Prescription Pricing for the People Act of 2019

II Calendar No. 131 116TH CONGRESS 1ST SESSION S. 1227 To require the Federal Trade Commission to study the role of intermediaries in the pharmaceutical supply chain and provide Congress with appro- priate policy recommendations, and for other purposes. IN THE SENATE OF THE UNITED STATES APRIL 29, 2019 Mr. GRASSLEY (for himself, Ms. CANTWELL, Mr. DAINES, Mr. BLUMENTHAL, Mr. LANKFORD, Ms. ERNST, Mr. TILLIS, Mrs. BLACKBURN, and Mr. WHITEHOUSE) introduced the following bill; which was read twice and re- ferred to the Committee on the Judiciary JUNE 28 (legislative day, JUNE 27), 2019 Reported by Mr. GRAHAM, with an amendment [Strike out all after the enacting clause and insert the part printed in italic] A BILL To require the Federal Trade Commission to study the role of intermediaries in the pharmaceutical supply chain and provide Congress with appropriate policy recommenda- tions, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 21:08 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1227.RS S1227 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 1227 RS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Prescription Pricing 2 for the People Act of 2019’’. 3 SEC. 2. DEFINITIONS. 4 In this Act: 5 (1) APPROPRIATE COMMITTEES OF CON- 6 GRESS.—The term ‘‘appropriate committees of Con- 7 gress’’ means— 8 (A) the Committee on the Judiciary of the 9 Senate; and 10 (B) the Committee on the Judiciary of the 11 House of Representatives. 12 (2) COMMISSION.—The term ‘‘Commission’’ 13 means the Federal Trade Commission. 14 SEC. 3. STUDY OF PHARMACEUTICAL SUPPLY CHAIN 15 INTERMEDIARIES AND MERGER ACTIVITY. 16 (a) REPORT.—Not later than 1 year after the date 17 of enactment of this Act, the Commission shall submit to 18 the appropriate committees of Congress a report that— 19 (1) addresses at minimum— 20 (A) whether pharmacy benefit managers— 21 (i) charge payers (including Medicare 22 and Medicaid) a higher price than the re- 23 imbursement rate at which the pharmacy 24 benefit managers reimburses competing 25 pharmacies while reimbursing pharmacies 26 VerDate Sep 11 2014 21:08 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6401 E:\BILLS\S1227.RS S1227 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 1227 RS in which the pharmacy benefit managers 1 have an ownership interest at the rate 2 charged to payers; 3 (ii) steer patients to pharmacies in 4 which the pharmacy benefit managers have 5 an ownership interest; 6 (iii) audit or review proprietary data, 7 including acquisition costs, patient infor- 8 mation, or dispensing information, of com- 9 peting pharmacies that can be used for 10 anticompetitive purposes; or 11 (iv) use formulary designs to depress 12 the market share of low-cost, lower-rebate 13 prescription drugs; 14 (B) the current state of competition in the 15 pharmaceutical supply chain, particularly with 16 regard to intermediaries and the recent vertical 17 integrations of pharmacy benefit managers with 18 insurance companies or other payers of pre- 19 scription drug benefits; 20 (C) how companies and payers assess the 21 benefits, costs, and risks of contracting with 22 intermediaries, including pharmacy services ad- 23 ministrative organizations, and whether more 24 information about the roles of intermediaries 25 VerDate Sep 11 2014 21:08 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6401 E:\BILLS\S1227.RS S1227 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 1227 RS should be available to consumers and payers; 1 and 2 (D) whether there are any specific legal or 3 regulatory obstacles the Commission currently 4 faces in ensuring a competitive and transparent 5 marketplace in the pharmaceutical supply 6 chain, including the pharmacy benefit manager 7 marketplace and pharmacy services administra- 8 tive organizations; and 9 (2) provides— 10 (A) observations or conclusions drawn 11 from the November 2017 roundtable entitled 12 ‘‘Understanding Competition in Prescription 13 Drug Markets: Entry and Supply Chain Dy- 14 namics’’, and any similar efforts; 15 (B) specific actions the Commission in- 16 tends to take as a result of the November 2017 17 roundtable, and any similar efforts, including a 18 detailed description of relevant forthcoming ac- 19 tions, additional research or roundtable discus- 20 sions, consumer education efforts, or enforce- 21 ment actions; and 22 (C) policy or legislative recommendations 23 to— 24 VerDate Sep 11 2014 21:08 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6401 E:\BILLS\S1227.RS S1227 pamtmann on DSKBFK8HB2PROD with BILLS 5 •S 1227 RS (i) improve transparency and competi- 1 tion in the pharmaceutical supply chain; 2 (ii) prevent and deter anticompetitive 3 behavior in the pharmaceutical supply 4 chain; and 5 (iii) best ensure that consumers ben- 6 efit from any cost savings or efficiencies 7 that may result from mergers and consoli- 8 dations. 9 (b) INTERIM REPORT.—Not later than 180 days 10 after the date of enactment of this Act, the Commission 11 shall submit to the appropriate committees of Congress 12 an interim report on the progress of the report required 13 by subsection (a), along with preliminary findings and 14 conclusions based on information collected to that date. 15 SECTION 1. SHORT TITLE. 16 This Act may be cited as the ‘‘Prescription Pricing 17 for the People Act of 2019’’. 18 SEC. 2. DEFINITIONS. 