Pharmacy Benefits Manager Accountability Act

I 118TH CONGRESS 1ST SESSION H. R. 2679 To amend the Public Health Service Act, the Employee Retirement Income Security Act, and the Internal Revenue Code of 1984 to increase over- sight of pharmacy benefits manager services, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 18, 2023 Ms. KUSTER (for herself, Mr. CARTER of Georgia, Ms. ESHOO, and Mr. GUTHRIE) introduced the following bill; which was referred to the Com- mittee on Energy and Commerce, and in addition to the Committees on Education and the 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 con- cerned A BILL To amend the Public Health Service Act, the Employee Re- tirement Income Security Act, and the Internal Revenue Code of 1984 to increase oversight of pharmacy benefits manager services, 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 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Pharmacy Benefits 4 Manager Accountability Act’’. 5 VerDate Sep 11 2014 23:05 Apr 24, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2679.IH H2679 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 2679 IH SEC. 2. OVERSIGHT OF PHARMACY BENEFITS MANAGER 1 SERVICES. 2 (a) PHSA.—Title XXVII of the Public Health Serv- 3 ice Act (42 U.S.C. 300gg et seq.) is amended— 4 (1) in part D (42 U.S.C. 300gg–111 et seq.), 5 by adding at the end the following new section: 6 ‘‘SEC. 2799A–11. OVERSIGHT OF PHARMACY BENEFITS MAN- 7 AGER SERVICES. 8 ‘‘(a) IN GENERAL.—For plan years beginning on or 9 after January 1, 2025, a group health plan or health in- 10 surance issuer offering group health insurance coverage 11 or an entity or subsidiary providing pharmacy benefits 12 management services on behalf of such a plan or issuer 13 shall not enter into a contract with a drug manufacturer, 14 distributor, wholesaler, subcontractor, rebate aggregator, 15 or any associated third party that limits the disclosure of 16 information to plan sponsors in such a manner that pre- 17 vents the plan or issuer, or an entity or subsidiary pro- 18 viding pharmacy benefits management services on behalf 19 of a plan or issuer, from making the reports described in 20 subsection (b). 21 ‘‘(b) REPORTS.— 22 ‘‘(1) IN GENERAL.—For plan years beginning 23 on or after January 1, 2025, not less frequently 24 than annually, a health insurance issuer offering 25 group health insurance coverage or an entity pro- 26 VerDate Sep 11 2014 23:05 Apr 24, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2679.IH H2679 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 2679 IH viding pharmacy benefits management services on 1 behalf of a group health plan or an issuer providing 2 group health insurance coverage shall submit to the 3 plan sponsor (as defined in section 3(16)(B) of the 4 Employee Retirement Income Security Act of 1974) 5 of such group health plan or health insurance cov- 6 erage a report in accordance with this subsection 7 and make such report available to the plan sponsor 8 in a machine-readable format. Each such report 9 shall include, with respect to the applicable group 10 health plan or health insurance coverage— 11 ‘‘(A) as applicable, information collected 12 from drug manufacturers by such issuer or en- 13 tity on the total amount of copayment assist- 14 ance dollars paid, or copayment cards applied, 15 that were funded by the drug manufacturer 16 with respect to the participants and bene- 17 ficiaries in such plan or coverage; 18 ‘‘(B) a list of each drug covered by such 19 plan, issuer, or entity providing pharmacy bene- 20 fits management services that was dispensed 21 during the reporting period, including, with re- 22 spect to each such drug during the reporting 23 period— 24 VerDate Sep 11 2014 23:05 Apr 24, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2679.IH H2679 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 2679 IH ‘‘(i) the brand name, chemical entity, 1 and National Drug Code; 2 ‘‘(ii) the number of participants and 3 beneficiaries for whom the drug was filled 4 during the plan year, the total number of 5 prescription fills for the drug (including 6 original prescriptions and refills), and the 7 total number of dosage units of the drug 8 dispensed across the plan year, including 9 whether the dispensing channel was by re- 10 tail, mail order, or specialty pharmacy; 11 ‘‘(iii) the wholesale acquisition cost, 12 listed as cost per days supply and cost per 13 pill, or in the case of a drug in another 14 form, per dose; 15 ‘‘(iv) the total out-of-pocket spending 16 by participants and beneficiaries on such 17 drug, including participant and beneficiary 18 spending through copayments, coinsurance, 19 and deductibles; and 20 ‘‘(v) for any drug for which gross 21 spending of the group health plan or 22 health insurance coverage exceeded 23 $10,000 during the reporting period— 24 