119-hr4317

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4317 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 4317

 To assure pharmacy access and choice for Medicare beneficiaries, and 
 for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 July 10, 2025

Mr. Carter of Georgia (for himself, Mrs. Dingell, Mr. Murphy, Ms. Ross, 
 Mr. Arrington, Mrs. Harshbarger, Mr. Vicente Gonzalez of Texas, Mr. 
 Allen, Mr. Krishnamoorthi, Mr. Rose, Mr. Tran, and Ms. Malliotakis) 
 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 assure pharmacy access and choice for Medicare beneficiaries, 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 ``Pharmacy Benefit Manager Reform Act 
of 2025'' or the ``PBM Reform Act of 2025''.

SEC. 2. ASSURING PHARMACY ACCESS AND CHOICE FOR MEDICARE BENEFICIARIES.

    (a) In General.--

Section 1860D-4

    (b)

    (1) of the Social Security Act 
(42 U.S.C. 1395w-104

    (b)

    (1) ) is amended by striking subparagraph
        (A) and 
inserting the following:
 ``
        (A) In general.--
 ``
            (i) Participation of any willing 
 pharmacy.--A PDP sponsor offering a 
 prescription drug plan shall permit any 
 pharmacy that meets the standard contract terms 
 and conditions under such plan to participate 
 as a network pharmacy of such plan.
 ``
            (ii) Contract terms and conditions.--
 ``
            (I) In general.--Notwithstanding 
 any other provision of law, for plan 
 years beginning on or after January 1, 
 2029, in accordance with clause
            (i) , 
 contract terms and conditions offered 
 by such PDP sponsor shall be reasonable 
 and relevant according to standards 
 established by the Secretary under 
 subclause
            (II) .
 ``
            (II) Standards.--Not later than 
 the first Monday in April of 2028, the 
 Secretary shall establish standards for 
 reasonable and relevant contract terms 
 and conditions for purposes of this 
 clause.
 ``
            (III) Request for information.--
 Not later than April 1, 2027, for 
 purposes of establishing the standards 
 under subclause
            (II) , the Secretary 
 shall issue a request for information 
 to seek input on trends in prescription 
 drug plan and network pharmacy contract 
 terms and conditions, current 
 prescription drug plan and network 
 pharmacy contracting practices, whether 
 pharmacy reimbursement and dispensing 
 fees paid by PDP sponsors to network 
 pharmacies sufficiently cover the 
 ingredient and operational costs of 
 such pharmacies, the use and 
 application of pharmacy quality 
 measures by PDP sponsors for network 
 pharmacies, PDP sponsor restrictions or 
 limitations on the dispensing of 
 covered part D drugs by network 
 pharmacies (or any subsets of such 
 pharmacies), PDP sponsor auditing 
 practices for network pharmacies, areas 
 in current regulations or program 
 guidance related to contracting between 
 prescription drug plans and network 
 pharmacies requiring clarification or 
 additional specificity, factors for 
 consideration in determining the 
 reasonableness and relevance of 
 contract terms and conditions between 
 prescription drug plans and network 
 pharmacies, and other issues as 
 determined appropriate by the 
 Secretary.''.

    (b) Essential Retail Pharmacies.--

Section 1860D-42 of the Social 
Security Act (42 U.S.C. 1395w-152) is amended by adding at the end the 
following new subsection:
 ``

    (e) Essential Retail Pharmacies.--
 ``

    (1) In general.--With respect to plan years beginning on 
 or after January 1, 2028, the Secretary shall publish reports, 
 at least once every 2 years until 2034, and periodically 
 thereafter, that provide information, to the extent feasible, 
 on--
 ``
        (A) trends in ingredient cost reimbursement, 
 dispensing fees, incentive payments and other fees paid 
 by PDP sponsors offering prescription drug plans and MA 
 organizations offering MA-PD plans under this part to 
 essential retail pharmacies (as defined in paragraph

    (2) ) with respect to the dispensing of covered part D 
 drugs, including a comparison of such trends between 
 essential retail pharmacies and pharmacies that are not 
 essential retail pharmacies;
 ``
        (B) trends in amounts paid to PDP sponsors 
 offering prescription drug plans and MA organizations 
 offering MA-PD plans under this part by essential 
 retail pharmacies with respect to the dispensing of 
 covered part D drugs, including a comparison of such 
 trends between essential retail pharmacies and 
 pharmacies that are not essential retail pharmacies;
 ``
            (C) trends in essential retail pharmacy 
 participation in pharmacy networks and preferred 
 pharmacy networks for prescription drug plans offered 
 by PDP sponsors and MA-PD plans offered by MA 
 organizations under this part, including a comparison 
 of such trends between essential retail pharmacies and 
 pharmacies that are not essential retail pharmacies;
 ``
            (D) trends in the number of essential retail 
 pharmacies, including variation in such trends by 
 geographic region or other factors;
 ``
        (E) a comparison of cost-sharing for covered part 
 D drugs dispensed by essential retail pharmacies that 
 are network pharmacies for prescription drug plans 
 offered by PDP sponsors and MA-PD plans offered by MA 
 organizations under this part and cost-sharing for 
 covered part D drugs dispensed by other network 
 pharmacies for such plans located in similar geographic 
 areas that are not essential retail pharmacies;
 ``
        (F) a comparison of the volume of covered part D 
 drugs dispensed by essential retail pharmacies that are 
 network pharmacies for prescription drug plans offered 
 by PDP sponsors and MA-PD plans offered by MA 
 organizations under this part and such volume of 
 dispensing by network pharmacies for such plans located 
 in similar geographic areas that are not essential 
 retail pharmacies, including information on any 
 patterns or trends in such comparison specific to 
 certain types of covered part D drugs, such as generic 
 drugs or drugs specified as specialty drugs by a PDP 
 sponsor under a prescription drug plan or an MA 
 organization under an MA-PD plan; and
 ``
        (G) a comparison of the information described in 
 subparagraphs
        (A) through
        (F) between essential retail 
 pharmacies that are network pharmacies for prescription 
 drug plans offered by PDP sponsors under this part and 
 essential retail pharmacies that are network pharmacies 
 for MA-PD plans offered by MA organizations under this 
 part.
 ``

    (2) Definition of essential retail pharmacy.--In this 
 subsection, the term `essential retail pharmacy' means, with 
 respect to a plan year, a retail pharmacy that--
 ``
        (A) is not a pharmacy that is an affiliate as 
 defined in paragraph

    (4) ; and
 ``
        (B) is located in--
 ``
            (i) a medically underserved area (as 
 designated pursuant to 

section 330

    (b)

    (3)
        (A) of 
 the Public Health Service Act);
 ``
            (ii) a rural area in which there is no 
 other retail pharmacy within 10 miles, as 
 determined by the Secretary;
 ``
            (iii) a suburban area in which there is 
 no other retail pharmacy within 2 miles, as 
 determined by the Secretary; or
 ``
            (iv) an urban area in which there is no 
 other retail pharmacy within 1 mile, as 
 determined by the Secretary.
 ``

    (3) List of essential retail pharmacies.--
 ``
        (A) Publication of list of essential retail 
 pharmacies.--For each plan year (beginning with plan 
 year 2028), the Secretary shall publish, on a publicly 
 available internet website of the Centers for Medicare 
 & Medicaid Services, a list of pharmacies that meet the 
 criteria described in subparagraphs
        (A) and
        (B) of 
 paragraph

    (2) to be considered an essential retail 
 pharmacy.
 ``
        (B) Required submissions from pdp sponsors.--For 
 each plan year (beginning with plan year 2028), each 
 PDP sponsor offering a prescription drug plan and each 
 MA organization offering an MA-PD plan shall submit to 
 the Secretary, for the purposes of determining retail 
 pharmacies that meet the criterion specified in 
 subparagraph
        (A) of paragraph

    (2) , a list of retail 
 pharmacies that are affiliates of such sponsor or 
 organization, or are affiliates of a pharmacy benefit 
 manager acting on behalf of such sponsor or 
 organization, at a time, and in a form and manner, 
 specified by the Secretary.
 ``
            (C) Reporting by pdp sponsors and ma 
 organizations.--For each plan year beginning with plan 
 year 2027, each PDP sponsor offering a prescription 
 drug plan and each MA organization offering an MA-PD 
 plan under this part shall submit to the Secretary 
 information on incentive payments and other fees paid 
 by such sponsor or organization to pharmacies, insofar 
 as any such payments or fees are not otherwise 
 reported, at a time, and in a form and manner, 
 specified by the Secretary.
 ``
            (D) Implementation.--Notwithstanding any other 
 provision of law, the Secretary may implement this 
 paragraph by program instruction or otherwise.
 ``
        (E) Nonapplication of paperwork reduction act.--
 Chapter 35 of title 44, United States Code, shall not 
 apply to the implementation of this paragraph.
 ``

    (4) Definition of affiliate; pharmacy benefit manager.--
 In this subsection, the terms `affiliate' and `pharmacy benefit 
 manager' have the meaning given those terms in 

section 1860D-
 12

    (h)

