119-hr2450

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2450 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 2450

To amend the Public Health Service Act, the Employee Retirement Income 
Security Act of 1974, and the Internal Revenue Code of 1984 to increase 
 oversight of pharmacy benefit management services, and for other 
 purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 March 27, 2025

 Ms. McDonald Rivet (for herself, Mr. Carter of Georgia, Mr. Menendez, 
and Mr. James) introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees on 
 Education and Workforce, and 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 the Public Health Service Act, the Employee Retirement Income 
Security Act of 1974, and the Internal Revenue Code of 1984 to increase 
 oversight of pharmacy benefit management services, 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.

 This Act may be cited as the ``Prescription Drug Transparency and 
Affordability Act''.

SEC. 2. OVERSIGHT OF PHARMACY BENEFIT MANAGEMENT SERVICES.

    (a) Public Health Service Act.--Title XXVII of the Public Health 
Service Act (42 U.S.C. 300gg et seq.) is amended--

    (1) in part D (42 U.S.C. 300gg-111 et seq.), by adding at 
 the end the following new section:

``

SEC. 2799A-11. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT 
 MANAGEMENT SERVICES.

 ``

    (a) In General.--For plan years beginning on or after the date 
that is 30 months after the date of enactment of this section (referred 
to in this subsection and subsection

    (b) as the `effective date'), a 
group health plan or a health insurance issuer offering group health 
insurance coverage, or an entity providing pharmacy benefit management 
services on behalf of such a plan or issuer, shall not enter into a 
contract, including an extension or renewal of a contract, entered into 
on or after the effective date, with an applicable entity unless such 
applicable entity agrees to--
 ``

    (1) not limit or delay the disclosure of information to 
 the group health plan (including such a plan offered through a 
 health insurance issuer) in such a manner that prevents an 
 entity providing pharmacy benefit management services on behalf 
 of a group health plan or health insurance issuer offering 
 group health insurance coverage from making the reports 
 described in subsection

    (b) ; and
 ``

    (2) provide the entity providing pharmacy benefit 
 management services on behalf of a group health plan or health 
 insurance issuer relevant information necessary to make the 
 reports described in subsection

    (b) .
 ``

    (b) Reports.--
 ``

    (1) In general.--For plan years beginning on or after the 
 effective date, in the case of any contract between a group 
 health plan or a health insurance issuer offering group health 
 insurance coverage offered in connection with such a plan and 
 an entity providing pharmacy benefit management services on 
 behalf of such plan or issuer, including an extension or 
 renewal of such a contract, entered into on or after the 
 effective date, the entity providing pharmacy benefit 
 management services on behalf of such a group health plan or 
 health insurance issuer, not less frequently than every 6 
 months (or, at the request of a group health plan, not less 
 frequently than quarterly, and under the same conditions, 
 terms, and cost of the semiannual report under this 
 subsection), shall submit to the group health plan a report in 
 accordance with this section. Each such report shall be made 
 available to such group health plan in plain language, in a 
 machine-readable format, and as the Secretary may determine, 
 other formats. Each such report shall include the information 
 described in paragraph

    (2) .
 ``

    (2) Information described.--For purposes of paragraph

    (1) , the information described in this paragraph is, with 
 respect to drugs covered by a group health plan or group health 
 insurance coverage offered by a health insurance issuer in 
 connection with a group health plan during each reporting 
 period--
 ``
        (A) in the case of a group health plan that is 
 offered by a specified large employer or that is a 
 specified large plan, and is not offered as health 
 insurance coverage, or in the case of health insurance 
 coverage for which the election under paragraph

    (3) is 
 made for the applicable reporting period--
 ``
            (i) a list of drugs for which a claim was 
 filed and, with respect to each such drug on 
 such list--
 ``
            (I) the contracted compensation 
 paid by the group health plan or health 
 insurance issuer for each covered drug 
 (identified by the National Drug Code) 
 to the entity providing pharmacy 
 benefit management services or other 
 applicable entity on behalf of the 
 group health plan or health insurance 
 issuer;
 ``
            (II) the contracted compensation 
 paid to the pharmacy, by any entity 
 providing pharmacy benefit management 
 services or other applicable entity on 
 behalf of the group health plan or 
 health insurance issuer, for each 
 covered drug (identified by the 
 National Drug Code);
 ``
            (III) for each such claim, the 
 difference between the amount paid 
 under subclause
            (I) and the amount paid 
 under subclause
            (II) ;
 ``
            (IV) the proprietary name, 
 established name or proper name, and 
 National Drug Code;
 ``
            (V) for each claim for the drug 
 (including original prescriptions and 
 refills) and for each dosage unit of 
 the drug for which a claim was filed, 
 the type of dispensing channel used to 
 furnish the drug, including retail, 
 mail order, or specialty pharmacy;
 ``
            (VI) with respect to each drug 
 dispensed, for each type of dispensing 
 channel (including retail, mail order, 
 or specialty pharmacy)--
 ``

    (aa) whether such drug is 
 a brand name drug or a generic 
 drug, and--

 ``

    (AA) in the case 
 of a brand name drug, 
 the wholesale 
 acquisition cost, 
 listed as cost per days 
 supply and cost per 
 dosage unit, on the 
 date such drug was 
 dispensed; and

 ``

    (BB) in the case 
 of a generic drug, the 
 average wholesale 
 price, listed as cost 
 per days supply and 
 cost per dosage unit, 
 on the date such drug 
 was dispensed; and

 ``

    (bb) the total number 
 of--

 ``

    (AA) prescription 
 claims (including 
 original prescriptions 
 and refills);

 ``

    (BB) participants 
 and beneficiaries for 
 whom a claim for such 
 drug was filed through 
 the applicable 
 dispensing channel;

 ``
            (CC) dosage units 
 and dosage units per 
 fill of such drug; and

 ``
            (DD) days supply 
 of such drug per fill;

 ``
            (VII) the net price per course of 
 treatment or single fill, such as a 30-
 day supply or 90-day supply to the plan 
 or coverage after rebates, fees, 
 alternative discounts, or other 
 remuneration received from applicable 
 entities;
 ``
            (VIII) the total amount of out-
 of-pocket spending by participants and 
 beneficiaries on such drug, including 
 spending through copayments, 
 coinsurance, and deductibles, but not 
 including any amounts spent by 
 participants and beneficiaries on drugs 
 not covered under the plan or coverage, 
 or for which no claim is submitted 
 under the plan or coverage;
 ``
            (IX) the total net spending on 
 the drug;
 ``
            (X) the total amount received, or 
 expected to be received, by the plan or 
 issuer from any applicable entity in 
 rebates, fees, alternative discounts, 
 or other remuneration;
 ``
            (XI) the total amount received, 
 or expected to be received, by the 
 entity providing pharmacy benefit 
 management services, from applicable 
 entities, in rebates, fees, alternative 
 discounts, or other remuneration from 
 such entities--
 ``

    (aa) for claims incurred 
 during the reporting period; 
 and
 ``

    (bb) that is related to 
 utilization of such drug or 
 spending on such drug; and
 ``
            (XII) to the extent feasible, 
 information on the total amount of 
 remuneration for such drug, including 
 copayment assistance dollars paid, 
 copayment cards applied, or other 
 discounts provided by each drug 
 manufacturer (or entity administering 
 copayment assistance on behalf of such 
 drug manufacturer), to the participants 
 and beneficiaries enrolled in such plan 
 or coverage;
 ``
            (ii) a list of each therapeutic class (as 
 defined by the Secretary) for which a claim was 
 filed under the group health plan or health 
 insurance coverage during the reporting period, 
 and, with respect to each such therapeutic 
 class--
 ``
            (I) the total gross spending on 
 drugs in such class before rebates, 
 price concessions, alternative 
 discounts, or other remuneration from 
 applicable entities;
 ``
            (II) the net spending in such 
 class after such rebates, price 
 concessions, alternative discounts, or 
 other remuneration from applicable 
 entities;
 ``
            (III) the total amount received, 
 or expected to be received, by the 
 entity providing pharmacy benefit 
 management services, from applicable 
 entities, in rebates, fees, alternative 
 discounts, or other remuneration from 
 such entities--
 ``

    (aa) for claims incurred 
 during the reporting period; 
 and
 ``

    (bb) that is related to 
 utilization of drugs or drug 
 spending;
 ``
            (IV) the average net spending per 
 30-day supply and per 90-day supply by 
 the plan or by the issuer with respect 
 to such coverage and its participants 
 and beneficiaries, among all drugs 
 within the therapeutic class for which 
 a claim was filed during the reporting 
 period;
 ``
            (V) the number of participants 
 and beneficiaries who filled a 
 prescription for a drug in such class, 
 including the National Drug Code for 
 each such drug;
 ``
            (VI) if applicable, a description 
 of the formulary tiers and utilization 
 mechanisms (such as prior authorization 
 or step therapy) employed for drugs in 
 that class; and
 ``
            (VII) the total out-of-pocket 
 spending under the plan or coverage by 
 participants and beneficiaries, 
 including spending through copayments, 
 coinsurance, and deductibles, but not 
 including any amounts spent by 
 participants and beneficiaries on drugs 
 not covered under the plan or coverage 
 or for which no claim is submitted 
 under the plan or coverage;
 ``
            (iii) with respect to any drug for which 
 gross spending under the group health plan or 
 health insurance coverage exceeded $10,000 
 during the reporting period or, in the case 
 that gross spending under the group health plan 
 or coverage exceeded $10,000 during the 
 reporting period with respect to fewer than 50 
 drugs, with respect to the 50 prescription 
 drugs with the highest spending during the 
 reporting period--
 ``
            (I) a list of all other drugs in 
 the same therapeutic class as such 
 drug;
 ``
            (II) if applicable, the rationale 
 for the formulary placement of such 
 drug in that therapeutic category or 
 class, selected from a list of standard 
 rationales established by the 
 Secretary, in consultation with 
 stakeholders; and
 ``
            (III) any change in formulary 
 placement compared to the prior plan 
 year; and
 ``
            (iv) in the case that such plan or issuer 
 (or an entity providing pharmacy benefit 
 management services on behalf of such plan or 
 issuer) has an affiliated pharmacy or pharmacy 
 under common ownership, including mandatory 
 mail and specialty home delivery programs, 
 retail and mail auto-refill programs, and cost 
 sharing assistance incentives funded by an 
 entity providing pharmacy benefit services--
 ``
            (I) an explanation of any benefit 
 design parameters that encourage or 
 require participants and beneficiaries 
 in the plan or coverage to fill 
 prescriptions at mail order, specialty, 
 or retail pharmacies;
 ``
            (II) the percentage of total 
 prescriptions dispensed by such 
 pharmacies to participants or 
 beneficiaries in such plan or coverage; 
 and
 ``
            (III) a list of all drugs 
 dispensed by such pharmacies to 
 participants or beneficiaries enrolled 
 in such plan or coverage, and, with 
 respect to each drug dispensed--
 ``

