I 118TH CONGRESS 1ST SESSION H. R. 2816 To amend title XI of the Social Security Act to strengthen transparency requirements with respect to pharmacy benefit managers. IN THE HOUSE OF REPRESENTATIVES APRIL 25, 2023 Mrs. HARSHBARGER (for herself, Ms. SPANBERGER, Mrs. MILLER-MEEKS, and Mr. KRISHNAMOORTHI) introduced the following bill; which was re- ferred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently de- termined 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 XI of the Social Security Act to strengthen transparency requirements with respect to pharmacy ben- efit managers. 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 Benefit 4 Manager Sunshine and Accountability Act’’. 5 VerDate Sep 11 2014 22:51 May 01, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2816.IH H2816 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 2816 IH SEC. 2. STRENGTHENING PHARMACY BENEFIT MANAGER 1 TRANSPARENCY REQUIREMENTS. 2 Section 1150A of the Social Security Act (42 U.S.C. 3 1320b–23) is amended— 4 (1) in subsection (a)— 5 (A) in paragraph (1), by striking ‘‘; or’’ 6 and inserting a semicolon; 7 (B) in paragraph (2), by striking the 8 comma at the end and inserting ‘‘; or’’; and 9 (C) by adding at the end the following new 10 paragraph: 11 ‘‘(3) a group health plan or health insurance 12 issuer offering group or individual health insurance 13 coverage (as such terms are defined in section 2791 14 of the Public Health Service Act),’’; 15 (2) by amending subsection (b) to read as fol- 16 lows: 17 ‘‘(b) INFORMATION DESCRIBED.—The information 18 described in this subsection is the following with respect 19 to services provided by a health benefits plan or PBM for 20 a contract year: 21 ‘‘(1) With respect to a contract with each entity 22 described in paragraphs (1) through (3) of sub- 23 section (a), the aggregate dollar amount of all— 24 VerDate Sep 11 2014 22:51 May 01, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2816.IH H2816 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 2816 IH ‘‘(A) rebates that a PBM or health bene- 1 fits plan received under each such contract 2 from all drug manufacturers; 3 ‘‘(B) administrative fees that a PBM or 4 health benefits plan received under each such 5 contract with from all drug manufacturers; 6 ‘‘(C) administrative fees that a PBM or 7 health benefits plan received under each con- 8 tract from each such entity; 9 ‘‘(D) rebates that a PBM or health bene- 10 fits plan received under each contract with each 11 entity from all pharmaceutical manufacturers 12 that were not passed through to such entities; 13 ‘‘(E) administrative fees that a PBM or 14 health benefits plan received under each con- 15 tract from all pharmaceutical manufacturers 16 and did not pass through to such entities; 17 ‘‘(F) total post-claim adjudication pay- 18 ments that a PBM or health benefits plan col- 19 lected from a pharmacy under each contract, 20 including any fees, reimbursements, or other 21 claw backs including generic effective rate and 22 brand effective rate contracts; and 23 ‘‘(G) any post-claim adjudication payments 24 that a PBM or health benefits plan collected 25 VerDate Sep 11 2014 22:51 May 01, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2816.IH H2816 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 2816 IH from a pharmacy under each contract, including 1 any fees, reimbursements, or other claw backs 2 including generic effective rate and brand effec- 3 tive rate contracts that were not passed through 4 to such entities. 5 ‘‘(2) The aggregate retained rebate percentage 6 under each contract (that is the value in paragraph 7 (1)(D) divided by the value in paragraph (1)(A)). 8 ‘‘(3) Across all contractual relationships for 9 each PBM whereby such PBM is managing prescrip- 10 tion drug coverage for a entity described in in para- 11 graphs (1) through (3) of subsection (a), the highest 12 retained rebate percentage and lowest retained re- 13 bate percentage for each contract under which such 14 PBM provided services.’’; 15 (3) in subsection (c)— 16 (A) in the matter preceding paragraph (1), 17 by striking ‘‘, plan, or prices charged for 18 drugs,’’ and inserting ‘‘or plan, the prices 19 charged for a specific drug or classes of drugs, 20 or the amount of any rebates provided for a 21 specific drug or classes of drugs,’’; and 22 (B) by adding at the end the following new 23 paragraph: 24 VerDate Sep 11 2014 22:51 May 01, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2816.IH H2816 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 2816 IH ‘‘(5) To carry out the reporting requirement 1 under subsection (e).’’; and 2 (4) by adding at the end the following new sub- 3 sections: 4 ‘‘(e) PUBLIC REPORTING REQUIREMENT.—Not later 5 than the first calendar quarter following the first full plan 6 year beginning on or after the date of enactment of this 7 subsection, and annually thereafter, the Secretary shall 8 publish on a public website of the Department of Health 9 and Human Services the information reported under sub- 10 section (b), in accordance with the confidentiality require- 11 ments described in subsection (c). 12 ‘‘(f) DEFINITIONS.—In this section: 13 ‘‘(1) BRAND EFFECTIVE RATE.—The term 14 ‘brand effective rate’ means the claim reimburse- 15 ment for a brand name drug, expressed as a per- 16 centage discount from the average wholesale price of 17 such drug. 18 ‘‘(2) GENERIC EFFECTIVE RATE.—The term 19 ‘generic effective rate’ means the claim reimburse- 20 ment for a generic drug, expressed as a percentage 21 discount from the average wholesale price of such 22 drug. 23 VerDate Sep 11 2014 22:51 May 01, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2816.IH H2816 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 2816 IH ‘‘(3) PHARMACY BENEFITS MANAGER.—The 1 term ‘pharmacy benefits manager’ or ‘PBM’ 2 means— 3 ‘‘(A) an entity that manages prescription 4 drug benefits on behalf of an entity described in 5 paragraphs (1) through (3) of subsection (a); 6 and 7 ‘‘(B) for purposes of this section, includes 8 any other organization that— 9 ‘‘(i) has directly or indirectly (as de- 10 termined by the Secretary in regulations), 11 an ownership interest of 5 percent or more 12 in the PBM; 13 ‘‘(ii) shares, or is otherwise a part of, 14 the same organizational structure as the 15 PBM; 16 ‘‘(iii) exercises operational, financial, 17 or managerial control over the PBM or a 18 part thereof, or provides policies or proce- 19 dures for any of the operations of the 20 PBM, or provides financial or cash man- 21 agement services to the PBM; or 22 ‘‘(iv) provides management or admin- 23 istrative services, management or clinical 24 VerDate Sep 11 2014 22:51 May 01, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2816.IH H2816 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 2816 IH consulting services, or accounting or finan- 1 cial services to the PBM. 2 ‘‘(4) ORGANIZATIONAL STRUCTURE.—The term 3 ‘organizational structure’ means, in the case of— 4 ‘‘(A) a corporation, the officers, directors, 5 and shareholders of the corporation who have 6 an ownership interest in the corporation which 7 is equal to or exceeds 5 percent; 8 ‘‘(B) a limited liability company, the mem- 9 bers and managers of the limited liability com- 10 pany; 11 ‘‘(C) a general partnership, the partners of 12 the general partnership; 13 ‘‘(D) a limited partnership, the general 14 partners and any limited partners of the limited 15 partnership who have an ownership interest in 16 the limited partnership which is equal to or ex- 17 ceeds 5 percent; 18 ‘‘(E) a trust, the trustees of the trust; or 19 ‘‘(F) any other person or entity as the Sec- 20 retary determines appropriate.’’. 21 Æ VerDate Sep 11 2014 22:51 May 01, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H2816.IH H2816 kjohnson on DSK79L0C42PROD with BILLS