    (7) .''.
            (c) Enforcement.--

    (1) In general.--

Section 1860D-4

    (b)

    (1) of the Social 
 Security Act (42 U.S.C. 1395w-104

    (b)

    (1) ) is amended by adding 
 at the end the following new subparagraph:
 ``
        (F) Enforcement of standards for reasonable and 
 relevant contract terms and conditions.--
 ``
            (i) Allegation submission process.--
 ``
            (I) In general.--Not later than 
 January 1, 2028, the Secretary shall 
 establish a process through which a 
 pharmacy may submit to the Secretary an 
 allegation of a violation by a PDP 
 sponsor offering a prescription drug 
 plan of the standards for reasonable 
 and relevant contract terms and 
 conditions under subparagraph
        (A)
            (ii) , 
 or of subclause
            (VIII) of this clause.
 ``
            (II) Frequency of submission.--
 ``

    (aa) In general.--Except 
 as provided in item

    (bb) , the 
 allegation submission process 
 under this clause shall allow 
 pharmacies to submit any 
 allegations of violations 
 described in subclause
            (I) not 
 more frequently than once per 
 plan year per contract between 
 a pharmacy and a PDP sponsor.
 ``

    (bb) Allegations relating 
 to contract modifications.--In 
 the case where a contract 
 between a pharmacy and a PDP 
 sponsor is modified following 
 the submission of allegations 
 by a pharmacy with respect to 
 such contract and plan year, 
 the allegation submission 
 process under this clause shall 
 allow such pharmacy to submit 
 an additional allegation 
 related to those modifications 
 with respect to such contract 
 and plan year.
 ``
            (III) Access to relevant 
 documents and materials.--A PDP sponsor 
 subject to an allegation under this 
 clause--
 ``

    (aa) shall provide 
 documents or materials, as 
 specified by the Secretary, 
 including contract offers made 
 by such sponsor to such 
 pharmacy or correspondence 
 related to such offers, to the 
 Secretary at a time, and in a 
 form and manner, specified by 
 the Secretary; and
 ``

    (bb) shall not prohibit 
 or otherwise limit the ability 
 of a pharmacy to submit such 
 documents or materials to the 
 Secretary for the purpose of 
 submitting an allegation or 
 providing evidence for such an 
 allegation under this clause.
 ``
            (IV) Standardized template.--The 
 Secretary shall establish a 
 standardized template for pharmacies to 
 use for the submission of allegations 
 described in subclause
            (I) . Such 
 template shall require that the 
 submission include a certification by 
 the pharmacy that the information 
 included is accurate, complete, and 
 true to the best of the knowledge, 
 information, and belief of such 
 pharmacy.
 ``
            (V) Preventing frivolous 
 allegations.--In the case where the 
 Secretary determines that a pharmacy 
 has submitted frivolous allegations 
 under this clause on a routine basis, 
 the Secretary may temporarily prohibit 
 such pharmacy from using the allegation 
 submission process under this clause, 
 as determined appropriate by the 
 Secretary.
 ``
            (VI) Exemption from freedom of 
 information act.--Allegations submitted 
 under this clause shall be exempt from 
 disclosure under 

section 552 of title 
 5, United States Code.
 ``
            (VII) Rule of construction.--
 Nothing in this clause shall be 
 construed as limiting the ability of a 
 pharmacy to pursue other legal actions 
 or remedies, consistent with applicable 
 Federal or State law, with respect to a 
 potential violation of a requirement 
 described in this subparagraph.
 ``
            (VIII) Anti-retaliation and anti-
 coercion.--Consistent with applicable 
 Federal or State law, a PDP sponsor 
 shall not--
 ``

    (aa) retaliate against a 
 pharmacy for submitting any 
 allegations under this clause; 
 or
 ``

    (bb) coerce, intimidate, 
 threaten, or interfere with the 
 ability of a pharmacy to submit 
 any such allegations.
 ``
            (ii) Investigation.--The Secretary shall 
 investigate, as determined appropriate by the 
 Secretary, allegations submitted pursuant to 
 clause
            (i) .
 ``
            (iii) Enforcement.--
 ``
            (I) In general.--In the case 
 where the Secretary determines that a 
 PDP sponsor offering a prescription 
 drug plan has violated the standards 
 for reasonable and relevant contract 
 terms and conditions under subparagraph
        (A)
            (ii) , the Secretary may use 
 authorities under sections 1857

    (g) and 
 1860D-12

    (b)

    (3)
        (E) to impose civil 
 monetary penalties or other 
 intermediate sanctions.
 ``
            (II) Application of civil 
 monetary penalties.--The provisions of 
 

section 1128A (other than subsections

    (a) and

    (b) ) shall apply to a civil 
 monetary penalty under this clause in 
 the same manner as such provisions 
 apply to a penalty or proceeding under 
 

section 1128A

    (a) .''.

    (2) Conforming amendment.--

Section 1857

    (g)

    (1) of the Social 
 Security Act (42 U.S.C. 1395w-27

    (g)

    (1) ) is amended--
        (A) in subparagraph
        (J) , by striking ``or'' after 
 the semicolon;
        (B) by redesignating subparagraph
        (K) as 
 subparagraph
            (L) ;
            (C) by inserting after subparagraph
        (J) , the 
 following new subparagraph:
 ``
        (K) fails to comply with the standards for 
 reasonable and relevant contract terms and conditions 
 under subparagraph
        (A)
            (ii) of 

section 1860D-4

    (b)

    (1) ; 
 or'';
            (D) in subparagraph
            (L) , as redesignated by 
 subparagraph
        (B) , by striking ``through
        (J) '' and 
 inserting ``through
        (K) ''; and
        (E) in the flush matter following subparagraph
            (L) , 
 as so redesignated, by striking ``subparagraphs
        (A) through
        (K) '' and inserting ``subparagraphs
        (A) through
            (L) ''.
            (d) Accountability of Pharmacy Benefit Managers for Violations of 
Reasonable and Relevant Contract Terms and Conditions.--

    (1) In general.--

Section 1860D-12

    (b) of the Social Security 
 Act (42 U.S.C. 1395w-112) is amended by adding at the end the 
 following new paragraph:
 ``

    (9) Accountability of pharmacy benefit managers for 
 violations of reasonable and relevant contract terms and 
 conditions.--For plan years beginning on or after January 1, 
 2028, each contract entered into with a PDP sponsor under this 
 part with respect to a prescription drug plan offered by such 
 sponsor shall provide that any pharmacy benefit manager acting 
 on behalf of such sponsor has a written agreement with the PDP 
 sponsor under which the pharmacy benefit manager agrees to 
 reimburse the PDP sponsor for any amounts paid by such sponsor 
 under 

section 1860D-4

    (b)

    (1)
        (F)
            (iii) 
            (I) to the Secretary as a 
 result of a violation described in such section if such 
 violation is related to a responsibility delegated to the 
 pharmacy benefit manager by such PDP sponsor.''.

    (2) MA-PD plans.--

Section 1857

    (f)

    (3) of the Social Security 
 Act (42 U.S.C. 1395w-27

    (f)

    (3) ) is amended by adding at the end 
 the following new subparagraph:
 ``
        (F) Accountability of pharmacy benefit managers 
 for violations of reasonable and relevant contract 
 terms.--For plan years beginning on or after January 1, 
 2028, 

section 1860D-12

    (b)

    (9) .''.

    (e) Biennial Report on Enforcement and Oversight of Pharmacy Access 
Requirements.--

Section 1860D-42 of the Social Security Act (42 U.S.C. 
1395w-152), as amended by subsection

    (b) , is amended by adding at the 
end the following new subsection:
 ``

    (f) Biennial Report on Enforcement and Oversight of Pharmacy 
Access Requirements.--
 ``

    (1) In general.--Not later than 2 years after the date of 
 enactment of this subsection, and at least once every 2 years 
 thereafter, the Secretary shall publish a report on enforcement 
 and oversight actions and activities undertaken by the 
 Secretary with respect to the requirements under 

section 1860D-
 4

    (b)

    (1) .
 ``

    (2) Limitation.--A report under paragraph

    (1) shall not 
 disclose--
 ``
        (A) identifiable information about individuals or 
 entities unless such information is otherwise publicly 
 available; or
 ``
        (B) trade secrets with respect to any 
 entities.''.

    (f) Funding.--In addition to amounts otherwise available, there is 
appropriated to the Centers for Medicare & Medicaid Services Program 
Management Account, out of any money in the Treasury not otherwise 
appropriated, $188,000,000 for fiscal year 2025, to remain available 
until expended, to carry out this section.

SEC. 3. MODERNIZING AND ENSURING PBM ACCOUNTABILITY.

