Pharmacy Benefit Manager Reform Act

II Calendar No. 113 118TH CONGRESS 1ST SESSION S. 1339 To provide for increased oversight of entities that provide pharmacy benefit management services on behalf of group health plans and health insur- ance coverage. IN THE SENATE OF THE UNITED STATES APRIL 27, 2023 Mr. SANDERS (for himself, Mr. CASSIDY, Mrs. MURRAY, Mr. MARSHALL, and Mr. BRAUN) introduced the following bill; which was read twice and re- ferred to the Committee on Health, Education, Labor, and Pensions JUNE 22, 2023 Reported by Mr. SANDERS, with an amendment [Strike out all after the enacting clause and insert the part printed in italic] A BILL To provide for increased oversight of entities that provide pharmacy benefit management services on behalf of group health plans and health insurance coverage. 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 Reform Act’’. 5 VerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •S 1339 RS SEC. 2. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR- 1 MACY BENEFIT MANAGEMENT SERVICES. 2 (a) PHSA.—Title XXVII of the Public Health Serv- 3 ice Act (42 U.S.C. 300gg et seq.) is amended— 4 (1) in part D (42 U.S.C. 300gg–111 et seq.), 5 by adding at the end the following new section: 6 ‘‘SEC. 2799A–11. OVERSIGHT OF ENTITIES THAT PROVIDE 7 PHARMACY BENEFIT MANAGEMENT SERV- 8 ICES. 9 ‘‘(a) IN GENERAL.—For plan years beginning on or 10 after January 1, 2025, a group health plan or health in- 11 surance issuer offering group health insurance coverage 12 or an entity providing pharmacy benefit management serv- 13 ices on behalf of such a plan or issuer shall not enter into 14 a contract with an applicable entity that limits the disclo- 15 sure of information to plan sponsors in such a manner 16 that prevents the plan or issuer, or an entity providing 17 pharmacy benefit management services on behalf of a plan 18 or issuer, from making the reports described in subsection 19 (b). 20 ‘‘(b) REPORTS.— 21 ‘‘(1) IN GENERAL.—For plan years beginning 22 on or after January 1, 2025, not less frequently 23 than annually, an entity providing pharmacy benefit 24 management services on behalf of a covered group 25 health plan shall submit to the plan sponsor of such 26 VerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •S 1339 RS covered group health plan a report in accordance 1 with this subsection and make such report available 2 to the plan sponsor in a machine-readable format 3 and, as the Secretary, the Secretary of Labor, and 4 the Secretary of the Treasury may determine, other 5 formats. Each such report shall include, with respect 6 to the covered group health plan— 7 ‘‘(A) as applicable, information collected 8 from drug manufacturers by such issuer or en- 9 tity on the total amount of copayment assist- 10 ance dollars paid, or copayment cards applied, 11 that were funded by the drug manufacturer 12 with respect to the participants and bene- 13 ficiaries in such plan; 14 ‘‘(B) a list of each drug covered by such 15 plan or entity providing pharmacy benefit man- 16 agement services that was billed during the re- 17 porting period, including, with respect to each 18 such drug during the reporting period— 19 ‘‘(i) the brand name, generic or non- 20 proprietary name, and National Drug 21 Code; 22 ‘‘(ii) the number of participants and 23 beneficiaries for whom the drug was billed 24 during the reporting period, the total num- 25 VerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •S 1339 RS ber of prescription claims for the drug (in- 1 cluding original prescriptions and refills), 2 and the total number of dosage units of 3 the drug dispensed across the reporting pe- 4 riod; 5 ‘‘(iii) for each claim or dosage unit de- 6 scribed in clause (ii), the type of dis- 7 pensing channel used, such as retail, mail 8 order, or specialty pharmacy; 9 ‘‘(iv) the wholesale acquisition cost, 10 listed as cost per days supply, cost per dos- 11 age unit, and cost per typical course of 12 treatment (as applicable); 13 ‘‘(v) the total out-of-pocket spending 14 by participants and beneficiaries on such 15 drug after application of any benefits 16 under the plan or coverage, including par- 17 ticipant and beneficiary spending through 18 copayments, coinsurance, and deductibles, 19 but not including any amounts spent by 20 participants and beneficiaries on drugs not 21 covered under the plan or coverage or for 22 which no claim is submitted to the plan or 23 coverage; and 24 VerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •S 1339 RS ‘‘(vi) for