119-hr950

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 950 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 950

 To amend title XVIII of the Social Security Act to establish pharmacy 
 benefit manager reporting requirements with respect to prescription 
 drug plans and MA-PD plans under Medicare part D.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 February 4, 2025

 Mr. Landsman (for himself and Mrs. Harshbarger) introduced the 
 following bill; which was referred to the Committee on Energy and 
 Commerce, and in addition to the Committee on Ways and Means, for a 
 period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
 committee concerned

_______________________________________________________________________

 A BILL

 To amend title XVIII of the Social Security Act to establish pharmacy 
 benefit manager reporting requirements with respect to prescription 
 drug plans and MA-PD plans under Medicare part D.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Saving Seniors Money on 
Prescriptions Act''.

SEC. 2. PHARMACY BENEFIT MANAGER REPORTING REQUIREMENTS WITH RESPECT TO 
 PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    (a) In General.--

    (1) Prescription drug plans.--

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

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

    (1) Agreements with pharmacy benefit managers.--Each 
 contract entered into with a PDP sponsor under this part with 
 respect to a prescription drug plan offered by such sponsor 
 shall provide that any pharmacy benefit manager acting on 
 behalf of such sponsor has a written agreement with the PDP 
 sponsor under which the pharmacy benefit manager agrees to meet 
 the following requirements:
 ``
        (A) Transparency regarding guarantees and cost 
 performance evaluations.--The pharmacy benefit manager 
 shall--
 ``
            (i) define, interpret, and apply terms 
 (such as generic drug, brand name drug 
 (consistent with the definition of those terms 
 under 

section 423.4 of title 42, Code of 
 Federal Regulations, or a successor 
 regulation), specialty drug, rebate, and 
 discount) in a fully transparent and consistent 
 manner for purposes of calculating or otherwise 
 evaluating pharmacy benefit manager performance 
 against pricing guarantees or similar cost 
 performance measurements related to rebates, 
 discounts, price concessions, or net costs;
 ``
            (ii) identify any drugs, claims, or price 
 concessions excluded from any pricing guarantee 
 or other cost performance calculation or 
 evaluation in a clear and consistent manner; 
 and
 ``
            (iii) where a pricing guarantee or other 
 cost performance measure is based on a pricing 
 benchmark other than the wholesale acquisition 
 cost (as defined in 

section 1847A
            (c) (6)
        (B) ) of 
 a drug, calculate and provide a wholesale 
 acquisition cost-based equivalent to the 
 pricing guarantee or other cost performance 
 measure in the contract.
 ``
        (B) Provision of information.--
 ``
            (i) In general.--Not later than July 1 of 
 each year, the pharmacy benefit manager shall 
 submit to the PDP sponsor, and to the Secretary 
 upon request, a report, in accordance with this 
 subparagraph, and shall make such report 
 available to the sponsor at no cost to such 
 sponsor in a machine-readable format and, as 
 the Secretary may determine, other formats. 
 Each such report shall include, with respect to 
 such PDP sponsor and each plan offered by such 
 sponsor, the following information with respect 
 to the previous plan year:
 ``
            (I) A list of all drugs covered 
 by the plan that were dispensed 
 including, with respect to each such 
 drug--
 ``

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

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

    (bb) that 
 were dispensed using each type 
 of dispensing channel, 
 including retail, mail order, 
 specialty pharmacy, or other 
 types of pharmacies or 
 providers as defined by the 
 pharmacy benefit manager;
 ``
            (dd) the average 
 wholesale acquisition cost, 
 listed as cost per day's 
 supply, cost per dosage unit, 
 and cost per typical course of 
 treatment (as applicable);
 ``

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

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

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

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

    (jj) the average National 
 Average Drug Acquisition Cost

    (NADAC) for retail community 
 pharmacies; and
 ``

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

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

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

    (ee) The difference 
 between the average acquisition 
 cost of the affiliate that 
 initially acquires the drug and 
 the amount reported under 
 subclause
            (I) (jj) for each 
 drug.
 ``

    (ff) A list of 
 prescription drugs for which 
 the pharmacy benefit manager or 
 an affiliate of the pharmacy 
 benefit manager had a contract 
 or other arrangement with a 
 covered entity under 

section 340B of the Public Health 
 Service Act in the service area 
 of such plan.
 ``
            (III) Where a drug approved under 
 