    (a) In General.--

    (1) Prescription drug plans.--

Section 1860D-12 of the 
 Social Security Act (42 U.S.C. 1395w-112) is amended by adding 
 at the end the following new subsection:
 ``

    (h) Requirements Relating to Pharmacy Benefit Managers.--For plan 
years beginning on or after January 1, 2028:
 ``

    (1) Agreements with pharmacy benefit managers.--Each 
 contract entered into with a PDP sponsor under this part with 
 respect to a prescription drug plan offered by such sponsor 
 shall provide that any pharmacy benefit manager acting on 
 behalf of such sponsor has a written agreement with the PDP 
 sponsor under which the pharmacy benefit manager, and any 
 affiliates of such pharmacy benefit manager, as applicable, 
 agree to meet the following requirements:
 ``
        (A) No income other than bona fide service 
 fees.--
 ``
            (i) In general.--The pharmacy benefit 
 manager and any affiliate of such pharmacy 
 benefit manager shall not derive any 
 remuneration with respect to any services 
 provided on behalf of any entity or individual, 
 in connection with the utilization of covered 
 part D drugs, from any such entity or 
 individual other than bona fide service fees, 
 subject to clauses
            (ii) and
            (iii) .
 ``
            (ii) Incentive payments.--For the 
 purposes of this subsection, an incentive 
 payment (as determined by the Secretary) paid 
 by a PDP sponsor to a pharmacy benefit manager 
 that is performing services on behalf of such 
 sponsor shall be deemed a `bona fide service 
 fee' (even if such payment does not otherwise 
 meet the definition of such term under 
 paragraph

    (7)
        (B) ) if such payment is a flat 
 dollar amount, is consistent with fair market 
 value (as specified by the Secretary), is 
 related to services actually performed by the 
 pharmacy benefit manager or affiliate of such 
 pharmacy benefit manager, on behalf of the PDP 
 sponsor making such payment, in connection with 
 the utilization of covered part D drugs, and 
 meets additional requirements, if any, as 
 determined appropriate by the Secretary.
 ``
            (iii) Clarification on rebates and 
 discounts used to lower costs for covered part 
 d drugs.--Rebates, discounts, and other price 
 concessions received by a pharmacy benefit 
 manager or an affiliate of a pharmacy benefit 
 manager from manufacturers, even if such price 
 concessions are calculated as a percentage of a 
 drug's price, shall not be considered a 
 violation of the requirements of clause
            (i) if 
 they are fully passed through to a PDP sponsor 
 and are compliant with all regulatory and 
 subregulatory requirements related to direct 
 and indirect remuneration for manufacturer 
 rebates under this part, including in cases 
 where a PDP sponsor is acting as a pharmacy 
 benefit manager on behalf of a prescription 
 drug plan offered by such PDP sponsor.
 ``
            (iv) Evaluation of remuneration 
 arrangements.--Components of subsets of 
 remuneration arrangements (such as fees or 
 other forms of compensation paid to or retained 
 by the pharmacy benefit manager or affiliate of 
 such pharmacy benefit manager), as determined 
 appropriate by the Secretary, between pharmacy 
 benefit managers or affiliates of such pharmacy 
 benefit managers, as applicable, and other 
 entities involved in the dispensing or 
 utilization of covered part D drugs (including 
 PDP sponsors, manufacturers, and pharmacies) 
 shall be subject to review by the Secretary, in 
 consultation with the Office of the Inspector 
 General of the Department of Health and Human 
 Services, as determined appropriate by the 
 Secretary. The Secretary, in consultation with 
 the Office of the Inspector General, shall 
 review whether remuneration under such 
 arrangements is consistent with fair market 
 value (as specified by the Secretary) through 
 reviews and assessments of such remuneration, 
 as determined appropriate.
 ``
            (v) Disgorgement.--The pharmacy benefit 
 manager shall disgorge any remuneration paid to 
 such pharmacy benefit manager or an affiliate 
 of such pharmacy benefit manager in violation 
 of this subparagraph to the PDP sponsor.
 ``
            (vi) Additional requirements.--The 
 pharmacy benefit manager shall--
 ``
            (I) enter into a written 
 agreement with any affiliate of such 
 pharmacy benefit manager, under which 
 the affiliate shall identify and 
 disgorge any remuneration described in 
 clause
            (v) to the pharmacy benefit 
 manager; and
 ``
            (II) attest, subject to any 
 requirements determined appropriate by 
 the Secretary, that the pharmacy 
 benefit manager has entered into a 
 written agreement described in 
 subclause
            (I) with any relevant 
 affiliate of the pharmacy benefit 
 manager.
 ``
        (B) Transparency regarding guarantees and cost 
 performance evaluations.--The pharmacy benefit manager 
 shall--
 ``
            (i) define, interpret, and apply, in a 
 fully transparent and consistent manner for 
 purposes of calculating or otherwise evaluating 
 pharmacy benefit manager performance against 
 pricing guarantees or similar cost performance 
 measurements related to rebates, discounts, 
 price concessions, or net costs, terms such 
 as--
 ``
            (I) `generic drug', in a manner 
 consistent with the definition of the 
 term under 

section 423.4 of title 42, 
 Code of Federal Regulations, or a 
 successor regulation;
 ``
            (II) `brand name drug', in a 
 manner consistent with the definition 
 of the term under 

section 423.4 of 
 title 42, Code of Federal Regulations, 
 or a successor regulation;
 ``
            (III) `specialty drug';
 ``
            (IV) `rebate'; and
 ``
            (V) `discount';
 ``
            (ii) identify any drugs, claims, or price 
 concessions excluded from any pricing guarantee 
 or other cost performance measure in a clear 
 and consistent manner; and
 ``
            (iii) where a pricing guarantee or other 
 cost performance measure is based on a pricing 
 benchmark other than the wholesale acquisition 
 cost (as defined in 

section 1847A
            (c) (6)
        (B) ) of 
 a drug, calculate and provide a wholesale 
 acquisition cost-based equivalent to the 
 pricing guarantee or other cost performance 
 measure.
 ``
            (C) Provision of information.--
 ``
            (i) In general.--Not later than July 1 of 
 each year, beginning in 2028, the pharmacy 
 benefit manager shall submit to the PDP 
 sponsor, and to the Secretary, a report, in 
 accordance with this subparagraph, and shall 
 make such report available to such sponsor at 
 no cost to such sponsor in a format specified 
 by the Secretary under paragraph

    (5) . Each such 
 report shall include, with respect to such PDP 
 sponsor and each plan offered by such sponsor, 
 the following information with respect to the 
 previous plan year:
 ``
            (I) A list of all drugs covered 
 by the plan that were dispensed 
 including, with respect to each such 
 drug--
 ``

    (aa) the brand name, 
 generic or non-proprietary 
 name, and National Drug Code;
 ``

    (bb) the number of plan 
 enrollees for whom the drug was 
 dispensed, the total number of 
 prescription claims for the 
 drug (including original 
 prescriptions and refills, 
 counted as separate claims), 
 and the total number of dosage 
 units of the drug dispensed;
 ``
            (cc) the number of 
 prescription claims described 
 in item

    (bb) by each type of 
 dispensing channel through 
 which the drug was dispensed, 
 including retail, mail order, 
 specialty pharmacy, long-term 
 care pharmacy, home infusion 
 pharmacy, or other types of 
 pharmacies or providers;
 ``
            (dd) the average 
 wholesale acquisition cost, 
 listed as cost per day's 
 supply, cost per dosage unit, 
 and cost per typical course of 
 treatment (as applicable);
 ``

    (ee) the average 
 wholesale price for the drug, 
 listed as price per day's 
 supply, price per dosage unit, 
 and price per typical course of 
 treatment (as applicable);
 ``

    (ff) the total out-of-
 pocket spending by plan 
 enrollees on such drug after 
 application of any benefits 
 under the plan, including plan 
 enrollee spending through 
 copayments, coinsurance, and 
 deductibles;
 ``

    (gg) total rebates paid 
 by the manufacturer on the drug 
 as reported under the Detailed 
 DIR Report (or any successor 
 report) submitted by such 
 sponsor to the Centers for 
 Medicare & Medicaid Services;
 ``

    (hh) all other direct or 
 indirect remuneration on the 
 drug as reported under the 
 Detailed DIR Report (or any 
 successor report) submitted by 
 such sponsor to the Centers for 
 Medicare & Medicaid Services;
 ``
            (ii) the average pharmacy 
 reimbursement amount paid by 
 the plan for the drug in the 
 aggregate and disaggregated by 
 dispensing channel identified 
 in item
            (cc) ;
 ``

    (jj) the average National 
 Average Drug Acquisition Cost

    (NADAC) ; and
 ``

    (kk) total manufacturer-
 derived revenue, inclusive of 
 bona fide service fees, 
 attributable to the drug and 
 retained by the pharmacy 
 benefit manager and any 
 affiliate of such pharmacy 
 benefit manager.
 ``
            (II) In the case of a pharmacy 
 benefit manager that has an affiliate 
 that is a retail, mail order, or 
 specialty pharmacy, with respect to 
 drugs covered by such plan that were 
 dispensed, the following information:
 ``

    (aa) The percentage of 
 total prescriptions that were 
 dispensed by pharmacies that 
 are an affiliate of the 
 pharmacy benefit manager for 
 each drug.
 ``

