Prescription Drug Price Transparency Act

Summary: Prescription Drug Price Transparency Act  This bill adds&nbsp;certain transparency requirements&nbsp;for pharmacy benefits managers under Medicare, Medicare Advantage, TRICARE, and the Federal Employees Health Benefits Program.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Prescription Drug Price Transparency 
Act''.

SEC. 2. PHARMACY BENEFITS MANAGER STANDARDS UNDER THE MEDICARE PROGRAM 
              FOR PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    (a) In General.--Section 1860D-12(b) of the Social Security Act (42 
U.S.C. 1395w-112(b)) is amended by adding at the end the following new 
paragraph:
            ``(7) Pharmacy benefits manager transparency 
        requirements.--Each contract entered into with a PDP sponsor 
        under this part with respect to a prescription drug plan 
        offered by such sponsor or with an MA organization offering an 
        MA-PD plan under part C shall provide that the sponsor or 
        organization, respectively, may not enter into a contract with 
        any pharmacy benefits manager (referred to in this paragraph as 
        a `PBM') to manage the prescription drug coverage provided 
        under such plan, or to control the costs of the prescription 
        drug coverage under such plan, unless the PBM adheres to the 
        following criteria when handling personally identifiable 
        utilization and claims data or other sensitive patient data:
                    ``(A) The PBM may not transmit any personally 
                identifiable utilization, protected health information, 
                or claims data, with respect to a plan enrollee, to a 
                pharmacy owned by a PBM if the plan enrollee has not 
                voluntarily elected in writing or via secure electronic 
                means to fill that particular prescription at the PBM-
                owned pharmacy.
                    ``(B) The PBM may not require that a plan enrollee 
                use a retail pharmacy, mail order pharmacy, specialty 
                pharmacy, or other pharmacy entity providing pharmacy 
                services in which the PBM has an ownership interest or 
                that has an ownership interest in the PBM, or provide 
                an incentive to a plan enrollee to encourage the 
                enrollee to use a retail pharmacy, mail order pharmacy, 
                specialty pharmacy, or other pharmacy entity providing 
                pharmacy services in which the PBM has an ownership 
                interest or that has an ownership interest in the PBM, 
                if the incentive is applicable only to such 
                pharmacies.''.
    (b) Regular Update of Prescription Drug Pricing Standard.--
Paragraph (6) of section 1860D-12(b) of the Social Security Act (42 
U.S.C. 1395w-112(b)) is amended to read as follows:
            ``(6) Regular update of prescription drug pricing 
        standard.--
                    ``(A) In general.--If the PDP sponsor of a 
                prescription drug plan (or MA organization offering an 
                MA-PD plan) uses a standard for reimbursement (as 
                described in subparagraph (B)) of pharmacies based on 
                the cost of a drug, each contract entered into with 
                such sponsor under this part (or organization under 
                part C) with respect to the plan shall provide that the 
                sponsor (or organization) shall--
                            ``(i) update such standard not less 
                        frequently than once every 7 days, beginning 
                        with an initial update on January 1 of each 
                        year, to accurately reflect the market price of 
                        acquiring the drug;
                            ``(ii) disclose to applicable pharmacies 
                        and the contracting entities of such pharmacies 
                        the sources used for making any such update 
                        immediately without requirement of request;
                            ``(iii) if the source for such a standard 
                        for reimbursement is not publicly available, 
                        disclose to the applicable pharmacies and the 
                        respective contracting entities of such 
                        pharmacies all individual drug prices to be so 
                        updated in advance of the use of such prices 
                        for the reimbursement of claims;
                            ``(iv) establish a process to appeal, 
                        investigate, and resolve disputes regarding 
                        individual drug prices that are less than the 
                        pharmacy acquisition price for such drug, which 
                        must be adjudicated within 7 days of the 
                        pharmacy filing its appeal; and
                            ``(v) provide all such pricing data in an 
                        .xml spreadsheet format or a comparable easily 
                        accessible and complete spreadsheet format.
                    ``(B) Prescription drug pricing standard defined.--
                For purposes of subparagraph (A), a standard for 
                reimbursement of a pharmacy is any methodology or 
                formula for varying the pricing of a drug or drugs 
                during the term of the pharmacy reimbursement contract 
                that is based on the cost of the drug involved, 
                including drug pricing references and amounts that are 
                based upon average wholesale price, wholesale average 
                cost, average manufacturer price, average sales price, 
                maximum allowable cost (MAC), or other costs, whether 
                publicly available or not.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning on or after January 1, 2018.