VerDate Sep 11 2014 23:05 Apr 24, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2679.IH H2679 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 2679 IH ‘‘(I) a list of all other drugs in 1 the same therapeutic category or 2 class, including brand name drugs 3 and biological products and generic 4 drugs or biosimilar biological products 5 that are in the same therapeutic cat- 6 egory or class as such drug; and 7 ‘‘(II) the rationale for preferred 8 formulary placement of such drug in 9 that therapeutic category or class, if 10 applicable; 11 ‘‘(C) a list of each therapeutic category or 12 class of drugs that were dispensed under the 13 health plan or health insurance coverage during 14 the reporting period, and, with respect to each 15 such therapeutic category or class of drugs, 16 during the reporting period— 17 ‘‘(i) total gross spending by the plan, 18 before manufacturer rebates, fees, or other 19 manufacturer remuneration; 20 ‘‘(ii) the number of participants and 21 beneficiaries who filled a prescription for a 22 drug in that category or class; 23 ‘‘(iii) if applicable to that category or 24 class, a description of the formulary tiers 25 VerDate Sep 11 2014 23:05 Apr 24, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2679.IH H2679 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 2679 IH and utilization mechanisms (such as prior 1 authorization or step therapy) employed 2 for drugs in that category or class; 3 ‘‘(iv) the total out-of-pocket spending 4 by participants and beneficiaries, including 5 participant and beneficiary spending 6 through copayments, coinsurance, and 7 deductibles; and 8 ‘‘(v) for each therapeutic category or 9 class under which 3 or more drugs are in- 10 cluded on the formulary of such plan or 11 coverage— 12 ‘‘(I) the amount received, or ex- 13 pected to be received, from drug man- 14 ufacturers in rebates, fees, alternative 15 discounts, or other remuneration— 16 ‘‘(aa) that has been paid, or 17 is to be paid, by drug manufac- 18 turers for claims incurred during 19 the reporting period; or 20 ‘‘(bb) that is related to utili- 21 zation of drugs, in such thera- 22 peutic category or class; 23 ‘‘(II) the total net spending, after 24 deducting rebates, price concessions, 25 VerDate Sep 11 2014 23:05 Apr 24, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2679.IH H2679 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 2679 IH alternative discounts or other remu- 1 neration from drug manufacturers, by 2 the health plan or health insurance 3 coverage on that category or class of 4 drugs; and 5 ‘‘(III) the net price per course of 6 treatment or single fill, such as a 30- 7 day supply or 90-day supply, incurred 8 by the health plan or health insurance 9 coverage and its participants and 10 beneficiaries, after manufacturer re- 11 bates, fees, and other remuneration 12 for drugs dispensed within such thera- 13 peutic category or class during the re- 14 porting period; 15 ‘‘(D) total gross spending on prescription 16 drugs by the plan or coverage during the re- 17 porting period, before rebates and other manu- 18 facturer fees or remuneration; 19 ‘‘(E) total amount received, or expected to 20 be received, by the health plan or health insur- 21 ance coverage in drug manufacturer rebates, 22 fees, alternative discounts, and all other remu- 23 neration received from the manufacturer or any 24 third party, other than the plan sponsor, re- 25 VerDate Sep 11 2014 23:05 Apr 24, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2679.IH H2679 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 2679 IH lated to utilization of drug or drug spending 1 under that health plan or health insurance cov- 2 erage during the reporting period; 3 ‘‘(F) the total net spending on prescription 4 drugs by the health plan or health insurance 5 coverage during the reporting period; and 6 ‘‘(G) amounts paid directly or indirectly in 7 rebates, fees, or any other type of remuneration 8 to brokers, consultants, advisors, or any other 9 individual or firm who referred the group health 10 plan’s or health insurance issuer’s business to 11 the pharmacy benefits manager. 12 ‘‘(2) PRIVACY REQUIREMENTS.—Health insur- 13 ance issuers offering group health insurance cov- 14 erage and entities providing pharmacy benefits man- 15 agement services on behalf of a group health plan 16 shall provide information under paragraph (1) in a 17 manner consistent with the privacy, security, and 18 breach notification regulations promulgated under 19 section 264(c) of the Health Insurance Portability 20 and Accountability Act of 1996, and shall restrict 21 the use and disclosure of such information according 22 to such privacy regulations. 23 ‘‘(3) DISCLOSURE AND REDISCLOSURE.— 24 VerDate Sep 11 2014 23:05 Apr 24, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2679.IH H2679 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 2679 IH ‘‘(A) LIMITATION TO BUSINESS ASSOCI- 1 ATES.