    (bb) The interquartile 
 range of the total combined 
 costs paid by the plan and plan 
 enrollees, per dosage unit, per 
 course of treatment, per 30-day 
 supply, and per 90-day supply 
 for each drug dispensed by 
 pharmacies that are not an 
 affiliate of the pharmacy 
 benefit manager and that are 
 included in the pharmacy 
 network of such plan.
 ``
            (cc) The interquartile 
 range of the total combined 
 costs paid by the plan and plan 
 enrollees, per dosage unit, per 
 course of treatment, per 30-day 
 supply, and per 90-day supply 
 for each drug dispensed by 
 pharmacies that are an 
 affiliate of the pharmacy 
 benefit manager and that are 
 included in the pharmacy 
 network of such plan.
 ``
            (dd) The lowest total 
 combined cost paid by the plan 
 and plan enrollees, per dosage 
 unit, per course of treatment, 
 per 30-day supply, and per 90-
 day supply, for each drug that 
 is available from any pharmacy 
 included in the pharmacy 
 network of such plan.
 ``

    (ee) The difference 
 between the average acquisition 
 cost of the affiliate, such as 
 a pharmacy or other entity that 
 acquires prescription drugs, 
 that initially acquires the 
 drug and the amount reported 
 under subclause
            (I) (jj) for 
 each drug.
 ``

    (ff) A list inclusive of 
 the brand name, generic or non-
 proprietary name, and National 
 Drug Code of covered part D 
 drugs subject to an agreement 
 with a covered entity under 
 

section 340B of the Public 
 Health Service Act for which 
 the pharmacy benefit manager or 
 an affiliate of the pharmacy 
 benefit manager had a contract 
 or other arrangement with such 
 a covered entity in the service 
 area of such plan.
 ``
            (III) Where a drug approved under 
 

section 505
            (c) of the Federal Food, 
 Drug, and Cosmetic Act (referred to in 
 this subclause as the `listed drug') is 
 covered by the plan, the following 
 information:
 ``

    (aa) A list of currently 
 marketed generic drugs approved 
 under 

section 505

    (j) of the 
 Federal Food, Drug, and 
 Cosmetic Act pursuant to an 
 application that references 
 such listed drug that are not 
 covered by the plan, are 
 covered on the same formulary 
 tier or a formulary tier 
 typically associated with 
 higher cost-sharing than the 
 listed drug, or are subject to 
 utilization management that the 
 listed drug is not subject to.
 ``

    (bb) The estimated 
 average beneficiary cost-
 sharing under the plan for a 
 30-day supply of the listed 
 drug.
 ``
            (cc) Where a generic drug 
 listed under item

    (aa) is on a 
 formulary tier typically 
 associated with higher cost-
 sharing than the listed drug, 
 the estimated average cost-
 sharing that a beneficiary 
 would have paid for a 30-day 
 supply of each of the generic 
 drugs described in item

    (aa) , 
 had the plan provided coverage 
 for such drugs on the same 
 formulary tier as the listed 
 drug.
 ``
            (dd) A written 
 justification for providing 
 more favorable coverage of the 
 listed drug than the generic 
 drugs described in item

    (aa) .
 ``

    (ee) The number of 
 currently marketed generic 
 drugs approved under 

section 505

    (j) of the Federal Food, 
 Drug, and Cosmetic Act pursuant 
 to an application that 
 references such listed drug.
 ``
            (IV) Where a reference product 
 (as defined in 

section 351
            (i) of the 
 Public Health Service Act) is covered 
 by the plan, the following information:
 ``

    (aa) A list of currently 
 marketed biosimilar biological 
 products licensed under 

section 351

    (k) of the Public Health 
 Service Act pursuant to an 
 application that refers to such 
 reference product that are not 
 covered by the plan, are 
 covered on the same formulary 
 tier or a formulary tier 
 typically associated with 
 higher cost-sharing than the 
 reference product, or are 
 subject to utilization 
 management that the reference 
 product is not subject to.
 ``

    (bb) The estimated 
 average beneficiary cost-
 sharing under the plan for a 
 30-day supply of the reference 
 product.
 ``
            (cc) Where a biosimilar 
 biological product listed under 
 item

    (aa) is on a formulary 
 tier typically associated with 
 higher cost- sharing than the 
 reference product, the 
 estimated average cost-sharing 
 that a beneficiary would have 
 paid for a 30-day supply of 
 each of the biosimilar 
 biological products described 
 in item

    (aa) , had the plan 
 provided coverage for such 
 products on the same formulary 
 tier as the reference product.
 ``
            (dd) A written 
 justification for providing 
 more favorable coverage of the 
 reference product than the 
 biosimilar biological product 
 described in item

    (aa) .
 ``

    (ee) The number of 
 currently marketed biosimilar 
 biological products licensed 
 under 

section 351

    (k) of the 
 Public Health Service Act, 
 pursuant to an application that 
 refers to such reference 
 product.
 ``
            (V) Total gross spending on 
 covered part D drugs by the plan, not 
 net of rebates, fees, discounts, or 
 other direct or indirect remuneration.
 ``
            (VI) The total amount retained by 
 the pharmacy benefit manager or an 
 affiliate of such pharmacy benefit 
 manager in revenue related to 
 utilization of covered part D drugs 
 under that plan, inclusive of bona fide 
 service fees.
 ``
            (VII) The total spending on 
 covered part D drugs net of rebates, 
 fees, discounts, or other direct and 
 indirect remuneration by the plan.
 ``
            (VIII) An explanation of any 
 benefit design parameters under such 
 plan that encourage plan enrollees to 
 fill prescriptions at pharmacies that 
 are an affiliate of such pharmacy 
 benefit manager, such as mail and 
 specialty home delivery programs, and 
 retail and mail auto-refill programs.
 ``
            (IX) The following information:
 ``

    (aa) A list of all 
 brokers, consultants, advisors, 
 and auditors that receive 
 compensation from the pharmacy 
 benefit manager or an affiliate 
 of such pharmacy benefit 
 manager for referrals, 
 consulting, auditing, or other 
 services offered to PDP 
 sponsors related to pharmacy 
 benefit management services.
 ``

    (bb) The amount of 
 compensation provided by such 
 pharmacy benefit manager or 
 affiliate to each such broker, 
 consultant, advisor, and 
 auditor.
 ``
            (cc) The methodology for 
 calculating the amount of 
 compensation provided by such 
 pharmacy benefit manager or 
 affiliate, for each such 
 broker, consultant, advisor, 
 and auditor.
 ``
            (X) A list of all affiliates of 
 the pharmacy benefit manager.
 ``
            (XI) A summary document submitted 
 in a standardized template developed by 
 the Secretary that includes such 
 information described in subclauses
            (I) through
            (X) .
 ``
            (ii) Written explanation of contracts or 
 agreements with drug manufacturers.--
 ``
            (I) In general.--The pharmacy 
 benefit manager shall, not later than 
 30 days after the finalization of any 
 contract or agreement between such 
 pharmacy benefit manager or an 
 affiliate of such pharmacy benefit 
 manager and a drug manufacturer (or 
 subsidiary, agent, or entity affiliated 
 with such drug manufacturer) that makes 
 rebates, discounts, payments, or other 
 financial incentives related to one or 
 more covered part D drugs or other 
 prescription drugs, as applicable, of 
 the manufacturer directly or indirectly 
 contingent upon coverage, formulary 
 placement, or utilization management 
 conditions on any other covered part D 
 drugs or other prescription drugs, as 
 applicable, submit to the PDP sponsor a 
 written explanation of such contract or 
 agreement.
 ``
            (II) Requirements.--A written 
 explanation under subclause
            (I) shall--
 ``

    (aa) include the 
 manufacturer subject to the 
 contract or agreement, all 
 covered part D drugs and other 
 prescription drugs, as 
 applicable, subject to the 
 contract or agreement and the 
 manufacturers of such drugs, 
 and a high-level description of 
 the terms of such contract or 
 agreement and how such terms 
 apply to such drugs; and
 ``

    (bb) be certified by the 
 Chief Executive Officer, Chief 
 Financial Officer, or General 
 Counsel of such pharmacy 
 benefit manager, or affiliate 
 of such pharmacy benefit 
 manager, as applicable, or an 
 individual delegated with the 
 authority to sign on behalf of 
 one of these officers, who 
 reports directly to the 
 officer.
 ``
            (III) Definition of other 
 prescription drugs.--For purposes of 
 this clause, the term `other 
 prescription drugs' means prescription 
 drugs covered as supplemental benefits 
 under this part or prescription drugs 
 paid outside of this part.
 ``
            (D) Audit rights.--
 ``
            (i) In general.--Not less than once a 
 year, at the request of the PDP sponsor, the 
 pharmacy benefit manager shall allow for an 
 audit of the pharmacy benefit manager to ensure 
 compliance with all terms and conditions under 
 the written agreement described in this 
 paragraph and the accuracy of information 
 reported under subparagraph
            (C) .
 ``
            (ii) Auditor.--The PDP sponsor shall have 
 the right to select an auditor. The pharmacy 
 benefit manager shall not impose any 
 limitations on the selection of such auditor.
 ``
            (iii) Provision of information.--The 
 pharmacy benefit manager shall make available 
 to such auditor all records, data, contracts, 
 and other information necessary to confirm the 
 accuracy of information provided under 
 subparagraph
            (C) , subject to reasonable 
 restrictions on how such information must be 
 reported to prevent redisclosure of such 
 information.
 ``
            (iv) Timing.--The pharmacy benefit 
 manager must provide information under clause
            (iii) and other information, data, and records 
 relevant to the audit to such auditor within 6 
 months of the initiation of the audit and 
 respond to requests for additional information 
 from such auditor within 30 days after the 
 request for additional information.
 ``
            (v) Information from affiliates.--The 
 pharmacy benefit manager shall be responsible 
 for providing to such auditor information 
 required to be reported under subparagraph
            (C) or under clause
            (iii) of this subparagraph that 
 is owned or held by an affiliate of such 
 pharmacy benefit manager.
 ``

