What This Bill Does
This bill requires the Federal Trade Commission to study how middlemen companies work in the prescription drug supply chain and report back to Congress. The bill asks the Federal Trade Commission to look at whether these middlemen are competing fairly and to suggest changes to laws or policies to help consumers pay less for prescriptions.
##
Who It Affects
The Federal Trade Commission must conduct and complete the study. Congress receives the study findings. The bill does not explicitly state other directly affected parties.
##
Key Provisions
• The Federal Trade Commission must submit a full report within one year of the law passing that examines whether pharmacy benefit managers (companies that process prescription drug claims) charge different prices to insurance companies than they pay to pharmacies they own versus pharmacies they don't own (Sec. 3(a)(1)(A)(i)).
• The report must examine whether pharmacy benefit managers steer patients to pharmacies they own for competitive advantage and whether they use confidential pharmacy data to increase their own business advantage (Sec. 3(a)(1)(A)(ii) and (iii)).
• The report must look at how these middlemen companies are combining with each other and whether this affects fair competition in the prescription drug market (Sec. 3(a)(1)(B)).
• The Federal Trade Commission must include policy and legislative recommendations to improve transparency, prevent unfair competition, and ensure consumers benefit from any savings created by business combinations (Sec. 3(a)(2)(C)).
• The Federal Trade Commission must submit a progress report within 180 days of the law passing with early findings (Sec. 3(b)).
• The Federal Trade Commission must submit a separate report on complaints it receives about drug manufacturers who make drugs with no competitors and whether the agency can take enforcement action against them (Sec. 4).
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What Changes
If this becomes law, the Federal Trade Commission must perform a comprehensive study of middlemen companies in the prescription drug supply chain and provide Congress with written findings and recommendations. The agency must also report on enforcement actions it can take against companies that behave unfairly in the drug market.
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Important Definitions
"Commission" means the Federal Trade Commission (the government agency responsible for protecting competition and consumers).
"Appropriate committees of Congress" means the Judiciary Committee of the Senate and the Judiciary Committee of the House of Representatives.
##
II
Calendar No. 19
118TH CONGRESS
1ST SESSION
S. 113
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
JANUARY 26, 2023
Mr. GRASSLEY
(for himself, Ms. CANTWELL, Mr. BLUMENTHAL, Mr.
LANKFORD, Mrs. BLACKBURN, Mr. TUBERVILLE, Mr. TILLIS, Mrs. CAP-
ITO, Mr. BRAUN, Mr. BOOZMAN, Mr. WELCH, Mr. COONS, Ms. HIRONO,
and Mrs. FEINSTEIN) introduced the following bill; which was read twice
and referred to the Committee on the Judiciary
MARCH 1, 2023
Reported by Mr. DURBIN, 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
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•S 113 RS
SECTION 1. SHORT TITLE.
1
This Act may be cited as the ‘‘Prescription Pricing
2
for the People Act of 2023’’.
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 a higher price than
22
the reimbursement rate at which the phar-
23
macy benefit managers reimburse phar-
24
macies owned by the pharmacy benefit
25
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3
•S 113 RS
manager and pharmacies not owned by the
1
pharmacy benefit manager;
2
(ii) steer patients for competitive ad-
3
vantage to any pharmacy, including a re-
4
tail, mail-order, or any other type of phar-
5
macy, in which the pharmacy benefit man-
6
agers have an ownership interest;
7
(iii) audit or review proprietary data,
8
including acquisition costs, patient infor-
9
mation, or dispensing information, of phar-
10
macies not owned by the pharmacy benefit
11
manager and use such proprietary data to
12
increase revenue or market share for com-
13
petitive advantage; or
14
(iv) use formulary designs to increase
15
the market share of higher cost prescrip-
16
tion drugs or depress the market share of
17
lower cost prescription drugs (each net of
18
rebates and discounts);
19
(B) trends or observations on the state of
20
competition in the healthcare supply chain, par-
21
ticularly with regard to intermediaries and their
22
integration with other intermediaries, suppliers,
23
or payers of prescription drug benefits;
24
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•S 113 RS
(C) how companies and payers assess the
1
benefits, costs, and risks of contracting with
2
intermediaries, including pharmacy services ad-
3
ministrative organizations, and whether more
4
information about the roles of intermediaries
5
should be available to consumers and payers;
6
and
7
(D) whether there are any specific legal or
8
regulatory obstacles the Commission currently
9
faces in enforcing the antitrust and consumer
10
protection laws in the pharmaceutical supply
11
chain, including the pharmacy benefit manager
12
marketplace and pharmacy services administra-
13
tive organizations; and
14
(2) provides—
15
(A)
observations
or
conclusions
drawn
16
from the November 2017 roundtable entitled
17
‘‘Understanding
Competition
in
Prescription
18
Drug Markets: Entry and Supply Chain Dy-
19
namics’’ and any similar efforts;
20
(B) specific actions the Commission in-
21
tends to take as a result of the November 2017
22
roundtable, and any similar efforts, including a
23
detailed description of relevant forthcoming ac-
24
tions, additional research or roundtable discus-
25
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5
•S 113 RS
sions, consumer education efforts, or enforce-
1
ment actions; and
2
(C) policy or legislative recommendations
3
to—
4
(i) improve transparency and competi-
5
tion in the pharmaceutical supply chain;
6
(ii) prevent and deter anticompetitive
7
behavior
in
the
pharmaceutical
supply
8
chain; and
9
(iii) best ensure that consumers ben-
10
efit from any cost savings or efficiencies
11
that may result from mergers and consoli-
12
dations.