    (aa) the amount charged, 
 per dosage unit, per 30-day 
 supply, or per 90-day supply 
 (as applicable) to the plan or 
 issuer, and to participants and 
 beneficiaries;
 ``

    (bb) the median amount 
 charged to such plan or issuer, 
 and the interquartile range of 
 the costs, per dosage unit, per 
 30-day supply, and per 90-day 
 supply, including amounts paid 
 by the participants and 
 beneficiaries, when the same 
 drug is dispensed by other 
 pharmacies that are not 
 affiliated with or under common 
 ownership with the entity and 
 that are included in the 
 pharmacy network of such plan 
 or coverage;
 ``
            (cc) the lowest cost per 
 dosage unit, per 30-day supply 
 and per 90-day supply, for each 
 such drug, including amounts 
 charged to the plan or coverage 
 and to participants and 
 beneficiaries, that is 
 available from any pharmacy 
 included in the network of such 
 plan or coverage; and
 ``
            (dd) the net acquisition 
 cost per dosage unit, per 30-
 day supply, and per 90-day 
 supply, if such drug is subject 
 to a maximum price discount; 
 and
 ``
        (B) with respect to any group health plan, 
 including group health insurance coverage offered in 
 connection with such a plan, regardless of whether the 
 plan or coverage is offered by a specified large 
 employer or whether it is a specified large plan--
 ``
            (i) a summary document for the group 
 health plan that includes such information 
 described in clauses
            (i) through
            (iv) of 
 subparagraph
        (A) , as specified by the Secretary 
 through guidance, program instruction, or 
 otherwise (with no requirement of notice and 
 comment rulemaking), that the Secretary 
 determines useful to group health plans for 
 purposes of selecting pharmacy benefit 
 management services, such as an estimated net 
 price to group health plan and participant or 
 beneficiary, a cost per claim, the fee 
 structure or reimbursement model, and estimated 
 cost per participant or beneficiary;
 ``
            (ii) a summary document for plans and 
 issuers to provide to participants and 
 beneficiaries, which shall be made available to 
 participants or beneficiaries upon request to 
 their group health plan (including in the case 
 of group health insurance coverage offered in 
 connection with such a plan), that--
 ``
            (I) contains such information 
 described in clauses
            (iii) ,
            (iv) ,
            (v) , 
 and
            (vi) , as applicable, as specified 
 by the Secretary through guidance, 
 program instruction, or otherwise (with 
 no requirement of notice and comment 
 rulemaking) that the Secretary 
 determines useful to participants or 
 beneficiaries in better understanding 
 the plan or coverage or benefits under 
 such plan or coverage;
 ``
            (II) contains only aggregate 
 information; and
 ``
            (III) states that participants 
 and beneficiaries may request specific, 
 claims-level information required to be 
 furnished under subsection
            (c) from the 
 group health plan or health insurance 
 issuer; and
 ``
            (iii) with respect to drugs covered by 
 such plan or coverage during such reporting 
 period--
 ``
            (I) the total net spending by the 
 plan or coverage for all such drugs;
 ``
            (II) the total amount received, 
 or expected to be received, by the plan 
 or issuer from any applicable entity in 
 rebates, fees, alternative discounts, 
 or other remuneration; and
 ``
            (III) to the extent feasible, 
 information on the total amount of 
 remuneration for such drugs, including 
 copayment assistance dollars paid, 
 copayment cards applied, or other 
 discounts provided by each drug 
 manufacturer (or entity administering 
 copayment assistance on behalf of such 
 drug manufacturer) to participants and 
 beneficiaries;
 ``
            (iv) amounts paid directly or indirectly 
 in rebates, fees, or any other type of 
 compensation (as defined in 

section 408

    (b)

    (2)
        (B)
            (ii) 
            (dd) (AA) of the Employee 
 Retirement Income Security Act) to brokerage 
 firms, brokers, consultants, advisors, or any 
 other individual or firm, for--
 ``
            (I) the referral of the group 
 health plan's or health insurance 
 issuer's business to an entity 
 providing pharmacy benefit management 
 services, including the identity of the 
 recipient of such amounts;
 ``
            (II) consideration of the entity 
 providing pharmacy benefit management 
 services by the group health plan or 
 health insurance issuer; or
 ``
            (III) the retention of the entity 
 by the group health plan or health 
 insurance issuer;
 ``
            (v) an explanation of any benefit design 
 parameters that encourage or require 
 participants and beneficiaries in such plan or 
 coverage to fill prescriptions at mail order, 
 specialty, or retail pharmacies that are 
 affiliated with or under common ownership with 
 the entity providing pharmacy benefit 
 management services under such plan or 
 coverage, including mandatory mail and 
 specialty home delivery programs, retail and 
 mail auto-refill programs, and cost-sharing 
 assistance incentives directly or indirectly 
 funded by such entity; and
 ``
            (vi) total gross spending on all drugs 
 under the plan or coverage during the reporting 
 period.
 ``

    (3) Opt-in for group health insurance coverage offered by 
 a specified large employer or that is a specified large plan.--
 In the case of group health insurance coverage offered in 
 connection with a group health plan that is offered by a 
 specified large employer or is a specified large plan, such 
 group health plan may, on an annual basis, for plan years 
 beginning on or after the date that is 30 months after the date 
 of enactment of this section, elect to require an entity 
 providing pharmacy benefit management services on behalf of the 
 health insurance issuer to submit to such group health plan a 
 report that includes all of the information described in 
 paragraph

    (2)
        (A) , in addition to the information described in 
 paragraph

    (2)
        (B) .
 ``

    (4) Privacy requirements.--
 ``
        (A) In general.--An entity providing pharmacy 
 benefit management services on behalf of a group health 
 plan or a health insurance issuer offering group health 
 insurance coverage shall report information under 
 paragraph

    (1) in a manner consistent with the privacy 
 regulations promulgated under 

section 13402

    (a) of the 
 Health Information Technology for Economic and Clinical 
 Health Act and consistent with the privacy regulations 
 promulgated under the Health Insurance Portability and 
 Accountability Act of 1996 in part 160 and subparts A 
 and E of part 164 of title 45, Code of Federal 
 Regulations (or successor regulations) (referred to in 
 this paragraph as the `HIPAA privacy regulations') and 
 shall restrict the use and disclosure of such 
 information according to such privacy regulations and 
 such HIPAA privacy regulations.
 ``
        (B) Additional requirements.--
 ``
            (i) In general.--An entity providing 
 pharmacy benefit management services on behalf 
 of a group health plan or health insurance 
 issuer offering group health insurance coverage 
 that submits a report under paragraph

    (1) shall 
 ensure that such report contains only summary 
 health information, as defined in 

section 164.504

    (a) of title 45, Code of Federal 
 Regulations (or successor regulations).
 ``
            (ii) Restrictions.--In carrying out this 
 subsection, a group health plan shall comply 
 with 

section 164.504

    (f) of title 45, Code of 
 Federal Regulations (or a successor 
 regulation), and a plan sponsor shall act in 
 accordance with the terms of the agreement 
 described in such section.
 ``
            (C) Rule of construction.--
 ``
            (i) Nothing in this section shall be 
 construed to modify the requirements for the 
 creation, receipt, maintenance, or transmission 
 of protected health information under the HIPAA 
 privacy regulations.
 ``
            (ii) Nothing in this section shall be 
 construed to affect the application of any 
 Federal or State privacy or civil rights law, 
 including the HIPAA privacy regulations, the 
 Genetic Information Nondiscrimination Act of 
 2008 (Public Law 110-233) (including the 
 amendments made by such Act), the Americans 
 with Disabilities Act of 1990 (42 U.S.C. 12101 
 et sec), 

section 504 of the Rehabilitation Act 
 of 1973 (29 U.S.C. 794), 

section 1557 of the 
 Patient Protection and Affordable Care Act (42 
 U.S.C. 18116), title VI of the Civil Rights Act 
 of 1964 (42 U.S.C. 2000d), and title VII of the 
 Civil Rights Act of 1964 (42 U.S.C. 2000e).
 ``
            (D) Written notice.--Each plan year, group health 
 plans, including with respect to group health insurance 
 coverage offered in connection with a group health 
 plan, shall provide to each participant or beneficiary 
 written notice informing the participant or beneficiary 
 of the requirement for entities providing pharmacy 
 benefit management services on behalf of the group 
 health plan or health insurance issuer offering group 
 health insurance coverage to submit reports to group 
 health plans under paragraph

    (1) , as applicable, which 
 may include incorporating such notification in plan 
 documents provided to the participant or beneficiary, 
 or providing individual notification.
 ``
        (E) Limitation to business associates.--A group 
 health plan receiving a report under paragraph

    (1) may 
 disclose such information only to the entity from which 
 the report was received or to that entity's business 
 associates as defined in 

section 160.103 of title 45, 
 Code of Federal Regulations (or successor regulations) 
 or as permitted by the HIPAA privacy regulations.
 ``
        (F) Clarification regarding public disclosure of 
 information.--Nothing in this section shall prevent an 
 entity providing pharmacy benefit management services 
 on behalf of a group health plan or health insurance 
 issuer offering group health insurance coverage, from 
 placing reasonable restrictions on the public 
 disclosure of the information contained in a report 
 described in paragraph

