[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 950 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 950
To amend title XVIII of the Social Security Act to establish pharmacy
benefit manager reporting requirements with respect to prescription
drug plans and MA-PD plans under Medicare part D.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 4, 2025
Mr. Landsman (for himself and Mrs. Harshbarger) introduced the
following bill; which was referred to the Committee on Energy and
Commerce, and in addition to the Committee on Ways and Means, 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 amend title XVIII of the Social Security Act to establish pharmacy
benefit manager reporting requirements with respect to prescription
drug plans and MA-PD plans 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 ``Saving Seniors Money on
Prescriptions Act''.
SEC. 2. PHARMACY BENEFIT MANAGER REPORTING REQUIREMENTS 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) Pharmacy Benefit Manager Reporting Requirements.--For plan
years beginning on or after January 1, 2028:
``(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) Transparency regarding guarantees and cost
performance evaluations.--The pharmacy benefit manager
shall--
``(i) define, interpret, and apply terms
(such as generic drug, brand name drug
(consistent with the definition of those terms
under section 423.4 of title 42, Code of
Federal Regulations, or a successor
regulation), specialty drug, rebate, and
discount) 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;
``(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 contract.
``(B) Provision of information.--
``(i) In general.--Not later than July 1 of
each year, the pharmacy benefit manager shall
submit to the PDP sponsor, and to the Secretary
upon request, a report, in accordance with this
subparagraph, and shall make such report
available to the sponsor at no cost to such
sponsor in a machine-readable format and, as
the Secretary may determine, other formats.
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 claims
described in item (bb) that
were dispensed using each type
of dispensing channel,
including retail, mail order,
specialty pharmacy, or other
types of pharmacies or
providers as defined by the
pharmacy benefit manager;
``(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 charged to
the plan for the drug 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 with 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 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 network of the
plan.
``(ee) The difference
between the average acquisition
cost of the affiliate that
initially acquires the drug and
the amount reported under
subclause (I)(jj) for each
drug.
``(ff) A list of
prescription drugs for which
the pharmacy benefit manager or
an affiliate of the pharmacy
benefit manager had a contract
or other arrangement with a
covered entity under section
340B of the Public Health
Service Act 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 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) 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).
``(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 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) 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).
``(V) Total gross spending on
prescription 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
prescription 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 pharmacies,
wholesalers, distributors, private
labelers, providers, group purchasing
organizations, health plans, or any
other entity that is an affiliate 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) Standard formats.--Not later than
June 1, 2025, the Secretary shall specify
standard formats for pharmacy benefit managers
to submit annual reports required under clause
(i).
``(iii) Confidentiality.--
``(I) In general.--Information
disclosed by a pharmacy benefit manager
or PDP sponsor under this subsection
that is not otherwise publicly
available 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:
``(aa) As the Secretary
determines to be necessary to
carry out this part.
``(bb) To permit the
Comptroller General to review
the information provided.
``(cc) To permit the
Director of the Congressional
Budget Office to review the
information provided.
``(dd) To permit the
Executive Director of the
Medicare Payment Advisory
Commission to review the
information provided.
``(ee) To the Attorney
General for the purposes of
conducting oversight and
enforcement under this title.
``(II) 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 subclause (I) to
the public in a manner that would
identify a specific pharmacy benefit
manager, affiliate, PDP sponsor, or
plan, or prices charged for specific
drugs.
``(C) 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 contract and the accuracy of information
reported under subparagraph (B).
``(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 (B), subject to reasonable
restrictions on how such information must be
reported (as determined by the Secretary) 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 (B)
that is owned or held by an affiliate of such
pharmacy benefit manager.
``(D) Enforcement.--The pharmacy benefit manager
shall--
``(i) 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
``(ii) 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) 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 (including an entity owned or
controlled by the PDP sponsor) or that acts as a
contractor or agent to such pharmacy benefit manager,
insofar as such contractor or agent performs any of the
functions described under subparagraph (B).
``(B) 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
services related thereto. 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) Pharmacy benefit manager reporting
requirements.--For plan years beginning on or after
January 1, 2028, section 1860D-12(h).''.
(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) State 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 clauses
(i) and (ii) overlap and conflict.
(D) The resources required by health plans and
pharmacy benefit managers to comply with the reporting
requirements described in clauses (i) and (ii).
(E) Other items determined appropriate by the
Comptroller General.
(2) Report.--Not later than 2 years after enactment, 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).
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