    (2) Enforcement.--
 ``
        (A) In general.--Each PDP sponsor shall--
 ``
            (i) disgorge to the Secretary any amounts 
 disgorged to the PDP sponsor by a pharmacy 
 benefit manager under paragraph

    (1)
        (A)
            (v) ;
 ``
            (ii) require, in a written agreement with 
 any pharmacy benefit manager acting on behalf 
 of such sponsor or affiliate of such pharmacy 
 benefit manager, that such pharmacy benefit 
 manager or affiliate reimburse the PDP sponsor 
 for any civil money penalty imposed on the PDP 
 sponsor as a result of the failure of the 
 pharmacy benefit manager or affiliate to meet 
 the requirements of paragraph

    (1) that are 
 applicable to the pharmacy benefit manager or 
 affiliate under the agreement; and
 ``
            (iii) require, in a written agreement 
 with any such pharmacy benefit manager acting 
 on behalf of such sponsor or affiliate of such 
 pharmacy benefit manager, that such pharmacy 
 benefit manager or affiliate be subject to 
 punitive remedies for breach of contract for 
 failure to comply with the requirements 
 applicable under paragraph

    (1) .
 ``
        (B) Reporting of alleged violations.--The 
 Secretary shall make available and maintain a mechanism 
 for manufacturers, PDP sponsors, pharmacies, and other 
 entities that have contractual relationships with 
 pharmacy benefit managers or affiliates of such 
 pharmacy benefit managers to report, on a confidential 
 basis, alleged violations of paragraph

    (1)
        (A) or 
 subparagraph
            (C) .
 ``
            (C) Anti-retaliation and anti-coercion.--
 Consistent with applicable Federal or State law, a PDP 
 sponsor shall not--
 ``
            (i) retaliate against an individual or 
 entity for reporting an alleged violation under 
 subparagraph
        (B) ; or
 ``
            (ii) coerce, intimidate, threaten, or 
 interfere with the ability of an individual or 
 entity to report any such alleged violations.
 ``

    (3) Certification of compliance.--
 ``
        (A) In general.--Each PDP sponsor shall furnish 
 to the Secretary (at a time and in a manner specified 
 by the Secretary) an annual certification of compliance 
 with this subsection, as well as such information as 
 the Secretary determines necessary to carry out this 
 subsection.
 ``
        (B) Implementation.--The Secretary may implement 
 this paragraph by program instruction or otherwise.
 ``

    (4) Rule of construction.--Nothing in this subsection 
 shall be construed as--
 ``
        (A) prohibiting flat dispensing fees or 
 reimbursement or payment for ingredient costs 
 (including customary, industry-standard discounts 
 directly related to drug acquisition that are retained 
 by pharmacies or wholesalers) to entities that acquire 
 or dispense prescription drugs; or
 ``
        (B) modifying regulatory requirements or sub-
 regulatory program instruction or guidance related to 
 pharmacy payment, reimbursement, or dispensing fees.
 ``

    (5) Standard formats.--
 ``
        (A) In general.--Not later than June 1, 2027, the 
 Secretary shall specify standard, machine-readable 
 formats for pharmacy benefit managers to submit annual 
 reports required under paragraph

    (1)
            (C) 
            (i) .
 ``
        (B) Implementation.--The Secretary may implement 
 this paragraph by program instruction or otherwise.
 ``

    (6) Confidentiality.--
 ``
        (A) In general.--Information disclosed by a 
 pharmacy benefit manager, an affiliate of a pharmacy 
 benefit manager, a PDP sponsor, or a pharmacy under 
 this subsection that is not otherwise publicly 
 available or available for purchase shall not be 
 disclosed by the Secretary or a PDP sponsor receiving 
 the information, except that the Secretary may disclose 
 the information for the following purposes:
 ``
            (i) As the Secretary determines necessary 
 to carry out this part.
 ``
            (ii) To permit the Comptroller General to 
 review the information provided.
 ``
            (iii) To permit the Director of the 
 Congressional Budget Office to review the 
 information provided.
 ``
            (iv) To permit the Executive Director of 
 the Medicare Payment Advisory Commission to 
 review the information provided.
 ``
            (v) To the Attorney General for the 
 purposes of conducting oversight and 
 enforcement under this title.
 ``
            (vi) To the Inspector General of the 
 Department of Health and Human Services in 
 accordance with its authorities under the 
 Inspector General Act of 1978 (

section 406 of 
 title 5, United States Code), and other 
 applicable statutes.
 ``
        (B) Restriction on use of information.--The 
 Secretary, the Comptroller General, the Director of the 
 Congressional Budget Office, and the Executive Director 
 of the Medicare Payment Advisory Commission shall not 
 report on or disclose information disclosed pursuant to 
 subparagraph
        (A) to the public in a manner that would 
 identify--
 ``
            (i) a specific pharmacy benefit manager, 
 affiliate, pharmacy, manufacturer, wholesaler, 
 PDP sponsor, or plan; or
 ``
            (ii) contract prices, rebates, discounts, 
 or other remuneration for specific drugs in a 
 manner that may allow the identification of 
 specific contracting parties or of such 
 specific drugs.
 ``

    (7) === Definitions. ===
-For purposes of this subsection:
 ``
        (A) Affiliate.--The term `affiliate' means, with 
 respect to any pharmacy benefit manager or PDP sponsor, 
 any entity that, directly or indirectly--
 ``
            (i) owns or is owned by, controls or is 
 controlled by, or is otherwise related in any 
 ownership structure to such pharmacy benefit 
 manager or PDP sponsor; or
 ``
            (ii) acts as a contractor, principal, or 
 agent to such pharmacy benefit manager or PDP 
 sponsor, insofar as such contractor, principal, 
 or agent performs any of the functions 
 described under subparagraph
            (C) .
 ``
        (B) Bona fide service fee.--The term `bona fide 
 service fee' means a fee that is reflective of the fair 
 market value (as specified by the Secretary, through 
 notice and comment rulemaking) for a bona fide, 
 itemized service actually performed on behalf of an 
 entity, that the entity would otherwise perform (or 
 contract for) in the absence of the service arrangement 
 and that is not passed on in whole or in part to a 
 client or customer, whether or not the entity takes 
 title to the drug. Such fee must be a flat dollar 
 amount and shall not be directly or indirectly based 
 on, or contingent upon--
 ``
            (i) drug price, such as wholesale 
 acquisition cost or drug benchmark price (such 
 as average wholesale price);
 ``
            (ii) the amount of discounts, rebates, 
 fees, or other direct or indirect remuneration 
 with respect to covered part D drugs dispensed 
 to enrollees in a prescription drug plan, 
 except as permitted pursuant to paragraph

    (1)
        (A)
            (ii) ;
 ``
            (iii) coverage or formulary placement 
 decisions or the volume or value of any 
 referrals or business generated between the 
 parties to the arrangement; or
 ``
            (iv) any other amounts or methodologies 
 prohibited by the Secretary.
 ``
            (C) Pharmacy benefit manager.--The term `pharmacy 
 benefit manager' means any person or entity that, 
 either directly or through an intermediary, acts as a 
 price negotiator or group purchaser on behalf of a PDP 
 sponsor or prescription drug plan, or manages the 
 prescription drug benefits provided by such sponsor or 
 plan, including the processing and payment of claims 
 for prescription drugs, the performance of drug 
 utilization review, the processing of drug prior 
 authorization requests, the adjudication of appeals or 
 grievances related to the prescription drug benefit, 
 contracting with network pharmacies, controlling the 
 cost of covered part D drugs, or the provision of 
 related services. Such term includes any person or 
 entity that carries out one or more of the activities 
 described in the preceding sentence, irrespective of 
 whether such person or entity calls itself a `pharmacy 
 benefit manager'.''.

    (2) MA-PD plans.--

Section 1857

    (f)

    (3) of the Social Security 
 Act (42 U.S.C. 1395w-27

    (f)

    (3) ) is amended by adding at the end 
 the following new subparagraph:
 ``
        (F) Requirements relating to pharmacy benefit 
 managers.--For plan years beginning on or after January 
 1, 2028, 

section 1860D-12

    (h) .''.

