119-hr2214

[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.''.
 <all>