    (1) , except that such plan, 
 issuer, or entity may not--
 ``
            (i) restrict disclosure of such report to 
 the Department of Health and Human Services, 
 the Department of Labor, or the Department of 
 the Treasury; or
 ``
            (ii) prevent disclosure for the purposes 
 of subsection
            (c) , or any other public 
 disclosure requirement under this section.
 ``
        (G) Limited form of report.--The Secretary shall 
 define through rulemaking a limited form of the report 
 under paragraph

    (1) required with respect to any group 
 health plan established by a plan sponsor that is, or 
 is affiliated with, a drug manufacturer, drug 
 wholesaler, or other direct participant in the drug 
 supply chain, in order to prevent anti-competitive 
 behavior.
 ``

    (5) Standard format and regulations.--
 ``
        (A) In general.--Not later than 18 months after 
 the date of enactment of this section, the Secretary 
 shall specify through rulemaking a standard format for 
 entities providing pharmacy benefit management services 
 on behalf of group health plans and health insurance 
 issuers offering group health insurance coverage, to 
 submit reports required under paragraph

    (1) .
 ``
        (B) Additional regulations.--Not later than 18 
 months after the date of enactment of this section, the 
 Secretary shall, through rulemaking, promulgate any 
 other final regulations necessary to implement the 
 requirements of this section. In promulgating such 
 regulations, the Secretary shall, to the extent 
 practicable, align the reporting requirements under 
 this section with the reporting requirements under 
 

section 2799A-10.
 ``
            (c) Requirement To Provide Information to Participants or 
Beneficiaries.--A group health plan, including with respect to group 
health insurance coverage offered in connection with a group health 
plan, upon request of a participant or beneficiary, shall provide to 
such participant or beneficiary--
 ``

    (1) the summary document described in subsection

    (b)

    (2)
        (B)
            (ii) ; and
 ``

    (2) the information described in subsection

    (b)

    (2)
        (A)
            (i) 
            (III) with respect to a claim made by or on behalf 
 of such participant or beneficiary.
 ``
            (d) Enforcement.--
 ``

    (1) In general.--The Secretary shall enforce this 
 section. The enforcement authority under this subsection shall 
 apply only with respect to group health plans (including group 
 health insurance coverage offered in connection with such a 
 plan) to which the requirements of subparts I and II of part A 
 and part D apply in accordance with 

section 2722, and with 
 respect to entities providing pharmacy benefit management 
 services on behalf of such plans and applicable entities 
 providing services on behalf of such plans.
 ``

    (2) Failure to provide information.--A group health plan, 
 a health insurance issuer offering group health insurance 
 coverage, an entity providing pharmacy benefit management 
 services on behalf of such a plan or issuer, or an applicable 
 entity providing services on behalf of such a plan or issuer 
 that violates subsection

    (a) ; an entity providing pharmacy 
 benefit management services on behalf of such a plan or issuer 
 that fails to provide the information required under subsection

    (b) ; or a group health plan that fails to provide the 
 information required under subsection
            (c) , shall be subject to 
 a civil monetary penalty in the amount of $10,000 for each day 
 during which such violation continues or such information is 
 not disclosed or reported.
 ``

    (3) False information.--A health insurance issuer, an 
 entity providing pharmacy benefit management services, or a 
 third party administrator providing services on behalf of such 
 issuer offered by a health insurance issuer that knowingly 
 provides false information under this section shall be subject 
 to a civil monetary penalty in an amount not to exceed $100,000 
 for each item of false information. Such civil monetary penalty 
 shall be in addition to other penalties as may be prescribed by 
 law.
 ``

    (4) Procedure.--The provisions of 

section 1128A of the 
 Social Security Act, other than subsections

    (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 such section.
 ``

    (5) Waivers.--The Secretary may waive penalties under 
 paragraph

    (2) , or extend the period of time for compliance with 
 a requirement of this section, for an entity in violation of 
 this section that has made a good-faith effort to comply with 
 the requirements in this section.
 ``

    (e) Rule of Construction.--Nothing in this section shall be 
construed to permit a health insurance issuer, group health plan, 
entity providing pharmacy benefit management services on behalf of a 
group health plan or health insurance issuer, or other entity to 
restrict disclosure to, or otherwise limit the access of, the Secretary 
to a report described in subsection

    (b)

    (1) or information related to 
compliance with subsections

    (a) ,

    (b) ,
            (c) , or
            (d) by such issuer, plan, 
or entity.
 ``

    (f) 

=== Definitions. ===
-In this section:
 ``

    (1) Applicable entity.--The term `applicable entity' 
 means--
 ``
        (A) an applicable group purchasing organization, 
 drug manufacturer, distributor, wholesaler, rebate 
 aggregator (or other purchasing entity designed to 
 aggregate rebates), or associated third party;
 ``
        (B) any subsidiary, parent, affiliate, or 
 subcontractor of a group health plan, health insurance 
 issuer, entity that provides pharmacy benefit 
 management services on behalf of such a plan or issuer, 
 or any entity described in subparagraph
        (A) ; or
 ``
            (C) such other entity as the Secretary may 
 specify through rulemaking.
 ``

    (2) Applicable group purchasing organization.--The term 
 `applicable group purchasing organization' means a group 
 purchasing organization that is affiliated with or under common 
 ownership with an entity providing pharmacy benefit management 
 services.
 ``

    (3) Contracted compensation.--The term `contracted 
 compensation' means the sum of any ingredient cost and 
 dispensing fee for a drug (inclusive of the out-of-pocket costs 
 to the participant or beneficiary), or another analogous 
 compensation structure that the Secretary may specify through 
 regulations.
 ``

    (4) Gross spending.--The term `gross spending', with 
 respect to prescription drug benefits under a group health plan 
 or health insurance coverage, means the amount spent by a group 
 health plan or health insurance issuer on prescription drug 
 benefits, calculated before the application of rebates, fees, 
 alternative discounts, or other remuneration.
 ``

    (5) Net spending.--The term `net spending', with respect 
 to prescription drug benefits under a group health plan or 
 health insurance coverage, means the amount spent by a group 
 health plan or health insurance issuer on prescription drug 
 benefits, calculated after the application of rebates, fees, 
 alternative discounts, or other remuneration.
 ``

    (6) Plan sponsor.--The term `plan sponsor' has the 
 meaning given such term in 

section 3

    (16)
        (B) of the Employee 
 Retirement Income Security Act of 1974.
 ``

    (7) Remuneration.--The term `remuneration' has the 
 meaning given such term by the Secretary through rulemaking, 
 which shall be reevaluated by the Secretary every 5 years.
 ``

    (8) Specified large employer.--The term `specified large 
 employer' means, in connection with a group health plan 
 (including group health insurance coverage offered in 
 connection with such a plan) established or maintained by a 
 single employer, with respect to a calendar year or a plan 
 year, as applicable, an employer who employed an average of at 
 least 100 employees on business days during the preceding 
 calendar year or plan year and who employs at least 1 employee 
 on the first day of the calendar year or plan year.
 ``

    (9) Specified large plan.--The term `specified large 
 plan' means a group health plan (including group health 
 insurance coverage offered in connection with such a plan) 
 established or maintained by a plan sponsor described in clause
            (ii) or
            (iii) of 

section 3

    (16)
        (B) of the Employee Retirement 
 Income Security Act of 1974 that had an average of at least 100 
 participants on business days during the preceding calendar 
 year or plan year, as applicable.
 ``

    (10) Wholesale acquisition cost.--The term `wholesale 
 acquisition cost' has the meaning given such term in 

section 1847A
            (c) (6)
        (B) of the Social Security Act.''; and

    (2) in 

section 2723 (42 U.S.C. 300gg-22)--
        (A) in subsection

    (a) --
            (i) in paragraph

    (1) , by inserting ``(other 
 than 

section 2799A-11)'' after ``part D''; and
            (ii) in paragraph

    (2) , by inserting 
 ``(other than 

section 2799A-11)'' after ``part 
 D''; and
        (B) in subsection

    (b) --
            (i) in paragraph

    (1) , by inserting ``(other 
 than 

section 2799A-11)'' after ``part D'';
            (ii) in paragraph

    (2)
        (A) , by inserting 
 ``(other than 

section 2799A-11)'' after ``part 
 D''; and
            (iii) in paragraph

    (2)
            (C) 
            (ii) , by inserting 
 ``(other than 

section 2799A-11)'' after ``part 
 D''.

    (b) Employee Retirement Income Security Act of 1974.--

    (1) In general.--Subtitle B of title I of the Employee 
 Retirement Income Security Act of 1974 (29 U.S.C. 1021 et seq.) 
 is amended--
        (A) in subpart B of part 7 (29 U.S.C. 1185 et 
 seq.), by adding at the end the following:

``

SEC. 726. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT 
 MANAGEMENT SERVICES.