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

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

section 505

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

    (bb) The estimated 
 average beneficiary cost-
 sharing under the plan for a 
 30-day supply of the listed 
 drug.
 ``
            (cc) The estimated 
 average cost-sharing that a 
 beneficiary would have paid for 
 a 30-day supply of each of the 
 generic drugs described in item

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

    (aa) .
 ``
            (IV) Where a reference product 
 (as defined in 

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

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

section 351

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

    (bb) The estimated 
 average beneficiary cost-
 sharing under the plan for a 
 30-day supply of the reference 
 product.
 ``
            (cc) The estimated 
 average cost-sharing that a 
 beneficiary would have paid for 
 a 30-day supply of each of the 
 biosimilar biological products 
 described in item

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

    (aa) .
 ``
            (V) Total gross spending on 
 prescription drugs by the plan, not net 
 of rebates, fees, discounts, or other 
 direct or indirect remuneration.
 ``
            (VI) The total amount retained by 
 the pharmacy benefit manager or an 
 affiliate of such pharmacy benefit 
 manager in revenue related to 
 utilization of prescription drugs under 
 that plan, inclusive of bona fide 
 service fees.
 ``
            (VII) The total spending on 
 prescription drugs net of rebates, 
 fees, discounts, or other direct and 
 indirect remuneration by the plan.
 ``
            (VIII) An explanation of any 
 benefit design parameters under such 
 plan that encourage plan enrollees to 
 fill prescriptions at pharmacies that 
 are an affiliate of such pharmacy 
 benefit manager, such as mail and 
 specialty home delivery programs, and 
 retail and mail auto-refill programs.
 ``
            (IX) A list of all brokers, 
 consultants, advisors, and auditors 
 that receive compensation from the 
 pharmacy benefit manager or an 
 affiliate of such pharmacy benefit 
 manager for referrals, consulting, 
 auditing, or other services offered to 
 PDP sponsors related to pharmacy 
 benefit management services.
 ``
            (X) A list of all pharmacies, 
 wholesalers, distributors, private 
 labelers, providers, group purchasing 
 organizations, health plans, or any 
 other entity that is an affiliate of 
 the pharmacy benefit manager.
 ``
            (XI) A summary document submitted 
 in a standardized template developed by 
 the Secretary that includes such 
 information described in subclauses
            (I) through
            (X) .
 ``
            (ii) Standard formats.--Not later than 
 June 1, 2025, the Secretary shall specify 
 standard formats for pharmacy benefit managers 
 to submit annual reports required under clause
            (i) .
 ``
            (iii) Confidentiality.--
 ``
            (I) In general.--Information 
 disclosed by a pharmacy benefit manager 
 or PDP sponsor under this subsection 
 that is not otherwise publicly 
 available shall not be disclosed by the 
 Secretary or a PDP sponsor receiving 
 the information, except that the 
 Secretary may disclose the information 
 for the following purposes:
 ``

    (aa) As the Secretary 
 determines to be necessary to 
 carry out this part.
 ``

    (bb) To permit the 
 Comptroller General to review 
 the information provided.
 ``
            (cc) To permit the 
 Director of the Congressional 
 Budget Office to review the 
 information provided.
 ``
            (dd) To permit the 
 Executive Director of the 
 Medicare Payment Advisory 
 Commission to review the 
 information provided.
 ``