SEC. 3. REGULAR UPDATE OF PRESCRIPTION DRUG PRICING STANDARD UNDER 
              TRICARE RETAIL PHARMACY PROGRAM.

    Section 1074g(d) of title 10, United States Code, is amended by 
adding at the end the following new paragraph:
    ``(3) To the extent practicable, with respect to the TRICARE retail 
pharmacy program described in subsection (a)(2)(E)(ii), the Secretary 
shall ensure that a contract entered into with a TRICARE managed care 
support contractor includes requirements described in section 1860D-
12(b)(6) of the Social Security Act (42 U.S.C. 1395w-112(b)(6)) to 
ensure the provision of information regarding the pricing standard for 
prescription drugs.''.

SEC. 4. PRESCRIPTION DRUG TRANSPARENCY IN THE FEDERAL EMPLOYEES HEALTH 
              BENEFITS PROGRAM.

    (a) In General.--Section 8902 of title 5, United States Code, is 
amended by adding at the end the following new subsections:
    ``(p) A contract may not be made or a plan approved under this 
chapter under which a carrier has an agreement with a pharmacy benefits 
manager (in this subsection referred to as a `PBM') to manage 
prescription drug coverage or to control the costs of the prescription 
drug coverage unless the carrier and PBM adhere to the following 
criteria:
            ``(1) The PBM may not transmit any personally identifiable 
        utilization, protected health information, or claims data with 
        respect to an individual enrolled under such contract or plan 
        to a pharmacy owned by the PBM if the individual has not 
        voluntarily elected in writing or via secure electronic means 
        to fill that particular prescription at such a pharmacy.
            ``(2) The PBM may not require that an individual enrolled 
        under such contract or plan use a retail pharmacy, mail order 
        pharmacy, specialty pharmacy, or other pharmacy entity 
        providing pharmacy services in which the PBM has an ownership 
        interest or that has an ownership interest in the PBM or 
        provide an incentive to a plan enrollee to encourage the 
        enrollee to use a retail pharmacy, mail order pharmacy, 
        specialty pharmacy, or other pharmacy entity providing pharmacy 
        services in which the PBM has an ownership interest or that has 
        an ownership interest in the PBM, if the incentive is 
        applicable only to such pharmacies.
    ``(q)(1) If a contract made or plan approved under this chapter 
provides for a standard for reimbursement (as described in paragraph 
(2)) with respect to a prescription drug plan, such contract or plan 
shall provide that the applicable carrier--
            ``(A) update such standard not less frequently than once 
        every 7 days, beginning with an initial update on January 1 of 
        each year, to accurately reflect the market price of acquiring 
        the drug;
            ``(B) disclose to applicable pharmacies and the contracting 
        entities of such pharmacies the sources used for making any 
        such update immediately without requirement of request;
            ``(C) if the source for such a standard for reimbursement 
        is not publicly available, disclose to the applicable 
        pharmacies and contracting entities of such pharmacies all 
        individual drug prices to be so updated in advance of the use 
        of such prices for the reimbursement of claims;
            ``(D) establish a process to appeal, investigate, and 
        resolve disputes regarding individual drug prices that are less 
        than the pharmacy acquisition price for such drug, which must 
        be adjudicated within 7 days of the pharmacy filing its appeal; 
        and
            ``(E) provide all such pricing data in an .xml spreadsheet 
        format or a comparable easily accessible and complete 
        spreadsheet format.
    ``(2) For purposes of paragraph (1), a standard for reimbursement 
of a pharmacy is any methodology or formula for varying the pricing of 
a drug or drugs during the term of the pharmacy reimbursement contract 
that is based on the cost of the drug involved, including drug pricing 
references and amounts that are based upon average wholesale price, 
wholesale average cost, average manufacturer price, average sales 
price, maximum allowable cost, or other costs, whether publicly 
available or not.''.
    (b) Application.--The amendment made by subsection (a) shall apply 
to any contract entered into under section 8902 of title 5, United 
States Code, on or after the date of enactment of this section.