 ``

    (a) In General.--For plan years beginning on or after the date 
that is 30 months after the date of enactment of this section (referred 
to in this subsection and subsection

    (b) as the `effective date'), a 
group health plan or a health insurance issuer offering group health 
insurance coverage, or an entity providing pharmacy benefit management 
services on behalf of such a plan or issuer, shall not enter into a 
contract, including an extension or renewal of a contract, entered into 
on or after the effective date, with an applicable entity unless such 
applicable entity agrees to--
 ``

    (1) not limit or delay the disclosure of information to 
 the group health plan (including such a plan offered through a 
 health insurance issuer) in such a manner that prevents an 
 entity providing pharmacy benefit management services on behalf 
 of a group health plan or health insurance issuer offering 
 group health insurance coverage from making the reports 
 described in subsection

    (b) ; and
 ``

    (2) provide the entity providing pharmacy benefit 
 management services on behalf of a group health plan or health 
 insurance issuer relevant information necessary to make the 
 reports described in subsection

    (b) .
 ``

    (b) Reports.--
 ``

    (1) In general.--For plan years beginning on or after the 
 effective date, in the case of any contract between a group 
 health plan or a health insurance issuer offering group health 
 insurance coverage offered in connection with such a plan and 
 an entity providing pharmacy benefit management services on 
 behalf of such plan or issuer, including an extension or 
 renewal of such a contract, entered into on or after the 
 effective date, the entity providing pharmacy benefit 
 management services on behalf of such a group health plan or 
 health insurance issuer, not less frequently than every 6 
 months (or, at the request of a group health plan, not less 
 frequently than quarterly, and under the same conditions, 
 terms, and cost of the semiannual report under this 
 subsection), shall submit to the group health plan a report in 
 accordance with this section. Each such report shall be made 
 available to such group health plan in plain language, in a 
 machine-readable format, and as the Secretary may determine, 
 other formats. Each such report shall include the information 
 described in paragraph

    (2) .
 ``

    (2) Information described.--For purposes of paragraph

    (1) , the information described in this paragraph is, with 
 respect to drugs covered by a group health plan or group health 
 insurance coverage offered by a health insurance issuer in 
 connection with a group health plan during each reporting 
 period--
 ``
        (A) in the case of a group health plan that is 
 offered by a specified large employer or that is a 
 specified large plan, and is not offered as health 
 insurance coverage, or in the case of health insurance 
 coverage for which the election under paragraph

    (3) is 
 made for the applicable reporting period--
 ``
            (i) a list of drugs for which a claim was 
 filed and, with respect to each such drug on 
 such list--
 ``
            (I) the contracted compensation 
 paid by the group health plan or health 
 insurance issuer for each covered drug 
 (identified by the National Drug Code) 
 to the entity providing pharmacy 
 benefit management services or other 
 applicable entity on behalf of the 
 group health plan or health insurance 
 issuer;
 ``
            (II) the contracted compensation 
 paid to the pharmacy, by any entity 
 providing pharmacy benefit management 
 services or other applicable entity on 
 behalf of the group health plan or 
 health insurance issuer, for each 
 covered drug (identified by the 
 National Drug Code);
 ``
            (III) for each such claim, the 
 difference between the amount paid 
 under subclause
            (I) and the amount paid 
 under subclause
            (II) ;
 ``
            (IV) the proprietary name, 
 established name or proper name, and 
 National Drug Code;
 ``
            (V) for each claim for the drug 
 (including original prescriptions and 
 refills) and for each dosage unit of 
 the drug for which a claim was filed, 
 the type of dispensing channel used to 
 furnish the drug, including retail, 
 mail order, or specialty pharmacy;
 ``
            (VI) with respect to each drug 
 dispensed, for each type of dispensing 
 channel (including retail, mail order, 
 or specialty pharmacy)--
 ``

    (aa) whether such drug is 
 a brand name drug or a generic 
 drug, and--

 ``

    (AA) in the case 
 of a brand name drug, 
 the wholesale 
 acquisition cost, 
 listed as cost per days 
 supply and cost per 
 dosage unit, on the 
 date such drug was 
 dispensed; and

 ``

    (BB) in the case 
 of a generic drug, the 
 average wholesale 
 price, listed as cost 
 per days supply and 
 cost per dosage unit, 
 on the date such drug 
 was dispensed; and

 ``

    (bb) the total number 
 of--

 ``

    (AA) prescription 
 claims (including 
 original prescriptions 
 and refills);

 ``

    (BB) participants 
 and beneficiaries for 
 whom a claim for such 
 drug was filed through 
 the applicable 
 dispensing channel;

 ``
            (CC) dosage units 
 and dosage units per 
 fill of such drug; and

 ``
            (DD) days supply 
 of such drug per fill;

 ``
            (VII) the net price per course of 
 treatment or single fill, such as a 30-
 day supply or 90-day supply to the plan 
 or coverage after rebates, fees, 
 alternative discounts, or other 
 remuneration received from applicable 
 entities;
 ``
            (VIII) the total amount of out-
 of-pocket spending by participants and 
 beneficiaries on such drug, including 
 spending through copayments, 
 coinsurance, and deductibles, but not 
 including any amounts spent by 
 participants and beneficiaries on drugs 
 not covered under the plan or coverage, 
 or for which no claim is submitted 
 under the plan or coverage;
 ``
            (IX) the total net spending on 
 the drug;
 ``
            (X) the total amount received, or 
 expected to be received, by the plan or 
 issuer from any applicable entity in 
 rebates, fees, alternative discounts, 
 or other remuneration;
 ``
            (XI) the total amount received, 
 or expected to be received, by the 
 entity providing pharmacy benefit 
 management services, from applicable 
 entities, in rebates, fees, alternative 
 discounts, or other remuneration from 
 such entities--
 ``

    (aa) for claims incurred 
 during the reporting period; 
 and
 ``

    (bb) that is related to 
 utilization of such drug or 
 spending on such drug; and
 ``
            (XII) to the extent feasible, 
 information on the total amount of 
 remuneration for such drug, including 
 copayment assistance dollars paid, 
 copayment cards applied, or other 
 discounts provided by each drug 
 manufacturer (or entity administering 
 copayment assistance on behalf of such 
 drug manufacturer), to the participants 
 and beneficiaries enrolled in such plan 
 or coverage;
 ``
            (ii) a list of each therapeutic class (as 
 defined by the Secretary) for which a claim was 
 filed under the group health plan or health 
 insurance coverage during the reporting period, 
 and, with respect to each such therapeutic 
 class--
 ``
            (I) the total gross spending on 
 drugs in such class before rebates, 
 price concessions, alternative 
 discounts, or other remuneration from 
 applicable entities;
 ``
            (II) the net spending in such 
 class after such rebates, price 
 concessions, alternative discounts, or 
 other remuneration from applicable 
 entities;
 ``
            (III) the total amount received, 
 or expected to be received, by the 
 entity providing pharmacy benefit 
 management services, from applicable 
 entities, in rebates, fees, alternative 
 discounts, or other remuneration from 
 such entities--
 ``

    (aa) for claims incurred 
 during the reporting period; 
 and
 ``

    (bb) that is related to 
 utilization of drugs or drug 
 spending;
 ``
            (IV) the average net spending per 
 30-day supply and per 90-day supply by 
 the plan or by the issuer with respect 
 to such coverage and its participants 
 and beneficiaries, among all drugs 
 within the therapeutic class for which 
 a claim was filed during the reporting 
 period;
 ``
            (V) the number of participants 
 and beneficiaries who filled a 
 prescription for a drug in such class, 
 including the National Drug Code for 
 each such drug;
 ``
            (VI) if applicable, a description 
 of the formulary tiers and utilization 
 mechanisms (such as prior authorization 
 or step therapy) employed for drugs in 
 that class; and
 ``
            (VII) the total out-of-pocket 
 spending under the plan or coverage by 
 participants and beneficiaries, 
 including spending through copayments, 
 coinsurance, and deductibles, but not 
 including any amounts spent by 
 participants and beneficiaries on drugs 
 not covered under the plan or coverage 
 or for which no claim is submitted 
 under the plan or coverage;
 ``
            (iii) with respect to any drug for which 
 gross spending under the group health plan or 
 health insurance coverage exceeded $10,000 
 during the reporting period or, in the case 
 that gross spending under the group health plan 
 or coverage exceeded $10,000 during the 
 reporting period with respect to fewer than 50 
 drugs, with respect to the 50 prescription 
 drugs with the highest spending during the 
 reporting period--
 ``
            (I) a list of all other drugs in 
 the same therapeutic class as such 
 drug;
 ``
            (II) if applicable, the rationale 
 for the formulary placement of such 
 drug in that therapeutic category or 
 class, selected from a list of standard 
 rationales established by the 
 Secretary, in consultation with 
 stakeholders; and
 ``
            (III) any change in formulary 
 placement compared to the prior plan 
 year; and
 ``
            (iv) in the case that such plan or issuer 
 (or an entity providing pharmacy benefit 
 management services on behalf of such plan or 
 issuer) has an affiliated pharmacy or pharmacy 
 under common ownership, including mandatory 
 mail and specialty home delivery programs, 
 retail and mail auto-refill programs, and cost 
 sharing assistance incentives funded by an 
 entity providing pharmacy benefit services--
 ``
            (I) an explanation of any benefit 
 design parameters that encourage or 
 require participants and beneficiaries 
 in the plan or coverage to fill 
 prescriptions at mail order, specialty, 
 or retail pharmacies;
 ``
            (II) the percentage of total 
 prescriptions dispensed by such 
 pharmacies to participants or 
 beneficiaries in such plan or coverage; 
 and
 ``
            (III) a list of all drugs 
 dispensed by such pharmacies to 
 participants or beneficiaries enrolled 
 in such plan or coverage, and, with 
 respect to each drug dispensed--
 ``

    (aa) the amount charged, 
 per dosage unit, per 30-day 
 supply, or per 90-day supply 
 (as applicable) to the plan or 
 issuer, and to participants and 
 beneficiaries;
 ``