19 In this Act: 20 (1) APPROPRIATE COMMITTEES OF CONGRESS.— 21 The term ‘‘appropriate committees of Congress’’ 22 means— 23 (A) the Committee on the Judiciary of the 24 Senate; and 25 VerDate Sep 11 2014 21:08 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\S1227.RS S1227 pamtmann on DSKBFK8HB2PROD with BILLS 6 •S 1227 RS (B) the Committee on the Judiciary of the 1 House of Representatives. 2 (2) COMMISSION.—The term ‘‘Commission’’ 3 means the Federal Trade Commission. 4 SEC. 3. STUDY OF PHARMACEUTICAL SUPPLY CHAIN INTER- 5 MEDIARIES AND MERGER ACTIVITY. 6 (a) REPORT.—Not later than 1 year after the date of 7 enactment of this Act, the Commission shall submit to the 8 appropriate committees of Congress a report that— 9 (1) addresses at minimum— 10 (A) whether pharmacy benefit managers— 11 (i) charge payers a higher price than 12 the reimbursement rate at which the phar- 13 macy benefit managers reimburse phar- 14 macies owned by the pharmacy benefit 15 manager and pharmacies not owned by the 16 pharmacy benefit manager; 17 (ii) steer patients for competitive ad- 18 vantage to any pharmacy, including a re- 19 tail, mail-order, or any other type of phar- 20 macy, in which the pharmacy benefit man- 21 agers have an ownership interest; 22 (iii) audit or review proprietary data, 23 including acquisition costs, patient infor- 24 mation, or dispensing information, of phar- 25 VerDate Sep 11 2014 21:08 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\S1227.RS S1227 pamtmann on DSKBFK8HB2PROD with BILLS 7 •S 1227 RS macies not owned by the pharmacy benefit 1 manager and use such proprietary data to 2 increase revenue or market share for com- 3 petitive advantage; or 4 (iv) use formulary designs to increase 5 the market share of higher cost prescription 6 drugs or depress the market share of lower 7 cost prescription drugs (each net of rebates 8 and discounts); 9 (B) trends or observations on the state of 10 competition in the healthcare supply chain, par- 11 ticularly with regard to intermediaries and their 12 integration with other intermediaries, suppliers, 13 or payers of prescription drug benefits; 14 (C) how companies and payers assess the 15 benefits, costs, and risks of contracting with 16 intermediaries, including pharmacy services ad- 17 ministrative organizations, and whether more 18 information about the roles of intermediaries 19 should be available to consumers and payers; 20 and 21 (D) whether there are any specific legal or 22 regulatory obstacles the Commission currently 23 faces in enforcing the antitrust and consumer 24 protection laws in the pharmaceutical supply 25 VerDate Sep 11 2014 21:08 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\S1227.RS S1227 pamtmann on DSKBFK8HB2PROD with BILLS 8 •S 1227 RS chain, including the pharmacy benefit manager 1 marketplace and pharmacy services administra- 2 tive organizations; and 3 (2) provides— 4 (A) observations or conclusions drawn from 5 the November 2017 roundtable entitled ‘‘Under- 6 standing Competition in Prescription Drug Mar- 7 kets: Entry and Supply Chain Dynamics,’’ and 8 any similar efforts; 9 (B) specific actions the Commission intends 10 to take as a result of the November 2017 round- 11 table, and any similar efforts, including a de- 12 tailed description of relevant forthcoming ac- 13 tions, additional research or roundtable discus- 14 sions, consumer education efforts, or enforcement 15 actions; and 16 (C) policy or legislative recommendations 17 to— 18 (i) improve transparency and competi- 19 tion in the pharmaceutical supply chain; 20 (ii) prevent and deter anticompetitive 21 behavior in the pharmaceutical supply 22 chain; and 23 (iii) best ensure that consumers benefit 24 from any cost savings or efficiencies that 25 VerDate Sep 11 2014 21:08 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\S1227.RS S1227 pamtmann on DSKBFK8HB2PROD with BILLS 9 •S 1227 RS may result from mergers and consolida- 1 tions. 2 (b) INTERIM REPORT.—Not later than 180 days after 3 the date of enactment of this Act, the Commission shall sub- 4 mit to the appropriate committees of Congress an interim 5 report on the progress of the report required by subsection 6 (a), along with preliminary findings and conclusions based 7 on information collected to that date. 8 SEC. 4. REPORT. 9 The Commission shall submit to the appropriate com- 10 mittees of Congress a report that includes— 11 (1) the number and nature of complaints re- 12 ceived by the Commission relating to an allegation of 13 anticompetitive conduct by a manufacturer of a sole- 14 source drug; 15 (2) the ability of the Commission to bring an en- 16 forcement action against a manufacturer of a sole- 17 source drug; and 18 (3) policy or legislative recommendations to 19 strengthen enforcement actions relating to anti- 20 competitive behavior. 21 VerDate Sep 11 2014 21:08 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\S1227.RS S1227 pamtmann on DSKBFK8HB2PROD with BILLS Calendar No. 131 116TH CONGRESS 1ST SESSION S. 1227 A BILL To require the Federal Trade Commission to study the role of intermediaries in the pharmaceutical supply chain and provide Congress with appro- priate policy recommendations, and for other purposes. JUNE 28 (legislative day, JUNE 27), 2019 Reported with an amendment VerDate Sep 11 2014 21:08 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6651 Sfmt 6651 E:\BILLS\S1227.RS S1227 pamtmann on DSKBFK8HB2PROD with BILLS