drugs.''.
(2) Enforcement.--Section 502 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1132) is amended--
(A) in subsection (a)(6), by striking ``or (9)''
and inserting ``(9), or (13)''; and
(B) in subsection (c), by adding at the end the
following:
``(13) Secretarial Enforcement Authority Relating to Pharmacy
Benefit Manager Services.--
``(A) Disgorgement.--With respect to a violation of section
726 by a pharmacy benefit manager, such pharmacy benefit
manager shall disgorge to a group health plan or health
insurance issuer offering group health insurance coverage any
payment, remuneration, or other amount received by the pharmacy
benefit manager or an affiliate of such pharmacy benefit
manager from such plan or issuer in violation of subsection (a)
of such section or, pursuant to subsection (b) of such section,
the agreement entered into with such plan or issuer for bona
fide service fees.
``(B) Penalties.--A pharmacy benefit manager that violates
subsection (a) or (b) of section 726 shall be subject to a
civil monetary penalty in the amount of $10,000 for each day
during which such violation continues.
``(C) Procedure.--Except as provided in this paragraph, the
provisions of this section shall apply to civil monetary
penalties under this paragraph in the same manner as such
provisions apply to other civil penalties under this section.
``(D) Rule of construction.--Nothing in this paragraph
shall effect the authority of the Secretary under subsection
(a)(5).''.
(3) Clerical amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1001 et seq.) is amended by inserting after the item
relating to section 725 the following new item:
Sec. 726. Improving pharmacy benefit manager services.
(c) Internal Revenue Code of 1986.--
(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. IMPROVING PHARMACY BENEFIT MANAGER SERVICES.
``(a) In General.--Beginning on January 1, 2027, except as provided
in subsection (b), a pharmacy benefit manager shall derive no
remuneration from any entity for services, benefit administration, or
any other activities related to prescription drug benefits under a
group health plan.
``(b) Exception for Bona Fide Service Fees.--
``(1) In general.--A pharmacy benefit manager may charge an
entity a bona fide service fee for the provision of services to
such entity only if such fee is set forth in an agreement
between the pharmacy benefit manager and such entity and the
amount of any bona fide service fee--
``(A) is a flat dollar amount; and
``(B) is not directly or indirectly based on, or
contingent upon--
``(i) a drug price (such as wholesale
acquisition cost) or drug benchmark price (such
as average wholesale price);
``(ii) the amount of discounts, rebates,
fees, or other direct or indirect remuneration
with respect to prescription drugs prescribed
to the participants, beneficiaries, or
enrollees in the group health plan involved; or
``(iii) any other amounts specified by the
Secretary, the Secretary of Health and Human
Services, and the Secretary of the Labor.
``(2) Definitions.--In this section--
``(A) the term `bona fide service fee' means a fee
that is equal to the fair market value of a bona fide,
itemized service that is 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 is not passed on in whole or in
part to a client or customer, whether or not the entity
takes title to the drug; and
``(B) the term `pharmacy benefit manager' means any
person, business, or other entity such as a third-party
administrator, regardless of whether it identifies
itself as a pharmacy benefit manager, that, either
directly or through an intermediary (including an
affiliate, subsidiary, or agent) or an arrangement with
a third-party--
``(i) acts as a price negotiator for
prescription drugs on behalf of a group health
plan; or
``(ii) manages or administers the
prescription drug benefits provided by a group
health plan, including creating formularies,
the processing and payment of claims for
prescription drugs, arranging alternative
access to or funding for prescription drugs,
the performance of drug utilization review, the
processing of drug prior authorization
requests, the adjudication of appeals or
grievances related to the prescription drug
benefit, contracting with network pharmacies,
controlling the cost of covered prescription
drugs, or the provision of related services.
``(c) Enforcement.--
``(1) In general.--The Secretary, in consultation with the
Secretary of Health and Human Services and the Secretary of
Labor, shall enforce this section.
``(2) Disgorgement.--The pharmacy benefit manager shall
disgorge to a group health plan any payment, remuneration, or
other amount received by the pharmacy benefit manager or an
affiliate of such pharmacy benefit manager from such plan or
issuer in violation of subsection (a) or, pursuant to
subsection (b), the agreement entered into with such plan for
bona fide service fees.
``(3) Penalties.--A pharmacy benefit manager that violates
subsection (a) or (b) shall be subject to a civil monetary
penalty in the amount of $10,000 for each day during which such
violation continues.
``(4) Procedure.--The provisions of section 1128A of the
Social Security Act, other than 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.
``(d) Regulations.--Notwithstanding any other provision of law, the
Secretary, in consultation with the Secretary of Health and Human
Services and the Secretary of Labor, shall implement this section
through interim final regulations.''.
(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. Improving pharmacy benefit manager services.''.
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