    (bb) the median amount 
 charged to such plan or issuer, 
 and the interquartile range of 
 the costs, per dosage unit, per 
 30-day supply, and per 90-day 
 supply, including amounts paid 
 by the participants and 
 beneficiaries, when the same 
 drug is dispensed by other 
 pharmacies that are not 
 affiliated with or under common 
 ownership with the entity and 
 that are included in the 
 pharmacy network of such plan 
 or coverage;
 ``
            (cc) the lowest cost per 
 dosage unit, per 30-day supply 
 and per 90-day supply, for each 
 such drug, including amounts 
 charged to the plan or coverage 
 and to participants and 
 beneficiaries, that is 
 available from any pharmacy 
 included in the network of such 
 plan or coverage; and
 ``
            (dd) the net acquisition 
 cost per dosage unit, per 30-
 day supply, and per 90-day 
 supply, if such drug is subject 
 to a maximum price discount; 
 and
 ``
        (B) with respect to any group health plan, 
 including group health insurance coverage offered in 
 connection with such a plan, regardless of whether the 
 plan or coverage is offered by a specified large 
 employer or whether it is a specified large plan--
 ``
            (i) a summary document for the group 
 health plan that includes such information 
 described in clauses
            (i) through
            (iv) of 
 subparagraph
        (A) , as specified by the Secretary 
 through guidance, program instruction, or 
 otherwise (with no requirement of notice and 
 comment rulemaking), that the Secretary 
 determines useful to group health plans for 
 purposes of selecting pharmacy benefit 
 management services, such as an estimated net 
 price to group health plan and participant or 
 beneficiary, a cost per claim, the fee 
 structure or reimbursement model, and estimated 
 cost per participant or beneficiary;
 ``
            (ii) a summary document for plans and 
 issuers to provide to participants and 
 beneficiaries, which shall be made available to 
 participants or beneficiaries upon request to 
 their group health plan (including in the case 
 of group health insurance coverage offered in 
 connection with such a plan), that--
 ``
            (I) contains such information 
 described in clauses
            (iii) ,
            (iv) ,
            (v) , 
 and
            (vi) , as applicable, as specified 
 by the Secretary through guidance, 
 program instruction, or otherwise (with 
 no requirement of notice and comment 
 rulemaking) that the Secretary 
 determines useful to participants or 
 beneficiaries in better understanding 
 the plan or coverage or benefits under 
 such plan or coverage;
 ``
            (II) contains only aggregate 
 information; and
 ``
            (III) states that participants 
 and beneficiaries may request specific, 
 claims-level information required to be 
 furnished under subsection
            (c) from the 
 group health plan or health insurance 
 issuer;
 ``
            (iii) with respect to drugs covered by 
 such plan or coverage during such reporting 
 period--
 ``
            (I) the total net spending by the 
 plan or coverage for all such drugs;
 ``
            (II) the total amount received, 
 or expected to be received, by the plan 
 or issuer from any applicable entity in 
 rebates, fees, alternative discounts, 
 or other remuneration; and
 ``
            (III) to the extent feasible, 
 information on the total amount of 
 remuneration for such drugs, including 
 copayment assistance dollars paid, 
 copayment cards applied, or other 
 discounts provided by each drug 
 manufacturer (or entity administering 
 copayment assistance on behalf of such 
 drug manufacturer) to participants and 
 beneficiaries;
 ``
            (iv) amounts paid directly or indirectly 
 in rebates, fees, or any other type of 
 compensation (as defined in 

section 408

    (b)

    (2)
        (B)
            (ii) 
            (dd) (AA) ) to brokerage firms, 
 brokers, consultants, advisors, or any other 
 individual or firm, for--
 ``
            (I) the referral of the group 
 health plan's or health insurance 
 issuer's business to an entity 
 providing pharmacy benefit management 
 services, including the identity of the 
 recipient of such amounts;
 ``
            (II) consideration of the entity 
 providing pharmacy benefit management 
 services by the group health plan or 
 health insurance issuer; or
 ``
            (III) the retention of the entity 
 by the group health plan or health 
 insurance issuer;
 ``
            (v) an explanation of any benefit design 
 parameters that encourage or require 
 participants and beneficiaries in such plan or 
 coverage to fill prescriptions at mail order, 
 specialty, or retail pharmacies that are 
 affiliated with or under common ownership with 
 the entity providing pharmacy benefit 
 management services under such plan or 
 coverage, including mandatory mail and 
 specialty home delivery programs, retail and 
 mail auto-refill programs, and cost-sharing 
 assistance incentives directly or indirectly 
 funded by such entity; and
 ``
            (vi) total gross spending on all drugs 
 under the plan or coverage during the reporting 
 period.
 ``

    (3) Opt-in for group health insurance coverage offered by 
 a specified large employer or that is a specified large plan.--
 In the case of group health insurance coverage offered in 
 connection with a group health plan that is offered by a 
 specified large employer or is a specified large plan, such 
 group health plan may, on an annual basis, for plan years 
 beginning on or after the date that is 30 months after the date 
 of enactment of this section, elect to require an entity 
 providing pharmacy benefit management services on behalf of the 
 health insurance issuer to submit to such group health plan a 
 report that includes all of the information described in 
 paragraph

    (2)
        (A) , in addition to the information described in 
 paragraph

    (2)
        (B) .
 ``

    (4) Privacy requirements.--
 ``
        (A) In general.--An entity providing pharmacy 
 benefit management services on behalf of a group health 
 plan or a health insurance issuer offering group health 
 insurance coverage shall report information under 
 paragraph

    (1) in a manner consistent with the privacy 
 regulations promulgated under 

section 13402

    (a) of the 
 Health Information Technology for Economic and Clinical 
 Health Act (42 U.S.C. 17932

    (a) ) and consistent with the 
 privacy regulations promulgated under the Health 
 Insurance Portability and Accountability Act of 1996 in 
 part 160 and subparts A and E of part 164 of title 45, 
 Code of Federal Regulations (or successor regulations) 
 (referred to in this paragraph as the `HIPAA privacy 
 regulations') and shall restrict the use and disclosure 
 of such information according to such privacy 
 regulations and such HIPAA privacy regulations.
 ``
        (B) Additional requirements.--
 ``
            (i) In general.--An entity providing 
 pharmacy benefit management services on behalf 
 of a group health plan or health insurance 
 issuer offering group health insurance coverage 
 that submits a report under paragraph

    (1) shall 
 ensure that such report contains only summary 
 health information, as defined in 

section 164.504

    (a) of title 45, Code of Federal 
 Regulations (or successor regulations).
 ``
            (ii) Restrictions.--In carrying out this 
 subsection, a group health plan shall comply 
 with 

section 164.504

    (f) of title 45, Code of 
 Federal Regulations (or a successor 
 regulation), and a plan sponsor shall act in 
 accordance with the terms of the agreement 
 described in such section.
 ``
            (C) Rule of construction.--
 ``
            (i) Nothing in this section shall be 
 construed to modify the requirements for the 
 creation, receipt, maintenance, or transmission 
 of protected health information under the HIPAA 
 privacy regulations.
 ``
            (ii) Nothing in this section shall be 
 construed to affect the application of any 
 Federal or State privacy or civil rights law, 
 including the HIPAA privacy regulations, the 
 Genetic Information Nondiscrimination Act of 
 2008 (Public Law 110-233) (including the 
 amendments made by such Act), the Americans 
 with Disabilities Act of 1990 (42 U.S.C. 12101 
 et sec), 

section 504 of the Rehabilitation Act 
 of 1973 (29 U.S.C. 794), 

section 1557 of the 
 Patient Protection and Affordable Care Act (42 
 U.S.C. 18116), title VI of the Civil Rights Act 
 of 1964 (42 U.S.C. 2000d), and title VII of the 
 Civil Rights Act of 1964 (42 U.S.C. 2000e).
 ``
            (D) Written notice.--Each plan year, group health 
 plans, including with respect to group health insurance 
 coverage offered in connection with a group health 
 plan, shall provide to each participant or beneficiary 
 written notice informing the participant or beneficiary 
 of the requirement for entities providing pharmacy 
 benefit management services on behalf of the group 
 health plan or health insurance issuer offering group 
 health insurance coverage to submit reports to group 
 health plans under paragraph

    (1) , as applicable, which 
 may include incorporating such notification in plan 
 documents provided to the participant or beneficiary, 
 or providing individual notification.
 ``
        (E) Limitation to business associates.--A group 
 health plan receiving a report under paragraph

    (1) may 
 disclose such information only to the entity from which 
 the report was received or to that entity's business 
 associates as defined in 

section 160.103 of title 45, 
 Code of Federal Regulations (or successor regulations) 
 or as permitted by the HIPAA privacy regulations.
 ``
        (F) Clarification regarding public disclosure of 
 information.--Nothing in this section shall prevent an 
 entity providing pharmacy benefit management services 
 on behalf of a group health plan or health insurance 
 issuer offering group health insurance coverage, from 
 placing reasonable restrictions on the public 
 disclosure of the information contained in a report 
 described in paragraph

    (1) , except that such plan, 
 issuer, or entity may not--
 ``
            (i) restrict disclosure of such report to 
 the Department of Health and Human Services, 
 the Department of Labor, or the Department of 
 the Treasury; or
 ``
            (ii) prevent disclosure for the purposes 
 of subsection
            (c) , or any other public 
 disclosure requirement under this section.
 ``
        (G) Limited form of report.--The Secretary shall 
 define through rulemaking a limited form of the report 
 under paragraph

    (1) required with respect to any group 
 health plan established by a plan sponsor that is, or 
 is affiliated with, a drug manufacturer, drug 
 wholesaler, or other direct participant in the drug 
 supply chain, in order to prevent anti-competitive 
 behavior.
 ``

    (5) Standard format and regulations.--
 ``
        (A) In general.--Not later than 18 months after 
 the date of enactment of this section, the Secretary 
 shall specify through rulemaking a standard format for 
 entities providing pharmacy benefit management services 
 on behalf of group health plans and health insurance 
 issuers offering group health insurance coverage, to 
 submit reports required under paragraph

    (1) .
 ``
        (B) Additional regulations.--Not later than 18 
 months after the date of enactment of this section, the 
 Secretary shall, through rulemaking, promulgate any 
 other final regulations necessary to implement the 
 requirements of this section. In promulgating such 
 regulations, the Secretary shall, to the extent 
 practicable, align the reporting requirements under 
 this section with the reporting requirements under 
 

section 725.
 ``
            (c) Requirement To Provide Information to Participants or 
Beneficiaries.--A group health plan, including with respect to group 
health insurance coverage offered in connection with a group health 
plan, upon request of a participant or beneficiary, shall provide to 
such participant or beneficiary--
 ``

    (1) the summary document described in subsection

    (b)

    (2)
        (B)
            (ii) ; and
 ``

    (2) the information described in subsection

    (b)

    (2)
        (A)
            (i) 
            (III) with respect to a claim made by or on behalf 
 of such participant or beneficiary.
 ``
            (d) Rule of Construction.--Nothing in this section shall be 
construed to permit a health insurance issuer, group health plan, 
entity providing pharmacy benefit management services on behalf of a 
group health plan or health insurance issuer, or other entity to 
restrict disclosure to, or otherwise limit the access of, the Secretary 
to a report described in subsection