any drug for which gross 1 spending by the plan exceeded $10,000 2 and that is one of the 50 prescription 3 drugs for which the group health plan 4 spent the most on prescription drug bene- 5 fits during the reporting period— 6 ‘‘(I) a list of all other drugs in 7 the same therapeutic class, including 8 brand name drugs and biological 9 products and generic drugs or bio- 10 similar biological products that are in 11 the same therapeutic class as such 12 drug; and 13 ‘‘(II) if applicable, the rationale 14 for preferred formulary placement of 15 such drug in that therapeutic class, 16 selected from a list of standard ra- 17 tionales established by the Secretary; 18 ‘‘(C) a list of each therapeutic class of 19 drugs that were dispensed under the health 20 plan during the reporting period, and, with re- 21 spect to each such therapeutic class of drugs, 22 during the reporting period— 23 VerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •S 1339 RS ‘‘(i) total gross spending by the plan, 1 before rebates, fees, alternative discounts, 2 or other remuneration; 3 ‘‘(ii) the number of participants and 4 beneficiaries who filled a prescription for a 5 drug in that class; 6 ‘‘(iii) if applicable to that class, a de- 7 scription of the formulary tiers and utiliza- 8 tion management mechanisms (such as 9 prior authorization or step therapy) em- 10 ployed for drugs in that class; 11 ‘‘(iv) the total out-of-pocket spending 12 by participants and beneficiaries, including 13 participant and beneficiary spending 14 through copayments, coinsurance, and 15 deductibles; and 16 ‘‘(v) for each therapeutic class under 17 which 3 or more drugs are included on the 18 formulary of such plan— 19 ‘‘(I) the amount received, or ex- 20 pected to be received, by such entity, 21 from an applicable entity, in rebates, 22 fees, alternative discounts, or other 23 remuneration that— 24 VerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •S 1339 RS ‘‘(aa) has been paid, or will 1 be paid, by such an applicable 2 entity for claims incurred during 3 the reporting period; or 4 ‘‘(bb) is related to utilization 5 of drugs or drug spending; 6 ‘‘(II) the total net spending by 7 the health plan on that class of drugs; 8 and 9 ‘‘(III) the net price per typical 10 course of treatment or 30-day supply 11 incurred by the health plan and its 12 participants and beneficiaries, after 13 rebates, fees, alternative discounts, or 14 other remuneration provided by an 15 applicable entity, for drugs dispensed 16 within such therapeutic class during 17 the reporting period; 18 ‘‘(D) total gross spending on prescription 19 drugs by the plan during the reporting period, 20 before rebates, fees, alternative discounts, or 21 other remuneration provided by an applicable 22 entity; 23 ‘‘(E) the total amount received, or ex- 24 pected to be received, by the health plan, from 25 VerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •S 1339 RS an applicable entity, in rebates, fees, alternative 1 discounts, and other remuneration received 2 from any such entities, related to utilization of 3 drug or drug spending under that health plan 4 during the reporting period; 5 ‘‘(F) the total net spending on prescription 6 drugs by the health plan during the reporting 7 period; 8 ‘‘(G) amounts paid directly or indirectly in 9 rebates, fees, or any other type of compensation 10 (as defined in section 408(b)(2)(B)(ii)(dd)(AA) 11 of the Employee Retirement Income Security 12 Act of 1974) to brokers, consultants, advisors, 13 or any other individual or firm who referred the 14 group health plan’s business to the pharmacy 15 benefit manager; and 16 ‘‘(H) a summary document that includes 17 such information described in subparagraphs 18 (A) through (G) as the Secretary determines 19 useful for plan sponsors for purposes of select- 20 ing pharmacy benefit management services, 21 such as an estimated net price to plan sponsor 22 and participant or beneficiary, a cost per claim, 23 the fee structure or reimbursement model, and 24 estimated cost per participant or beneficiary. 25 VerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •S 1339 RS ‘‘(2) SUPPLEMENTARY REPORTING FOR INTRA- 1 COMPANY PRESCRIPTION DRUG TRANSACTIONS.— 2 ‘‘(A) IN GENERAL.