13
(b) INTERIM REPORT.—Not later than 180 days
14
after the date of enactment of this Act, the Commission
15
shall submit to the appropriate committees of Congress
16
an interim report on the progress of the report required
17
by subsection (a), along with preliminary findings and
18
conclusions based on information collected to that date.
19
SEC. 4. REPORT.
20
The Commission shall submit to the appropriate com-
21
mittees of Congress a report that includes—
22
(1) the number and nature of complaints re-
23
ceived by the Commission relating to an allegation
24
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•S 113 RS
of anticompetitive conduct by a manufacturer of a
1
sole-source drug;
2
(2) the ability of the Commission to bring an
3
enforcement action against a manufacturer of a sole-
4
source drug; and
5
(3) policy or legislative recommendations to
6
strengthen enforcement actions relating to anti-
7
competitive behavior.
8
SECTION 1. SHORT TITLE.
9
This Act may be cited as the ‘‘Prescription Pricing
10
for the People Act of 2023’’.
11
SEC. 2. DEFINITIONS.
12
In this Act:
13
(1) APPROPRIATE COMMITTEES OF CONGRESS.—
14
The term ‘‘appropriate committees of Congress’’
15
means—
16
(A) the Committee on the Judiciary of the
17
Senate; and
18
(B) the Committee on the Judiciary of the
19
House of Representatives.
20
(2)
COMMISSION.—The
term
‘‘Commission’’
21
means the Federal Trade Commission.
22
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7
•S 113 RS
SEC. 3. STUDY OF PHARMACEUTICAL SUPPLY CHAIN INTER-
1
MEDIARIES AND MERGER ACTIVITY.
2
(a) REPORT.—Not later than 1 year after the date of
3
enactment of this Act, the Commission shall submit to the
4
appropriate committees of Congress a report that—
5
(1) addresses at minimum—
6
(A) whether pharmacy benefit managers—
7
(i) charge payers a higher price than
8
the reimbursement rate at which the phar-
9
macy benefit managers reimburse phar-
10
macies owned by the pharmacy benefit
11
manager and pharmacies not owned by the
12
pharmacy benefit manager;
13
(ii) steer patients for competitive ad-
14
vantage to any pharmacy, including a re-
15
tail, mail-order, or any other type of phar-
16
macy, in which the pharmacy benefit man-
17
agers have an ownership interest;
18
(iii) audit or review proprietary data,
19
including acquisition costs, patient infor-
20
mation, or dispensing information, of phar-
21
macies not owned by the pharmacy benefit
22
manager and use such proprietary data to
23
increase revenue or market share for com-
24
petitive advantage; or
25
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8
•S 113 RS
(iv) use formulary designs to increase
1
the market share of higher cost prescription
2
drugs or depress the market share of lower
3
cost prescription drugs (each net of rebates
4
and discounts);
5
(B) trends or observations on the state of
6
competition in the healthcare supply chain, par-
7
ticularly with regard to intermediaries and their
8
integration with other intermediaries, suppliers,
9
or payers of prescription drug benefits;
10
(C) how companies and payers assess the
11
benefits, costs, and risks of contracting with
12
intermediaries, including pharmacy services ad-
13
ministrative organizations, and whether more
14
information about the roles of intermediaries
15
should be available to consumers and payers;
16
(D) whether there are any specific legal or
17
regulatory obstacles the Commission currently
18
faces in enforcing the antitrust and consumer
19
protection laws in the pharmaceutical supply
20
chain, including the pharmacy benefit manager
21
marketplace and pharmacy services administra-
22
tive organizations; and
23
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9
•S 113 RS
(E) whether there are any specific legal or
1
regulatory obstacles that contribute to the cost of
2
prescription drug prices; 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
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•S 113 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
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Calendar No. 19
118TH CONGRESS
1ST SESSION
S. 113
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.
MARCH 1, 2023
Reported with an amendment
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