    (b)

    (1) or information related to 
compliance with subsections

    (a) ,

    (b) , or
            (c) of this section or 

section 502
            (c) (13) by such issuer, plan, or entity.
 ``

    (e) 

=== Definitions. ===
-In this section:
 ``

    (1) Applicable entity.--The term `applicable entity' 
 means--
 ``
        (A) an applicable group purchasing organization, 
 drug manufacturer, distributor, wholesaler, rebate 
 aggregator (or other purchasing entity designed to 
 aggregate rebates), or associated third party;
 ``
        (B) any subsidiary, parent, affiliate, or 
 subcontractor of a group health plan, health insurance 
 issuer, entity that provides pharmacy benefit 
 management services on behalf of such a plan or issuer, 
 or any entity described in subparagraph
        (A) ; or
 ``
            (C) such other entity as the Secretary may 
 specify through rulemaking.
 ``

    (2) Applicable group purchasing organization.--The term 
 `applicable group purchasing organization' means a group 
 purchasing organization that is affiliated with or under common 
 ownership with an entity providing pharmacy benefit management 
 services.
 ``

    (3) Contracted compensation.--The term `contracted 
 compensation' means the sum of any ingredient cost and 
 dispensing fee for a drug (inclusive of the out-of-pocket costs 
 to the participant or beneficiary), or another analogous 
 compensation structure that the Secretary may specify through 
 regulations.
 ``

    (4) Gross spending.--The term `gross spending', with 
 respect to prescription drug benefits under a group health plan 
 or health insurance coverage, means the amount spent by a group 
 health plan or health insurance issuer on prescription drug 
 benefits, calculated before the application of rebates, fees, 
 alternative discounts, or other remuneration.
 ``

    (5) Net spending.--The term `net spending', with respect 
 to prescription drug benefits under a group health plan or 
 health insurance coverage, means the amount spent by a group 
 health plan or health insurance issuer on prescription drug 
 benefits, calculated after the application of rebates, fees, 
 alternative discounts, or other remuneration.
 ``

    (6) Plan sponsor.--The term `plan sponsor' has the 
 meaning given such term in 

section 3

    (16)
        (B) .
 ``

    (7) Remuneration.--The term `remuneration' has the 
 meaning given such term by the Secretary through rulemaking, 
 which shall be reevaluated by the Secretary every 5 years.
 ``

    (8) Specified large employer.--The term `specified large 
 employer' means, in connection with a group health plan 
 (including group health insurance coverage offered in 
 connection with such a plan) established or maintained by a 
 single employer, with respect to a calendar year or a plan 
 year, as applicable, an employer who employed an average of at 
 least 100 employees on business days during the preceding 
 calendar year or plan year and who employs at least 1 employee 
 on the first day of the calendar year or plan year.
 ``

    (9) Specified large plan.--The term `specified large 
 plan' means a group health plan (including group health 
 insurance coverage offered in connection with such a plan) 
 established or maintained by a plan sponsor described in clause
            (ii) or
            (iii) of 

section 3

    (16)
        (B) that had an average of at 
 least 100 participants on business days during the preceding 
 calendar year or plan year, as applicable.
 ``

    (10) Wholesale acquisition cost.--The term `wholesale 
 acquisition cost' has the meaning given such term in 

section 1847A
            (c) (6)
        (B) of the Social Security Act (42 U.S.C. 1395w-
 3a
            (c) (6)
        (B) ).'';
        (B) in 

section 502 (29 U.S.C. 1132)--
            (i) in subsection

    (a)

    (6) , by striking ``or

    (9) '' and inserting ``

    (9) , or

    (13) '';
            (ii) in subsection

    (b)

    (3) , by striking 
 ``under subsection
            (c) (9) '' and inserting 
 ``under paragraphs

    (9) and

    (13) of subsection
            (c) ''; and
            (iii) in subsection
            (c) , by adding at the 
 end the following:
 ``

    (13) Secretarial enforcement authority relating to 
 oversight of pharmacy benefit management services.--
 ``
        (A) Failure to provide information.--The 
 Secretary may impose a penalty against a plan 
 administrator of a group health plan, a health 
 insurance issuer offering group health insurance 
 coverage, or an entity providing pharmacy benefit 
 management services on behalf of such a plan or issuer, 
 or an applicable entity (as defined in 

section 726

    (f) ) 
 that violates 

section 726

    (a) ; an entity providing 
 pharmacy benefit management services on behalf of such 
 a plan or issuer that fails to provide the information 
 required under 

section 726

    (b) ; or any person who causes 
 a group health plan to fail to provide the information 
 required under 

section 726
            (c) , in the amount of $10,000 
 for each day during which such violation continues or 
 such information is not disclosed or reported.
 ``
        (B) False information.--The Secretary may impose 
 a penalty against a plan administrator of a group 
 health plan, a health insurance issuer offering group 
 health insurance coverage, an entity providing pharmacy 
 benefit management services, or an applicable entity 
 (as defined in 

section 726

    (f) ) that knowingly provides 
 false information under 

section 726, in an amount not 
 to exceed $100,000 for each item of false information. 
 Such penalty shall be in addition to other penalties as 
 may be prescribed by law.
 ``
            (C) Waivers.--The Secretary may waive penalties 
 under subparagraph
        (A) , or extend the period of time 
 for compliance with a requirement of this section, for 
 an entity in violation of 

section 726 that has made a 
 good-faith effort to comply with the requirements of 
 

section 726.''; and
            (C) in 

section 732

    (a) (29 U.S.C. 1191a

    (a) ), by 
 striking ``

section 711'' and inserting ``sections 711 
 and 726''.

    (2) 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. Oversight of entities that provide pharmacy benefit 
 management services.''.
            (c) Internal Revenue Code of 1986.--

    (1) In general.--Chapter 100 of the Internal Revenue Code 
 of 1986 is amended--
        (A) by adding at the end of subchapter B the 
 following:

``

SEC. 9826. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT 
 MANAGEMENT SERVICES.

 ``

    (a) In General.--For plan years beginning on or after the date 
that is 30 months after the date of enactment of this section (referred 
to in this subsection and subsection

    (b) as the `effective date'), a 
group health plan, or an entity providing pharmacy benefit management 
services on behalf of such a plan, shall not enter into a contract, 
including an extension or renewal of a contract, entered into on or 
after the effective date, with an applicable entity unless such 
applicable entity agrees to--
 ``

    (1) not limit or delay the disclosure of information to 
 the group health plan in such a manner that prevents an entity 
 providing pharmacy benefit management services on behalf of a 
 group health plan from making the reports described in 
 subsection

    (b) ; and
 ``

    (2) provide the entity providing pharmacy benefit 
 management services on behalf of a group health plan relevant 
 information necessary to make the reports described in 
 subsection

    (b) .
 ``

    (b) Reports.--
 ``

    (1) In general.--For plan years beginning on or after the 
 effective date, in the case of any contract between a group 
 health plan and an entity providing pharmacy benefit management 
 services on behalf of such plan, including an extension or 
 renewal of such a contract, entered into on or after the 
 effective date, the entity providing pharmacy benefit 
 management services on behalf of such a group health plan, not 
 less frequently than every 6 months (or, at the request of a 
 group health plan, not less frequently than quarterly, and 
 under the same conditions, terms, and cost of the semiannual 
 report under this subsection), shall submit to the group health 
 plan a report in accordance with this section. Each such report 
 shall be made available to such group health plan in plain 
 language, in a machine-readable format, and as the Secretary 
 may determine, other formats. Each such report shall include 
 the information described in paragraph

    (2) .
 ``

    (2) Information described.--For purposes of paragraph

    (1) , the information described in this paragraph is, with 
 respect to drugs covered by a group health plan during each 
 reporting period--
 ``
        (A) in the case of a group health plan that is 
 offered by a specified large employer or that is a 
 specified large plan, and is not offered as health 
 insurance coverage, or in the case of health insurance 
 coverage for which the election under paragraph

    (3) is 
 made for the applicable reporting period--
 ``
            (i) a list of drugs for which a claim was 
 filed and, with respect to each such drug on 
 such list--
 ``
            (I) the contracted compensation 
 paid by the group health plan for each 
 covered drug (identified by the 
 National Drug Code) to the entity 
 providing pharmacy benefit management 
 services or other applicable entity on 
 behalf of the group health plan;
 ``
            (II) the contracted compensation 
 paid to the pharmacy, by any entity 
 providing pharmacy benefit management 
 services or other applicable entity on 
 behalf of the group health plan, for 
 each covered drug (identified by the 
 National Drug Code);
 ``
            (III) for each such claim, the 
 difference between the amount paid 
 under subclause
            (I) and the amount paid 
 under subclause
            (II) ;
 ``
            (IV) the proprietary name, 
 established name or proper name, and 
 National Drug Code;
 ``
            (V) for each claim for the drug 
 (including original prescriptions and 
 refills) and for each dosage unit of 
 the drug for which a claim was filed, 
 the type of dispensing channel used to 
 furnish the drug, including retail, 
 mail order, or specialty pharmacy;
 ``
            (VI) with respect to each drug 
 dispensed, for each type of dispensing 
 channel (including retail, mail order, 
 or specialty pharmacy)--
 ``

    (aa) whether such drug is 
 a brand name drug or a generic 
 drug, and--

 ``

    (AA) in the case 
 of a brand name drug, 
 the wholesale 
 acquisition cost, 
 listed as cost per days 
 supply and cost per 
 dosage unit, on the 
 date such drug was 
 dispensed; and

 ``

    (BB) in the case 
 of a generic drug, the 
 average wholesale 
 price, listed as cost 
 per days supply and 
 cost per dosage unit, 
 on the date such drug 
 was dispensed; and

 ``

    (bb) the total number 
 of--

 ``

    (AA) prescription 
 claims (including 
 original prescriptions 
 and refills);

 ``

    (BB) participants 
 and beneficiaries for 
 whom a claim for such 
 drug was filed through 
 the applicable 
 dispensing channel;