    (3) Nonapplication of paperwork reduction act.--Chapter 35 
 of title 44, United States Code, shall not apply to the 
 implementation of this subsection.

    (4) Funding.--
        (A) Secretary.--In addition to amounts otherwise 
 available, there is appropriated to the Centers for 
 Medicare & Medicaid Services Program Management 
 Account, out of any money in the Treasury not otherwise 
 appropriated, $113,000,000 for fiscal year 2025, to 
 remain available until expended, to carry out this 
 subsection.
        (B) OIG.--In addition to amounts otherwise 
 available, there is appropriated to the Inspector 
 General of the Department of Health and Human Services, 
 out of any money in the Treasury not otherwise 
 appropriated, $20,000,000 for fiscal year 2025, to 
 remain available until expended, to carry out this 
 subsection.

    (b) Gao Study and Report on Price-Related Compensation Across the 
Supply Chain.--

    (1) Study.--The Comptroller General of the United States 
 (in this subsection referred to as the ``Comptroller General'') 
 shall conduct a study describing the use of compensation and 
 payment structures related to a prescription drug's price 
 within the retail prescription drug supply chain in part D of 
 title XVIII of the Social Security Act (42 U.S.C. 1395w-101 et 
 seq.). Such study shall summarize information from Federal 
 agencies and industry experts, to the extent available, with 
 respect to the following:
        (A) The type, magnitude, other features (such as 
 the pricing benchmarks used), and prevalence of 
 compensation and payment structures related to a 
 prescription drug's price, such as calculating fee 
 amounts as a percentage of a prescription drug's price, 
 between intermediaries in the prescription drug supply 
 chain, including--
            (i) pharmacy benefit managers;
            (ii) PDP sponsors offering prescription 
 drug plans and Medicare Advantage organizations 
 offering MA-PD plans;
            (iii) drug wholesalers;
            (iv) pharmacies;
            (v) manufacturers;
            (vi) pharmacy services administrative 
 organizations;
            (vii) brokers, auditors, consultants, and 
 other entities that--
            (I) advise PDP sponsors offering 
 prescription drug plans and Medicare 
 Advantage organizations offering MA-PD 
 plans regarding pharmacy benefits; or
            (II) review PDP sponsor and 
 Medicare Advantage organization 
 contracts with pharmacy benefit 
 managers; and
            (viii) other service providers that 
 contract with any of the entities described in 
 clauses
            (i) through
            (vii) that may use price-
 related compensation and payment structures, 
 such as rebate aggregators (or other entities 
 that negotiate or process price concessions on 
 behalf of pharmacy benefit managers, plan 
 sponsors, or pharmacies).
        (B) The primary business models and compensation 
 structures for each category of intermediary described 
 in subparagraph
        (A) .
            (C) Variation in price-related compensation 
 structures between affiliated entities (such as 
 entities with common ownership, either full or partial, 
 and subsidiary relationships) and unaffiliated 
 entities.
            (D) Potential conflicts of interest among 
 contracting entities related to the use of prescription 
 drug price-related compensation structures, such as the 
 potential for fees or other payments set as a 
 percentage of a prescription drug's price to advantage 
 formulary selection, distribution, or purchasing of 
 prescription drugs with higher prices.
        (E) Notable differences, if any, in the use and 
 level of price-based compensation structures over time 
 and between different market segments, such as under 
 part D of title XVIII of the Social Security Act (42 
 U.S.C. 1395w-101 et seq.) and the Medicaid program 
 under title XIX of such Act (42 U.S.C. 1396 et seq.).
        (F) The effects of drug price-related compensation 
 structures and alternative compensation structures on 
 Federal health care programs and program beneficiaries, 
 including with respect to cost-sharing, premiums, 
 Federal outlays, biosimilar and generic drug adoption 
 and utilization, drug shortage risks, and the potential 
 for fees set as a percentage of a drug's price to 
 advantage the formulary selection, distribution, or 
 purchasing of drugs with higher prices.
        (G) Other issues determined to be relevant and 
 appropriate by the Comptroller General.

    (2) Report.--Not later than 2 years after the date of 
 enactment of this section, the Comptroller General shall submit 
 to Congress a report containing the results of the study 
 conducted under paragraph

    (1) , together with recommendations 
 for such legislation and administrative action as the 
 Comptroller General determines appropriate.
            (c) MedPAC Reports on Agreements With Pharmacy Benefit Managers 
With Respect to Prescription Drug Plans and MA-PD Plans.--

    (1) In general.--The Medicare Payment Advisory Commission 
 shall submit to Congress the following reports:
        (A) Initial report.--Not later than the first March 
 15 occurring after the date that is 2 years after the 
 date on which the Secretary makes the data available to 
 the Commission, a report regarding agreements with 
 pharmacy benefit managers with respect to prescription 
 drug plans and MA-PD plans. Such report shall include, 
 to the extent practicable--
            (i) a description of trends and patterns, 
 including relevant averages, totals, and other 
 figures for the types of information submitted;
            (ii) an analysis of any differences in 
 agreements and their effects on plan enrollee 
 out-of-pocket spending and average pharmacy 
 reimbursement, and other impacts; and
            (iii) any recommendations the Commission 
 determines appropriate.
        (B) Final report.--Not later than 2 years after the 
 date on which the Commission submits the initial report 
 under subparagraph
        (A) , a report describing any changes 
 with respect to the information described in 
 subparagraph
        (A) over time, together with any 
 recommendations the Commission determines appropriate.

    (2) Funding.--In addition to amounts otherwise available, 
 there is appropriated to the Medicare Payment Advisory 
 Commission, out of any money in the Treasury not otherwise 
 appropriated, $1,000,000 for fiscal year 2025, to remain 
 available until expended, to carry out this subsection.

SEC. 4. 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;
 ``
            (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 seq.), 

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 seq.), 

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;
 ``
            (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 seq.), 

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.''.

SEC. 5. ENSURING ACCURATE PAYMENTS TO PHARMACIES UNDER MEDICAID.

    (a) In General.--

Section 1927

    (f) of the Social Security Act (42 
U.S.C. 1396r-8

    (f) ) is amended--

    (1) in paragraph

    (1)
        (A) --
        (A) by redesignating clause
            (ii) as clause
            (iii) ; 
 and
        (B) by striking ``and'' after the semicolon at the 
 end of clause
            (i) and all that precedes it through 
 ``

    (1) '' and inserting the following:
 ``

    (1) Determining pharmacy actual acquisition costs.--The 
 Secretary shall conduct a survey of retail community pharmacy 
 drug prices and applicable non-retail pharmacy drug prices to 
 determine national average drug acquisition cost benchmarks (as 
 such term is defined by the Secretary) as follows:
 ``
        (A) Use of vendor.--The Secretary may contract 
 services for--
 ``
            (i) with respect to retail community 
 pharmacies, the determination of retail survey 
 prices of the national average drug acquisition 
 cost for covered outpatient drugs that 
 represent a nationwide average of consumer 
 purchase prices for such drugs, net of all 
 discounts, rebates, and other price concessions 
 (to the extent any information with respect to 
 such discounts, rebates, and other price 
 concessions is available) based on a monthly 
 survey of such pharmacies;
 ``
            (ii) with respect to applicable non-
 retail pharmacies--
 ``
            (I) the determination of survey 
 prices, separate from the survey prices 
 described in clause
            (i) , of the non-
 retail national average drug 
 acquisition cost for covered outpatient 
 drugs that represent a nationwide 
 average of consumer purchase prices for 
 such drugs, net of all discounts, 
 rebates, and other price concessions 
 (to the extent any information with 
 respect to such discounts, rebates, and 
 other price concessions is available) 
 based on a monthly survey of such 
 pharmacies; and
 ``
            (II) at the discretion of the 
 Secretary, for each type of applicable 
 non-retail pharmacy, the determination 
 of survey prices, separate from the 
 survey prices described in clause
            (i) or subclause
            (I) of this clause, of the 
 national average drug acquisition cost 
 for such type of pharmacy for covered 
 outpatient drugs that represent a 
 nationwide average of consumer purchase 
 prices for such drugs, net of all 
 discounts, rebates, and other price 
 concessions (to the extent any 
 information with respect to such 
 discounts, rebates, and other price 
 concessions is available) based on a 
 monthly survey of such pharmacies; 
 and'';

    (2) in subparagraph
        (B) of paragraph

    (1) , by striking 
 ``subparagraph
        (A)
            (ii) '' and inserting ``subparagraph
        (A)
            (iii) '';

    (3) in subparagraph
            (D) of paragraph

    (1) , by striking 
 clauses
            (ii) and
            (iii) and inserting the following:
 ``
            (ii) The vendor must update the Secretary 
 no less often than monthly on the survey prices 
 for covered outpatient drugs.
 ``
            (iii) The vendor must differentiate, in 
 collecting and reporting survey data, for all 
 cost information collected, whether a pharmacy 
 is a retail community pharmacy or an applicable 
 non-retail pharmacy, including whether such 
 pharmacy is an affiliate (as defined in 
 subsection