—A health insurance 3 issuer offering covered group health insurance 4 coverage or an entity providing pharmacy ben- 5 efit management services under a covered group 6 health plan or covered group health insurance 7 coverage shall submit, together with the report 8 under paragraph (1), a supplementary report 9 every 6 months to the plan sponsor that in- 10 cludes— 11 ‘‘(i) an explanation of any benefit de- 12 sign parameters that encourage or require 13 participants and beneficiaries in the plan 14 or coverage to fill prescriptions at mail 15 order, specialty, or retail pharmacies that 16 are wholly or partially-owned by that issuer 17 or entity providing pharmacy benefit man- 18 agement services under such plan or cov- 19 erage, including mandatory mail and spe- 20 cialty home delivery programs, retail and 21 mail auto-refill programs, and copayment 22 incentives funded by an entity providing 23 pharmacy benefit management services; 24 VerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •S 1339 RS ‘‘(ii) the percentage of total prescrip- 1 tions charged to the plan, coverage, or par- 2 ticipants and beneficiaries in the plan or 3 coverage, that were dispensed by mail 4 order, specialty, or retail pharmacies that 5 are wholly or partially-owned by the issuer 6 or entity providing pharmacy benefit man- 7 agement services; and 8 ‘‘(iii) a list of all drugs dispensed by 9 such wholly or partially-owned pharmacy 10 and charged to the plan or coverage, or 11 participants and beneficiaries of the plan 12 or coverage, during the applicable quarter, 13 and, with respect to each drug— 14 ‘‘(I) the amounts charged, per 15 dosage unit, per course of treatment, 16 per 30-day supply, and per 90-day 17 supply, with respect to participants 18 and beneficiaries in the plan or cov- 19 erage, including amounts charged to 20 the plan or coverage and amounts 21 charged to the participants and bene- 22 ficiaries; 23 ‘‘(II) the median amount charged 24 to the plan or coverage, per dosage 25 VerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •S 1339 RS unit, per course of treatment, per 30- 1 day supply, and per 90-day supply, in- 2 cluding amounts paid by the partici- 3 pants and beneficiaries, when the 4 same drug is dispensed by other phar- 5 macies that are not wholly or par- 6 tially-owned by the issuer or entity 7 and that are included in the pharmacy 8 network of that plan or coverage; 9 ‘‘(III) the interquartile range of 10 the costs, per dosage unit, per course 11 of treatment, per 30-day supply, and 12 per 90-day supply, including amounts 13 paid by the participants and bene- 14 ficiaries, when the same drug is dis- 15 pensed by other pharmacies that are 16 not wholly or partially-owned by the 17 issuer or entity and that are included 18 in the pharmacy network of that plan 19 or coverage; 20 ‘‘(IV) the lowest cost, per dosage 21 unit, per course of treatment, per 30- 22 day supply, and per 90-day supply, 23 for such drug, including amounts 24 charged to the plan or issuer and par- 25 VerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339 pbinns on DSKJLVW7X2PROD with $$_JOB 12 •S 1339 RS ticipants and beneficiaries, that is 1 available from any pharmacy included 2 in the network of the plan or cov- 3 erage; 4 ‘‘(V) the net acquisition cost per 5 dosage unit and for a 30 day-supply, 6 and the acquisition cost per typical 7 course of treatment, if the drug is 8 subject to a maximum price discount; 9 and 10 ‘‘(VI) other information with re- 11 spect to the cost of the drug, as deter- 12 mined by the Secretary, such as aver- 13 age sales price, wholesale acquisition 14 cost, and national average drug acqui- 15 sition cost per dosage unit, per typical 16 course of treatment, or per 30-day 17 supply, for such drug, including 18 amounts charged to the plan or issuer 19 and participants and beneficiaries 20 among all pharmacies included in the 21 network of the plan or coverage. 22 ‘‘(B) PLANS AND COVERAGE OFFERED BY 23 SMALL EMPLOYERS.—A health insurance issuer 24 offering covered group health insurance cov- 25 VerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339 pbinns on DSKJLVW7X2PROD with $$_JOB 13 •S 1339 RS erage that is not covered group health insur- 1 ance coverage or an entity providing pharmacy 2 benefit management services under a group 3 health plan that is not a covered group health 4 plan or under group health insurance coverage 5 that is not covered group health insurance cov- 6 erage that conducts transactions with a wholly 7 or partially-owned pharmacy shall submit, to- 8 gether with the report under paragraph (1), a 9 supplementary report every 6 months to the 10 plan sponsor that includes the information de- 11 scribed in clauses (i) and (ii) of subparagraph 12 [Text truncated for display. 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