—A group health plan receiving a report 2 under paragraph (1) may disclose such informa- 3 tion only to business associates of such plan as 4 defined in section 160.103 of title 45, Code of 5 Federal Regulations (or successor regulations). 6 ‘‘(B) CLARIFICATION REGARDING PUBLIC 7 DISCLOSURE OF INFORMATION.—Nothing in 8 this section prevents a health insurance issuer 9 offering group health insurance coverage or an 10 entity providing pharmacy benefits management 11 services on behalf of a group health plan from 12 placing reasonable restrictions on the public dis- 13 closure of the information contained in a report 14 described in paragraph (1), except that such 15 issuer or entity may not restrict disclosure of 16 such report to the Department of Health and 17 Human Services, the Department of Labor, the 18 Department of the Treasury, the Comptroller 19 General of the United States, or applicable 20 State agencies. 21 ‘‘(C) LIMITED FORM OF REPORT.—The 22 Secretary shall define through rulemaking a 23 limited form of the report under paragraph (1) 24 required of plan sponsors who are drug manu- 25 VerDate Sep 11 2014 23:05 Apr 24, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2679.IH H2679 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 2679 IH facturers, drug wholesalers, or other direct par- 1 ticipants in the drug supply chain, in order to 2 prevent anti-competitive behavior. 3 ‘‘(4) REPORT TO GAO.—A health insurance 4 issuer offering group health insurance coverage or 5 an entity providing pharmacy benefits management 6 services on behalf of a group health plan shall sub- 7 mit to the Comptroller General of the United States 8 each of the first 4 reports submitted to a plan spon- 9 sor under paragraph (1) with respect to such cov- 10 erage or plan, and other such reports as requested, 11 in accordance with the privacy requirements under 12 paragraph (2), the disclosure and redisclosure stand- 13 ards under paragraph (3), the standards specified 14 pursuant to paragraph (5), and such other informa- 15 tion that the Comptroller General determines nec- 16 essary to carry out the study under section 2(d) of 17 the Pharmacy Benefits Manager Accountability Act. 18 ‘‘(5) STANDARD FORMAT.—Not later than June 19 1, 2023, the Secretary shall specify through rule- 20 making standards for health insurance issuers and 21 entities required to submit reports under paragraph 22 (4) to submit such reports in a standard format. 23 ‘‘(c) ENFORCEMENT.— 24 VerDate Sep 11 2014 23:05 Apr 24, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2679.IH H2679 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 2679 IH ‘‘(1) IN GENERAL.—The Secretary, in consulta- 1 tion with the Secretary of Labor and the Secretary 2 of the Treasury, shall enforce this section. 3 ‘‘(2) FAILURE TO PROVIDE TIMELY INFORMA- 4 TION.—A health insurance issuer or an entity pro- 5 viding pharmacy benefits management services that 6 violates subsection (a) or fails to provide information 7 required under subsection (b) shall be subject to a 8 civil monetary penalty in the amount of $10,000 for 9 each day during which such violation continues or 10 such information is not disclosed or reported. 11 ‘‘(3) FALSE INFORMATION.—A health insurance 12 issuer or entity providing pharmacy benefits man- 13 agement services that knowingly provides false infor- 14 mation under this section shall be subject to a civil 15 money penalty in an amount not to exceed $100,000 16 for each item of false information. Such civil money 17 penalty shall be in addition to other penalties as 18 may be prescribed by law. 19 ‘‘(4) PROCEDURE.—The provisions of section 20 1128A of the Social Security Act, other than sub- 21 section (a) and (b) and the first sentence of sub- 22 section (c)(1) of such section shall apply to civil 23 monetary penalties under this subsection in the 24 same manner as such provisions apply to a penalty 25 VerDate Sep 11 2014 23:05 Apr 24, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2679.IH H2679 kjohnson on DSK79L0C42PROD with BILLS 12 •HR 2679 IH or proceeding under section 1128A of the Social Se- 1 curity Act. 2 ‘‘(5) WAIVERS.—The Secretary may waive pen- 3 alties under paragraph (2), or extend the period of 4 time for compliance with a requirement of this sec- 5 tion, for an entity in violation of this section that 6 has made a good-faith effort to comply with this sec- 7 tion. 8 ‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec- 9 tion shall be construed to permit a health insurance issuer, 10 group health plan, or other entity to restrict disclosure to, 11 or otherwise limit the access of, the Department of Health 12 an [Text truncated for display. 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