    (k)

    (14) ), and, in the case of an 
 applicable non-retail pharmacy, which type of 
 applicable non-retail pharmacy it is using the 
 relevant pharmacy type indicators included in 
 the guidance required by subsection
            (d) (2) of 
 

section 44123 of the Act titled `An Act to 
 provide for reconciliation pursuant to title II 
 of H. Con. Res. 14.''';

    (4) by adding at the end of paragraph

    (1) the following:
 ``
        (F) Survey reporting.--In order to meet the 
 requirement of 

section 1902

    (a)

    (54) , a State shall 
 require that any retail community pharmacy or 
 applicable non-retail pharmacy in the State that 
 receives any payment, reimbursement, administrative 
 fee, discount, rebate, or other price concession 
 related to the dispensing of covered outpatient drugs 
 to individuals receiving benefits under this title, 
 regardless of whether such payment, reimbursement, 
 administrative fee, discount, rebate, or other price 
 concession is received from the State or a managed care 
 entity or other specified entity (as such terms are 
 defined in 

section 1903
            (m) (9)
            (D) ) directly or from a 
 pharmacy benefit manager or another entity that has a 
 contract with the State or a managed care entity or 
 other specified entity (as so defined), shall respond 
 to surveys conducted under this paragraph.
 ``
        (G) Survey information.--Information on national 
 drug acquisition prices obtained under this paragraph 
 shall be made publicly available in a form and manner 
 to be determined by the Secretary and shall include at 
 least the following:
 ``
            (i) The monthly response rate to the 
 survey including a list of pharmacies not in 
 compliance with subparagraph
        (F) .
 ``
            (ii) The sampling methodology and number 
 of pharmacies sampled monthly.
 ``
            (iii) Information on price concessions to 
 pharmacies, including discounts, rebates, and 
 other price concessions, to the extent that 
 such information may be publicly released and 
 has been collected by the Secretary as part of 
 the survey.
 ``
        (H) Penalties.--
 ``
            (i) In general.--Subject to clauses
            (ii) ,
            (iii) , and
            (iv) , the Secretary shall enforce 
 the provisions of this paragraph with respect 
 to a pharmacy through the establishment of 
 civil money penalties applicable to a retail 
 community pharmacy or an applicable non-retail 
 pharmacy.
 ``
            (ii) Basis for penalties.--The Secretary 
 shall impose a civil money penalty established 
 under this subparagraph on a retail community 
 pharmacy or applicable non-retail pharmacy if--
 ``
            (I) the retail pharmacy or 
 applicable non-retail pharmacy refuses 
 or otherwise fails to respond to a 
 request for information about prices in 
 connection with a survey under this 
 subsection;
 ``
            (II) knowingly provides false 
 information in response to such a 
 survey; or
 ``
            (III) otherwise fails to comply 
 with the requirements established under 
 this paragraph.
 ``
            (iii) Parameters for penalties.--
 ``
            (I) In general.--A civil money 
 penalty established under this 
 subparagraph may be assessed with 
 respect to each violation, and with 
 respect to each non-compliant retail 
 community pharmacy (including a 
 pharmacy that is part of a chain) or 
 non-compliant applicable non-retail 
 pharmacy (including a pharmacy that is 
 part of a chain), in an amount not to 
 exceed $100,000 for each such 
 violation.
 ``
            (II) Considerations.--In 
 determining the amount of a civil money 
 penalty imposed under this 
 subparagraph, the Secretary may 
 consider the size, business structure, 
 and type of pharmacy involved, as well 
 as the type of violation and other 
 relevant factors, as determined 
 appropriate by the Secretary.
 ``
            (iv) Rule of application.--The provisions 
 of 

section 1128A (other than subsections

    (a) and

    (b) ) shall apply to a civil money penalty 
 under this subparagraph in the same manner as 
 such provisions apply to a civil money penalty 
 or proceeding under 

section 1128A

    (a) .
 ``
            (I) Limitation on use of 
 applicable non-retail pharmacy pricing 
 information.--No State shall use 
 pricing information reported by 
 applicable non-retail pharmacies under 
 subparagraph
        (A)
            (ii) to develop or 
 inform payment methodologies for retail 
 community pharmacies.'';

    (5) in paragraph

    (2) --
        (A) in subparagraph
        (A) , by inserting ``, including 
 payment rates and methodologies for determining 
 ingredient cost reimbursement under managed care 
 entities or other specified entities (as such terms are 
 defined in 

section 1903
            (m) (9)
            (D) ),'' after ``under this 
 title''; and
        (B) in subparagraph
        (B) , by inserting ``and the 
 basis for such dispensing fees'' before the semicolon;

    (6) by redesignating paragraph

    (4) as paragraph

    (5) ;

    (7) by inserting after paragraph

    (3) the following new 
 paragraph:
 ``

    (4) Oversight.--
 ``
        (A) In general.--The Inspector General of the 
 Department of Health and Human Services shall conduct 
 periodic studies of the survey data reported under this 
 subsection, as appropriate, including with respect to 
 substantial variations in acquisition costs or other 
 applicable costs, as well as with respect to how 
 internal transfer prices and related party transactions 
 may influence the costs reported by pharmacies that are 
 affiliates (as defined in subsection

    (k)

    (14) ) or are 
 owned by, controlled by, or related under a common 
 ownership structure with a wholesaler, distributor, or 
 other entity that acquires covered outpatient drugs 
 relative to costs reported by pharmacies not affiliated 
 with such entities. The Inspector General shall provide 
 periodic updates to Congress on the results of such 
 studies, as appropriate, in a manner that does not 
 disclose trade secrets or other proprietary 
 information.
 ``
        (B) Appropriation.--There is appropriated to the 
 Inspector General of the Department of Health and Human 
 Services, out of any money in the Treasury not 
 otherwise appropriated, $5,000,000 for fiscal year 
 2025, to remain available until expended, to carry out 
 this paragraph.''; and

    (8) in paragraph

    (5) , as so redesignated--
        (A) by inserting ``, and $9,000,000 for fiscal year 
 2025 and each fiscal year thereafter,'' after ``2010''; 
 and
        (B) by inserting ``Funds appropriated under this 
 paragraph for fiscal year 2025 and any subsequent 
 fiscal year shall remain available until expended.'' 
 after the period.

    (b) 

=== Definitions. ===
-

Section 1927

    (k) of the Social Security Act (42 
U.S.C. 1396r-8

    (k) ) is amended--

    (1) in the matter preceding paragraph

    (1) , by striking ``In 
 the section'' and inserting ``In this section''; and

    (2) by adding at the end the following new paragraphs:
 ``

    (12) Applicable non-retail pharmacy.--The term 
 `applicable non-retail pharmacy' means a pharmacy that is 
 licensed as a pharmacy by the State and that is not a retail 
 community pharmacy, including a pharmacy that dispenses 
 prescription medications to patients primarily through mail and 
 specialty pharmacies. Such term does not include nursing home 
 pharmacies, long-term care facility pharmacies, hospital 
 pharmacies, clinics, charitable or not-for-profit pharmacies, 
 government pharmacies, or low dispensing pharmacies (as defined 
 by the Secretary).
 ``

    (13) Affiliate.--The term `affiliate' means any entity 
 that is owned by, controlled by, or related under a common 
 ownership structure with a pharmacy benefit manager or a 
 managed care entity or other specified entity (as such terms 
 are defined in 

section 1903
            (m) (9)
            (D) ).''.
            (c) Effective Date.--

    (1) In general.--Subject to paragraph

    (2) , the amendments 
 made by this section shall take effect on the first day of the 
 first quarter that begins on or after the date that is 6 months 
 after the date of enactment of this Act.

    (2) Delayed application to applicable non-retail 
 pharmacies.--The pharmacy survey requirements established by 
 the amendments to 

section 1927

    (f) of the Social Security Act 
 (42 U.S.C. 1396r-8

    (f) ) made by this section shall apply to 
 retail community pharmacies beginning on the effective date 
 described in paragraph

    (1) , but shall not apply to applicable 
 non-retail pharmacies until the first day of the first quarter 
 that begins on or after the date that is 18 months after the 
 date of enactment of this Act.
            (d) Identification of Applicable Non-Retail Pharmacies.--

    (1) In general.--Not later than January 1, 2027, the 
 Secretary of Health and Human Services shall publish guidance 
 specifying pharmacies that meet the definition of applicable 
 non-retail pharmacies (as such term is defined in subsection

    (k)

    (12) of 

section 1927 of the Social Security Act (42 U.S.C. 
 1396r-8), as added by subsection

    (b) ), and that will be subject 
 to the survey requirements under subsection

    (f)

    (1) of such 
 section, as amended by subsection

    (a) .

    (2) Inclusion of pharmacy type indicators.--The guidance 
 published under paragraph

    (1) shall include pharmacy type 
 indicators to distinguish between different types of applicable 
 non-retail pharmacies, such as pharmacies that dispense 
 prescriptions primarily through the mail and pharmacies that 
 dispense prescriptions that require special handling or 
 distribution. An applicable non-retail pharmacy may be 
 identified through multiple pharmacy type indicators.