 ``
            (CC) dosage units 
 and dosage units per 
 fill of such drug; and

 ``
            (DD) days supply 
 of such drug per fill;

 ``
            (VII) the net price per course of 
 treatment or single fill, such as a 30-
 day supply or 90-day supply to the plan 
 after rebates, fees, alternative 
 discounts, or other remuneration 
 received from applicable entities;
 ``
            (VIII) the total amount of out-
 of-pocket spending by participants and 
 beneficiaries on such drug, including 
 spending through copayments, 
 coinsurance, and deductibles, but not 
 including any amounts spent by 
 participants and beneficiaries on drugs 
 not covered under the plan, or for 
 which no claim is submitted under the 
 plan;
 ``
            (IX) the total net spending on 
 the drug;
 ``
            (X) the total amount received, or 
 expected to be received, by the plan 
 from any applicable entity in rebates, 
 fees, alternative discounts, or other 
 remuneration;
 ``
            (XI) the total amount received, 
 or expected to be received, by the 
 entity providing pharmacy benefit 
 management services, from applicable 
 entities, in rebates, fees, alternative 
 discounts, or other remuneration from 
 such entities--
 ``

    (aa) for claims incurred 
 during the reporting period; 
 and
 ``

    (bb) that is related to 
 utilization of such drug or 
 spending on such drug; and
 ``
            (XII) to the extent feasible, 
 information on the total amount of 
 remuneration for such drug, including 
 copayment assistance dollars paid, 
 copayment cards applied, or other 
 discounts provided by each drug 
 manufacturer (or entity administering 
 copayment assistance on behalf of such 
 drug manufacturer), to the participants 
 and beneficiaries enrolled in such 
 plan;
 ``
            (ii) a list of each therapeutic class (as 
 defined by the Secretary) for which a claim was 
 filed under the group health plan during the 
 reporting period, and, with respect to each 
 such therapeutic class--
 ``
            (I) the total gross spending on 
 drugs in such class before rebates, 
 price concessions, alternative 
 discounts, or other remuneration from 
 applicable entities;
 ``
            (II) the net spending in such 
 class after such rebates, price 
 concessions, alternative discounts, or 
 other remuneration from applicable 
 entities;
 ``
            (III) the total amount received, 
 or expected to be received, by the 
 entity providing pharmacy benefit 
 management services, from applicable 
 entities, in rebates, fees, alternative 
 discounts, or other remuneration from 
 such entities--
 ``

    (aa) for claims incurred 
 during the reporting period; 
 and
 ``

    (bb) that is related to 
 utilization of drugs or drug 
 spending;
 ``
            (IV) the average net spending per 
 30-day supply and per 90-day supply by 
 the plan and its participants and 
 beneficiaries, among all drugs within 
 the therapeutic class for which a claim 
 was filed during the reporting period;
 ``
            (V) the number of participants 
 and beneficiaries who filled a 
 prescription for a drug in such class, 
 including the National Drug Code for 
 each such drug;
 ``
            (VI) if applicable, a description 
 of the formulary tiers and utilization 
 mechanisms (such as prior authorization 
 or step therapy) employed for drugs in 
 that class; and
 ``
            (VII) the total out-of-pocket 
 spending under the plan by participants 
 and beneficiaries, including spending 
 through copayments, coinsurance, and 
 deductibles, but not including any 
 amounts spent by participants and 
 beneficiaries on drugs not covered 
 under the plan or for which no claim is 
 submitted under the plan;
 ``
            (iii) with respect to any drug for which 
 gross spending under the group health plan 
 exceeded $10,000 during the reporting period 
 or, in the case that gross spending under the 
 group health plan exceeded $10,000 during the 
 reporting period with respect to fewer than 50 
 drugs, with respect to the 50 prescription 
 drugs with the highest spending during the 
 reporting period--
 ``
            (I) a list of all other drugs in 
 the same therapeutic class as such 
 drug;
 ``
            (II) if applicable, the rationale 
 for the formulary placement of such 
 drug in that therapeutic category or 
 class, selected from a list of standard 
 rationales established by the 
 Secretary, in consultation with 
 stakeholders; and
 ``
            (III) any change in formulary 
 placement compared to the prior plan 
 year; and
 ``
            (iv) in the case that such plan (or an 
 entity providing pharmacy benefit management 
 services on behalf of such plan) has an 
 affiliated pharmacy or pharmacy under common 
 ownership, including mandatory mail and 
 specialty home delivery programs, retail and 
 mail auto-refill programs, and cost sharing 
 assistance incentives funded by an entity 
 providing pharmacy benefit services--
 ``
            (I) an explanation of any benefit 
 design parameters that encourage or 
 require participants and beneficiaries 
 in the plan to fill prescriptions at 
 mail order, specialty, or retail 
 pharmacies;
 ``
            (II) the percentage of total 
 prescriptions dispensed by such 
 pharmacies to participants or 
 beneficiaries in such plan; and
 ``
            (III) a list of all drugs 
 dispensed by such pharmacies to 
 participants or beneficiaries enrolled 
 in such plan, and, with respect to each 
 drug dispensed--
 ``

    (aa) the amount charged, 
 per dosage unit, per 30-day 
 supply, or per 90-day supply 
 (as applicable) to the plan, 
 and to participants and 
 beneficiaries;
 ``

    (bb) the median amount 
 charged to such plan, and the 
 interquartile range of the 
 costs, per dosage unit, per 30-
 day supply, and per 90-day 
 supply, including amounts paid 
 by the participants and 
 beneficiaries, when the same 
 drug is dispensed by other 
 pharmacies that are not 
 affiliated with or under common 
 ownership with the entity and 
 that are included in the 
 pharmacy network of such plan;
 ``
            (cc) the lowest cost per 
 dosage unit, per 30-day supply 
 and per 90-day supply, for each 
 such drug, including amounts 
 charged to the plan and to 
 participants and beneficiaries, 
 that is available from any 
 pharmacy included in the 
 network of such plan; and
 ``
            (dd) the net acquisition 
 cost per dosage unit, per 30-
 day supply, and per 90-day 
 supply, if such drug is subject 
 to a maximum price discount; 
 and
 ``
        (B) with respect to any group health plan, 
 regardless of whether the plan is offered by a 
 specified large employer or whether it is a specified 
 large plan--
 ``
            (i) a summary document for the group 
 health plan that includes such information 
 described in clauses
            (i) through
            (iv) of 
 subparagraph
        (A) , as specified by the Secretary 
 through guidance, program instruction, or 
 otherwise (with no requirement of notice and 
 comment rulemaking), that the Secretary 
 determines useful to group health plans for 
 purposes of selecting pharmacy benefit 
 management services, such as an estimated net 
 price to group health plan and participant or 
 beneficiary, a cost per claim, the fee 
 structure or reimbursement model, and estimated 
 cost per participant or beneficiary;
 ``
            (ii) a summary document for plans to 
 provide to participants and beneficiaries, 
 which shall be made available to participants 
 or beneficiaries upon request to their group 
 health plan, that--
 ``
            (I) contains such information 
 described in clauses
            (iii) ,
            (iv) ,
            (v) , 
 and
            (vi) , as applicable, as specified 
 by the Secretary through guidance, 
 program instruction, or otherwise (with 
 no requirement of notice and comment 
 rulemaking) that the Secretary 
 determines useful to participants or 
 beneficiaries in better understanding 
 the plan or benefits under such plan;
 ``
            (II) contains only aggregate 
 information; and
 ``
            (III) states that participants 
 and beneficiaries may request specific, 
 claims-level information required to be 
 furnished under subsection
            (c) from the 
 group health plan; and
 ``
            (iii) with respect to drugs covered by 
 such plan during such reporting period--
 ``
            (I) the total net spending by the 
 plan for all such drugs;
 ``
            (II) the total amount received, 
 or expected to be received, by the plan 
 from any applicable entity in rebates, 
 fees, alternative discounts, or other 
 remuneration; and
 ``
            (III) to the extent feasible, 
 information on the total amount of 
 remuneration for such drugs, including 
 copayment assistance dollars paid, 
 copayment cards applied, or other 
 discounts provided by each drug 
 manufacturer (or entity administering 
 copayment assistance on behalf of such 
 drug manufacturer) to participants and 
 beneficiaries;
 ``
            (iv) amounts paid directly or indirectly 
 in rebates, fees, or any other type of 
 compensation (as defined in 

section 408

    (b)

    (2)
        (B)
            (ii) 
            (dd) (AA) of the Employee 
 Retirement Income Security Act (29 U.S.C. 
 1108

    (b)

    (2)
        (B)
            (ii) 
            (dd) (AA) )) to brokerage firms, 
 brokers, consultants, advisors, or any other 
 individual or firm, for--
 ``
            (I) the referral of the group 
 health plan's business to an entity 
 providing pharmacy benefit management 
 services, including the identity of the 
 recipient of such amounts;
 ``
            (II) consideration of the entity 
 providing pharmacy benefit management 
 services by the group health plan; or
 ``
            (III) the retention of the entity 
 by the group health plan;
 ``
            (v) an explanation of any benefit design 
 parameters that encourage or require 
 participants and beneficiaries in such plan to 
 fill prescriptions at mail order, specialty, or 
 retail pharmacies that are affiliated with or 
 under common ownership with the entity 
 providing pharmacy benefit management services 
 under such plan, including mandatory mail and 
 specialty home delivery programs, retail and 
 mail auto-refill programs, and cost-sharing 
 assistance incentives directly or indirectly 
 funded by such entity; and
 ``
            (vi) total gross spending on all drugs 
 under the plan during the reporting period.
 ``

    (3) Opt-in for group health insurance coverage offered by 
 a specified large employer or that is a specified large plan.--
 In the case of group health insurance coverage offered in 
 connection with a group health plan that is offered by a 
 specified large employer or is a specified large plan, such 
 group health plan may, on an annual basis, for plan years 
 beginning on or after the date that is 30 months after the date 
 of enactment of this section, elect to require an entity 
 providing pharmacy benefit management services on behalf of the 
 health insurance issuer to submit to such group health plan a 
 report that includes all of the information described in 
 paragraph