    (ee) To the Attorney 
 General for the purposes of 
 conducting oversight and 
 enforcement under this title.
 ``
            (II) Restriction on use of 
 information.--The Secretary, the 
 Comptroller General, the Director of 
 the Congressional Budget Office, and 
 the Executive Director of the Medicare 
 Payment Advisory Commission shall not 
 report on or disclose information 
 disclosed pursuant to subclause
            (I) to 
 the public in a manner that would 
 identify a specific pharmacy benefit 
 manager, affiliate, PDP sponsor, or 
 plan, or prices charged for specific 
 drugs.
 ``
            (C) Audit rights.--
 ``
            (i) In general.--Not less than once a 
 year, at the request of the PDP sponsor, the 
 pharmacy benefit manager shall allow for an 
 audit of the pharmacy benefit manager to ensure 
 compliance with all terms and conditions under 
 the contract and the accuracy of information 
 reported under subparagraph
        (B) .
 ``
            (ii) Auditor.--The PDP sponsor shall have 
 the right to select an auditor. The pharmacy 
 benefit manager shall not impose any 
 limitations on the selection of such auditor.
 ``
            (iii) Provision of information.--The 
 pharmacy benefit manager shall make available 
 to such auditor all records, data, contracts, 
 and other information necessary to confirm the 
 accuracy of information provided under 
 subparagraph
        (B) , subject to reasonable 
 restrictions on how such information must be 
 reported (as determined by the Secretary) to 
 prevent redisclosure of such information.
 ``
            (iv) Timing.--The pharmacy benefit 
 manager must provide information under clause
            (iii) and other information, data, and records 
 relevant to the audit to such auditor within 6 
 months of the initiation of the audit and 
 respond to requests for additional information 
 from such auditor within 30 days after the 
 request for additional information.
 ``
            (v) Information from affiliates.--The 
 pharmacy benefit manager shall be responsible 
 for providing to such auditor information 
 required to be reported under subparagraph
        (B) that is owned or held by an affiliate of such 
 pharmacy benefit manager.
 ``
            (D) Enforcement.--The pharmacy benefit manager 
 shall--
 ``
            (i) reimburse the PDP sponsor for any 
 civil money penalty imposed on the PDP sponsor 
 as a result of the failure of the pharmacy 
 benefit manager to meet the requirements of 
 this paragraph that are applicable to the 
 pharmacy benefit manager under the agreement; 
 and
 ``
            (ii) be subject to punitive remedies for 
 breach of contract for failure to comply with 
 the requirements applicable under this 
 paragraph.
 ``

    (2) Certification of compliance.--Each PDP sponsor shall 
 furnish to the Secretary (in a time and manner specified by the 
 Secretary) an annual certification of compliance with this 
 subsection, as well as such information as the Secretary 
 determines necessary to carry out this subsection.
 ``

    (3) === Definitions. ===
-For purposes of this subsection:
 ``
        (A) Affiliate.--The term `affiliate' means any 
 entity that is owned by, controlled by, or related 
 under a common ownership structure with a pharmacy 
 benefit manager (including an entity owned or 
 controlled by the PDP sponsor) or that acts as a 
 contractor or agent to such pharmacy benefit manager, 
 insofar as such contractor or agent performs any of the 
 functions described under subparagraph
        (B) .
 ``
        (B) Pharmacy benefit manager.--The term `pharmacy 
 benefit manager' means any person or entity that, 
 either directly or through an intermediary, acts as a 
 price negotiator or group purchaser on behalf of a PDP 
 sponsor or prescription drug plan, or manages the 
 prescription drug benefits provided by such sponsor or 
 plan, including the processing and payment of claims 
 for prescription drugs, the performance of drug 
 utilization review, the processing of drug prior 
 authorization requests, the adjudication of appeals or 
 grievances related to the prescription drug benefit, 
 contracting with network pharmacies, controlling the 
 cost of covered part D drugs, or the provision of 
 services related thereto. Such term includes any person 
 or entity that carries out one or more of the 
 activities described in the preceding sentence, 
 irrespective of whether such person or entity calls 
 itself a `pharmacy benefit manager'.''.

    (2) MA-PD plans.--

Section 1857

    (f)

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

    (f)

    (3) ) is amended by adding at the end 
 the following new subparagraph:
 ``
        (F) Pharmacy benefit manager reporting 
 requirements.--For plan years beginning on or after 
 January 1, 2028, 

section 1860D-12

    (h) .''.

    (b) GAO Study and Report on Certain Reporting Requirements.--

    (1) Study.--The Comptroller General of the United States 
 (in this subsection referred to as the ``Comptroller General'') 
 shall conduct a study on Federal and State reporting 
 requirements for health plans and pharmacy benefit managers 
 related to the transparency of prescription drug costs and 
 prices. Such study shall include an analysis of the following:
        (A) Federal statutory and regulatory reporting 
 requirements for health plans and pharmacy benefit 
 managers related to prescription drug costs and prices.
        (B) State statutory and regulatory reporting 
 requirements for health plans and pharmacy benefit 
 managers related to prescription drug costs and prices.
            (C) The extent to which the statutory and 
 regulatory reporting requirements identified in clauses
            (i) and
            (ii) overlap and conflict.
            (D) The resources required by health plans and 
 pharmacy benefit managers to comply with the reporting 
 requirements described in clauses
            (i) and
            (ii) .
        (E) Other items determined appropriate by the 
 Comptroller General.

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

    (1) , together with recommendations for legislation and 
 administrative actions that would streamline and reduce the 
 burden associated with the reporting requirements for health 
 plans and pharmacy benefit managers described in paragraph

    (1) .
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