    (e) Implementation.--

    (1) Implementation of the amendments made by this section 
 shall be exempt from the requirements of 

section 553 of title 
 5, United States Code.

    (f) Nonapplication of Paperwork Reduction Act.--Chapter 35 of title 
44, United States Code, shall not apply to any data collection 
undertaken by the Secretary of Health and Human Services under 

section 1927

    (f) of the Social Security Act (42 U.S.C. 1396r-8

    (f) ), as amended 
by this section.

SEC. 6. PREVENTING THE USE OF ABUSIVE SPREAD PRICING IN MEDICAID.

    (a) In General.--

Section 1927 of the Social Security Act (42 U.S.C. 
1396r-8) is amended--

    (1) in subsection

    (e) , by adding at the end the following 
 new paragraph:
 ``

    (6) Transparent prescription drug pass- through pricing 
 required.--
 ``
        (A) In general.--A contract between the State and 
 a pharmacy benefit manager (referred to in this 
 paragraph as a `PBM'), or a contract between the State 
 and a managed care entity or other specified entity (as 
 such terms are defined in 

section 1903
            (m) (9)
            (D) and 
 collectively referred to in this paragraph as the 
 `entity') that includes provisions making the entity 
 responsible for coverage of covered outpatient drugs 
 dispensed to individuals enrolled with the entity, 
 shall require that payment for such drugs and related 
 administrative services (as applicable), including 
 payments made by a PBM on behalf of the State or 
 entity, is based on a transparent prescription drug 
 pass-through pricing model under which--
 ``
            (i) any payment made by the entity or the 
 PBM (as applicable) for such a drug--
 ``
            (I) is limited to--
 ``

    (aa) ingredient cost; and
 ``

    (bb) a professional 
 dispensing fee that is not less 
 than the professional 
 dispensing fee that the State 
 would pay if the State were 
 making the payment directly in 
 accordance with the State plan;
 ``
            (II) is passed through in its 
 entirety (except as reduced under 
 Federal or State laws and regulations 
 in response to instances of waste, 
 fraud, or abuse) by the entity or PBM 
 to the pharmacy or provider that 
 dispenses the drug; and
 ``
            (III) is made in a manner that is 
 consistent with sections 447.502, 
 447.512, 447.514, and 447.518 of title 
 42, Code of Federal Regulations (or any 
 successor regulation) as if such 
 requirements applied directly to the 
 entity or the PBM, except that any 
 payment by the entity or the PBM for 
 the ingredient cost of such drug 
 purchased by a covered entity (as 
 defined in subsection

    (a)

    (5)
        (B) ) may 
 exceed the actual acquisition cost (as 
 defined in 447.502 of title 42, Code of 
 Federal Regulations, or any successor 
 regulation) for such drug if--
 ``

    (aa) such drug was 
 subject to an agreement under 
 

section 340B of the Public 
 Health Service Act;
 ``

    (bb) such payment for the 
 ingredient cost of such drug 
 does not exceed the maximum 
 payment that would have been 
 made by the entity or the PBM 
 for the ingredient cost of such 
 drug if such drug had not been 
 purchased by such covered 
 entity; and
 ``
            (cc) such covered entity 
 reports to the Secretary (in a 
 form and manner specified by 
 the Secretary), on an annual 
 basis and with respect to 
 payments for the ingredient 
 costs of such drugs so 
 purchased by such covered 
 entity that are in excess of 
 the actual acquisition costs 
 for such drugs, the aggregate 
 amount of such excess;
 ``
            (ii) payment to the entity or the PBM (as 
 applicable) for administrative services 
 performed by the entity or PBM is limited to an 
 administrative fee that reflects the fair 
 market value (as defined by the Secretary) of 
 such services;
 ``
            (iii) the entity or the PBM (as 
 applicable) makes available to the State, and 
 the Secretary upon request in a form and manner 
 specified by the Secretary, all costs and 
 payments related to covered outpatient drugs 
 and accompanying administrative services (as 
 described in clause
            (ii) ) incurred, received, 
 or made by the entity or the PBM, broken down 
 (as specified by the Secretary), to the extent 
 such costs and payments are attributable to an 
 individual covered outpatient drug, by each 
 such drug, including any ingredient costs, 
 professional dispensing fees, administrative 
 fees (as described in clause
            (ii) ), post-sale 
 and post-invoice fees, discounts, or related 
 adjustments such as direct and indirect 
 remuneration fees, and any and all other 
 remuneration, as defined by the Secretary; and
 ``
            (iv) any form of spread pricing whereby 
 any amount charged or claimed by the entity or 
 the PBM (as applicable) that exceeds the amount 
 paid to the pharmacies or providers on behalf 
 of the State or entity, including any post-sale 
 or post-invoice fees, discounts, or related 
 adjustments such as direct and indirect 
 remuneration fees or assessments, as defined by 
 the Secretary, (after allowing for an 
 administrative fee as described in clause
            (ii) ) 
 is not allowable for purposes of claiming 
 Federal matching payments under this title.
 ``
        (B) Publication of information.--The Secretary 
 shall publish, not less frequently than on an annual 
 basis and in a manner that does not disclose the 
 identity of a particular covered entity or 
 organization, information received by the Secretary 
 pursuant to subparagraph
        (A)
            (iii) 
            (III) that is broken 
 out by State and by each of the following categories of 
 covered entity within each such State:
 ``
            (i) Covered entities described in 
 subparagraph
        (A) of 

section 340B

    (a)

    (4) of the 
 Public Health Service Act.
 ``
            (ii) Covered entities described in 
 subparagraphs
        (B) through
        (K) of such section.
 ``
            (iii) Covered entities described in 
 subparagraph
            (L) of such section.
 ``
            (iv) Covered entities described in 
 subparagraph
            (M) of such section.
 ``
            (v) Covered entities described in 
 subparagraph
        (N) of such section.
 ``
            (vi) Covered entities described in 
 subparagraph
        (O) of such section.''; and

    (2) in subsection

    (k) , as previously amended by this title, 
 by adding at the end the following new paragraph:
 ``

    (14) Pharmacy benefit manager.--The term `pharmacy 
 benefit manager' means any person or entity that, either 
 directly or through an intermediary, acts as a price negotiator 
 or group purchaser on behalf of a State, managed care entity 
 (as defined in 

section 1903
            (m) (9)
            (D) ), or other specified 
 entity (as so defined), or manages the prescription drug 
 benefits provided by a State, managed care entity, or other 
 specified entity, including the processing and payment of 
 claims for prescription drugs, the performance of drug 
 utilization review, the processing of drug prior authorization 
 requests, the managing of appeals or grievances related to the 
 prescription drug benefits, contracting with pharmacies, 
 controlling the cost of covered outpatient drugs, or the 
 provision of services related thereto. Such term includes any 
 person or entity that acts as a price negotiator (with regard 
 to payment amounts to pharmacies and providers for a covered 
 outpatient drug or the net cost of the drug) or group purchaser 
 on behalf of a State, managed care entity, or other specified 
 entity or that carries out 1 or more of the other activities 
 described in the preceding sentence, irrespective of whether 
 such person or entity calls itself a pharmacy benefit 
 manager.''.

    (b) Conforming Amendments.--

Section 1903
            (m) of such Act (42 U.S.C. 
1396b
            (m) ) is amended--

    (1) in paragraph

    (2)
        (A)
            (xiii) --
        (A) by striking ``and
            (III) '' and inserting 
 ``
            (III) '';
        (B) by inserting before the period at the end the 
 following: ``, and
            (IV) if the contract includes 
 provisions making the entity responsible for coverage 
 of covered outpatient drugs, the entity shall comply 
 with the requirements of 

section 1927

    (e)

    (6) ''; and
            (C) by moving the margin 2 ems to the left; and

    (2) by adding at the end the following new paragraph:
 ``

    (10) No payment shall be made under this title to 
 a State with respect to expenditures incurred by the 
 State for payment for services provided by an other 
 specified entity (as defined in paragraph

    (9)
            (D) 
            (iii) ) 
 unless such services are provided in accordance with a 
 contract between the State and such entity which 
 satisfies the requirements of paragraph

    (2)
        (A)
            (xiii) .''.
            (c) Effective Date.--The amendments made by this section shall 
apply to contracts between States and managed care entities, other 
specified entities, or pharmacy benefit managers that have an effective 
date beginning on or after the date that is 18 months after the date of 
enactment of this Act.
            (d) Implementation.--

    (1) Implementation of the amendments made by this section 
 shall be exempt from the requirements of 

section 553 of title 
 5, United States Code.

    (e) Nonapplication of Paperwork Reduction Act.--Chapter 35 of title 
44, United States Code, shall not apply to any data collection 
undertaken by the Secretary of Health and Human Services under 

section 1927

    (e) of the Social Security Act (42 U.S.C. 1396r-8

    (e) ), as amended 
by this section.
 <all>