    (2)
        (A) , in addition to the information described in 
 paragraph

    (2)
        (B) .
 ``

    (4) Privacy requirements.--
 ``
        (A) In general.--An entity providing pharmacy 
 benefit management services on behalf of a group health 
 plan shall report information under paragraph

    (1) in a 
 manner consistent with the privacy regulations 
 promulgated under 

section 13402

    (a) of the Health 
 Information Technology for Economic and Clinical Health 
 Act (42 U.S.C. 17932

    (a) ) and consistent with the 
 privacy regulations promulgated under the Health 
 Insurance Portability and Accountability Act of 1996 in 
 part 160 and subparts A and E of part 164 of title 45, 
 Code of Federal Regulations (or successor regulations) 
 (referred to in this paragraph as the `HIPAA privacy 
 regulations') and shall restrict the use and disclosure 
 of such information according to such privacy 
 regulations and such HIPAA privacy regulations.
 ``
        (B) Additional requirements.--
 ``
            (i) In general.--An entity providing 
 pharmacy benefit management services on behalf 
 of a group health plan that submits a report 
 under paragraph

    (1) shall ensure that such 
 report contains only summary health 
 information, as defined in 

section 164.504

    (a) of title 45, Code of Federal Regulations (or 
 successor regulations).
 ``
            (ii) Restrictions.--In carrying out this 
 subsection, a group health plan shall comply 
 with 

section 164.504

    (f) of title 45, Code of 
 Federal Regulations (or a successor 
 regulation), and a plan sponsor shall act in 
 accordance with the terms of the agreement 
 described in such section.
 ``
            (C) Rule of construction.--
 ``
            (i) Nothing in this section shall be 
 construed to modify the requirements for the 
 creation, receipt, maintenance, or transmission 
 of protected health information under the HIPAA 
 privacy regulations.
 ``
            (ii) Nothing in this section shall be 
 construed to affect the application of any 
 Federal or State privacy or civil rights law, 
 including the HIPAA privacy regulations, the 
 Genetic Information Nondiscrimination Act of 
 2008 (Public Law 110-233) (including the 
 amendments made by such Act), the Americans 
 with Disabilities Act of 1990 (42 U.S.C. 12101 
 et sec), 

section 504 of the Rehabilitation Act 
 of 1973 (29 U.S.C. 794), 

section 1557 of the 
 Patient Protection and Affordable Care Act (42 
 U.S.C. 18116), title VI of the Civil Rights Act 
 of 1964 (42 U.S.C. 2000d), and title VII of the 
 Civil Rights Act of 1964 (42 U.S.C. 2000e).
 ``
            (D) Written notice.--Each plan year, group health 
 plans shall provide to each participant or beneficiary 
 written notice informing the participant or beneficiary 
 of the requirement for entities providing pharmacy 
 benefit management services on behalf of the group 
 health plan to submit reports to group health plans 
 under paragraph

    (1) , as applicable, which may include 
 incorporating such notification in plan documents 
 provided to the participant or beneficiary, or 
 providing individual notification.
 ``
        (E) Limitation to business associates.--A group 
 health plan receiving a report under paragraph

    (1) may 
 disclose such information only to the entity from which 
 the report was received or to that entity's business 
 associates as defined in 

section 160.103 of title 45, 
 Code of Federal Regulations (or successor regulations) 
 or as permitted by the HIPAA privacy regulations.
 ``
        (F) Clarification regarding public disclosure of 
 information.--Nothing in this section shall prevent an 
 entity providing pharmacy benefit management services 
 on behalf of a group health plan, from placing 
 reasonable restrictions on the public disclosure of the 
 information contained in a report described in 
 paragraph

    (1) , except that such plan or entity may 
 not--
 ``
            (i) restrict disclosure of such report to 
 the Department of Health and Human Services, 
 the Department of Labor, or the Department of 
 the Treasury; or
 ``
            (ii) prevent disclosure for the purposes 
 of subsection
            (c) , or any other public 
 disclosure requirement under this section.
 ``
        (G) Limited form of report.--The Secretary shall 
 define through rulemaking a limited form of the report 
 under paragraph

    (1) required with respect to any group 
 health plan established by a plan sponsor that is, or 
 is affiliated with, a drug manufacturer, drug 
 wholesaler, or other direct participant in the drug 
 supply chain, in order to prevent anti-competitive 
 behavior.
 ``

    (5) Standard format and regulations.--
 ``
        (A) In general.--Not later than 18 months after 
 the date of enactment of this section, the Secretary 
 shall specify through rulemaking a standard format for 
 entities providing pharmacy benefit management services 
 on behalf of group health plans, to submit reports 
 required under paragraph

    (1) .
 ``
        (B) Additional regulations.--Not later than 18 
 months after the date of enactment of this section, the 
 Secretary shall, through rulemaking, promulgate any 
 other final regulations necessary to implement the 
 requirements of this section. In promulgating such 
 regulations, the Secretary shall, to the extent 
 practicable, align the reporting requirements under 
 this section with the reporting requirements under 
 

section 9825.
 ``
            (c) Requirement To Provide Information to Participants or 
Beneficiaries.--A group health plan, upon request of a participant or 
beneficiary, shall provide to such participant or beneficiary--
 ``

    (1) the summary document described in subsection

    (b)

    (2)
        (B)
            (ii) ; and
 ``

    (2) the information described in subsection

    (b)

    (2)
        (A)
            (i) 
            (III) with respect to a claim made by or on behalf 
 of such participant or beneficiary.
 ``
            (d) Rule of Construction.--Nothing in this section shall be 
construed to permit a health insurance issuer, group health plan, 
entity providing pharmacy benefit management services on behalf of a 
group health plan or health insurance issuer, or other entity to 
restrict disclosure to, or otherwise limit the access of, the Secretary 
to a report described in subsection

    (b)

    (1) or information related to 
compliance with subsections

    (a) ,

    (b) , or
            (c) of this section or 

section 4980D

    (g) by such issuer, plan, or entity.
 ``

    (e) 

=== Definitions. ===
-In this section:
 ``

    (1) Applicable entity.--The term `applicable entity' 
 means--
 ``
        (A) an applicable group purchasing organization, 
 drug manufacturer, distributor, wholesaler, rebate 
 aggregator (or other purchasing entity designed to 
 aggregate rebates), or associated third party;
 ``
        (B) any subsidiary, parent, affiliate, or 
 subcontractor of a group health plan, health insurance 
 issuer, entity that provides pharmacy benefit 
 management services on behalf of such a plan or issuer, 
 or any entity described in subparagraph
        (A) ; or
 ``
            (C) such other entity as the Secretary may 
 specify through rulemaking.
 ``

    (2) Applicable group purchasing organization.--The term 
 `applicable group purchasing organization' means a group 
 purchasing organization that is affiliated with or under common 
 ownership with an entity providing pharmacy benefit management 
 services.
 ``

    (3) Contracted compensation.--The term `contracted 
 compensation' means the sum of any ingredient cost and 
 dispensing fee for a drug (inclusive of the out-of-pocket costs 
 to the participant or beneficiary), or another analogous 
 compensation structure that the Secretary may specify through 
 regulations.
 ``

    (4) Gross spending.--The term `gross spending', with 
 respect to prescription drug benefits under a group health 
 plan, means the amount spent by a group health plan on 
 prescription drug benefits, calculated before the application 
 of rebates, fees, alternative discounts, or other remuneration.
 ``

    (5) Net spending.--The term `net spending', with respect 
 to prescription drug benefits under a group health plan, means 
 the amount spent by a group health plan on prescription drug 
 benefits, calculated after the application of rebates, fees, 
 alternative discounts, or other remuneration.
 ``

    (6) Plan sponsor.--The term `plan sponsor' has the 
 meaning given such term in 

section 3

    (16)
        (B) of the Employee 
 Retirement Income Security Act of 1974 (29 U.S.C. 1002

    (16)
        (B) ).
 ``

    (7) Remuneration.--The term `remuneration' has the 
 meaning given such term by the Secretary, through rulemaking, 
 which shall be reevaluated by the Secretary every 5 years.
 ``

    (8) Specified large employer.--The term `specified large 
 employer' means, in connection with a group health plan 
 established or maintained by a single employer, with respect to 
 a calendar year or a plan year, as applicable, an employer who 
 employed an average of at least 100 employees on business days 
 during the preceding calendar year or plan year and who employs 
 at least 1 employee on the first day of the calendar year or 
 plan year.
 ``

    (9) Specified large plan.--The term `specified large 
 plan' means a group health plan established or maintained by a 
 plan sponsor described in clause
            (ii) or
            (iii) of 

section 3

    (16)
        (B) of the Employee Retirement Income Security Act of 1974 
 (29 U.S.C. 1002

    (16)
        (B) ) that had an average of at least 100 
 participants on business days during the preceding calendar 
 year or plan year, as applicable.
 ``

    (10) Wholesale acquisition cost.--The term `wholesale 
 acquisition cost' has the meaning given such term in 

section 1847A
            (c) (6)
        (B) of the Social Security Act (42 U.S.C. 1395w-
 3a
            (c) (6)
        (B) ).'';

    (2) Exception for certain group health plans.--

Section 9831

    (a)

    (2) of the Internal Revenue Code of 1986 is amended by 
 inserting ``other than with respect to 

section 9826,'' before 
 ``any group health plan''.

    (3) Enforcement.--

Section 4980D of the Internal Revenue 
 Code of 1986 is amended by adding at the end the following new 
 subsection:
 ``

    (g) Application to Requirements Imposed on Certain Entities 
Providing Pharmacy Benefit Management Services.--In the case of any 
requirement under 

section 9826 that applies with respect to an entity 
providing pharmacy benefit management services on behalf of a group 
health plan, any reference in this section to such group health plan 
(and the reference in subsection

    (e)

    (1) to the employer) shall be 
treated as including a reference to such entity.''.

    (4) 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. Oversight of entities that provide pharmacy benefit 
 management services.''.
 <all>