II 

Calendar No. 266 

118TH CONGRESS 

1ST SESSION S. 2973 

[Report No. 118–122] 

To amend titles XVIII and XIX of the Social Security Act to establish 

requirements relating to pharmacy benefit managers under the Medicare 

and Medicaid programs, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 28 (legislative day, SEPTEMBER 22), 2023 

Mr. WYDEN introduced the following bill; which was read twice and referred 

to the Committee on Finance 

DECEMBER 7, 2023 

Reported by Mr. WYDEN, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

A BILL 

To amend titles XVIII and XIX of the Social Security Act 

to establish requirements relating to pharmacy benefit 

managers under the Medicare and Medicaid programs, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Modernizing and Ensuring PBM Accountability Act’’. 

4 (b) TABLE OF CONTENTS.—The table of contents of 

5 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Arrangements with pharmacy benefit managers with respect to prescription drug plans and MA–PD plans. 

Sec. 3. Ensuring fair assessment of pharmacy performance and quality under 

Medicare part D. 

Sec. 4. Promoting transparency for pharmacies under Medicare part D. 

Sec. 5. Preventing the use of abusive spread pricing in Medicaid. 

Sec. 6. Ensuring accurate payments to pharmacies under Medicaid. 

Sec. 7. OIG study and report on drug price mark-ups in Medicare part D. 

Sec. 8. Resolving P&T committee conflicts of interest. 

Sec. 9. Enhancing PBM transparency requirements. 

Sec. 10. Facilitating midyear formulary changes for biosimilars. 

Sec. 11. Strengthening pharmacy access for seniors. 

Sec. 12. Beneficiary-focused listening sessions to improve prescription drug 

plan transparency, access, and choice. 

Sec. 13. Reporting on enforcement and oversight of pharmacy access requirements. 

Sec. 14. GAO study on price-related compensation across the supply chain. 

Sec. 15. Reports on inappropriate pharmacy rejections. 

Sec. 16. GAO study on drug shortages. 

Sec. 17. Report on biosimilar and generic access under Medicare part D. 

Sec. 18. Medicare Improvement Fund. 

6 SEC. 2. ARRANGEMENTS WITH PHARMACY BENEFIT MAN7 AGERS WITH RESPECT TO PRESCRIPTION 

8 DRUG PLANS AND MA–PD PLANS. 

9 (a) IN GENERAL.— 

10 (1) PRESCRIPTION DRUG PLANS.—Section 

11 1860D–12 of the Social Security Act (42 U.S.C. 

12 1395w–112) is amended by adding at the end the 

13 following new subsection: 

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1 ‘‘(h) REQUIREMENTS RELATING TO PHARMACY BEN2 EFIT MANAGERS.—For plan years beginning on or after 

3 January 1, 2026: 

4 ‘‘(1) AGREEMENTS WITH PHARMACY BENEFIT

5 MANAGERS.—Each contract entered into with a 

6 PDP sponsor under this part with respect to a pre7 scription drug plan offered by such sponsor shall 

8 provide that any pharmacy benefit manager acting 

9 on behalf of such sponsor has a written agreement 

10 with the PDP sponsor under which the pharmacy 

11 benefit manager agrees to meet the following re12 quirements: 

13 ‘‘(A) NO INCOME OTHER THAN BONA FIDE

14 SERVICE FEES.— 

15 ‘‘(i) IN GENERAL.—The pharmacy 

16 benefit manager and any affiliate of such 

17 pharmacy benefit manager shall not derive 

18 any remuneration with respect to any serv19 ices provided in connection with the utiliza20 tion of covered part D drugs from any en21 tity or individual other than bona fide serv22 ice fees, subject to clauses (ii) and (iii). 

23 ‘‘(ii) INCENTIVE PAYMENTS.—For the 

24 purposes of this subsection, an incentive 

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1 macy benefit manager that is performing 

2 services on behalf of such sponsor shall be 

3 deemed a ‘bona fide service fee’ if such 

4 payment is a flat dollar amount, is con5 sistent with fair market value, and is re6 lated to services actually performed by the 

7 pharmacy benefit manager or affiliate of 

8 such pharmacy benefit manager in connec9 tion with the utilization of covered part D 

10 drugs. 

11 ‘‘(iii) CLARIFICATION ON REBATES

12 AND DISCOUNTS USED TO LOWER COSTS

13 FOR COVERED PART D DRUGS.—Rebates, 

14 discounts, and other price concessions re15 ceived from manufacturers, even if such 

16 price concessions are calculated as a per17 centage of a drug’s price, shall not be con18 sidered a violation of the requirements of 

19 clause (i) if they are fully passed through 

20 to a PDP sponsor and exclusively used to 

21 lower costs for prescription drugs under 

22 this part, including in cases where a PDP 

23 sponsor is acting as a pharmacy benefit 

24 manager on behalf of a prescription drug 

25 plan offered by such PDP sponsor. 

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1 ‘‘(iv) EVALUATION OF REMUNERATION

2 ARRANGEMENTS.—Remuneration arrange3 ments between pharmacy benefit managers 

4 or affiliates of such pharmacy benefit man5 agers, as applicable, and other entities in6 volved in the dispensing or utilization of 

7 covered part D drugs (including PDP 

8 sponsors, manufacturers, pharmacies, and 

9 other entities as determined appropriate by 

10 the Secretary) shall be subject to review by 

11 the Secretary and the Office of the Inspec12 tor General of the Department of Health 

13 and Human Services. The Secretary, in 

14 consultation with the Office of the Inspec15 tor General, shall evaluate whether remu16 neration under such arrangements is con17 sistent with fair market value through re18 views and assessments of such remunera19 tion, as determined appropriate. 

20 ‘‘(B) TRANSPARENCY REGARDING GUARAN21 TEES AND COST PERFORMANCE EVALUA22 TIONS.—The pharmacy benefit manager shall— 

23 ‘‘(i) define, interpret, and apply, in a 

24 fully transparent and consistent manner 

25 for purposes of calculating or otherwise 

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1 evaluating pharmacy benefit manager per2 formance against pricing guarantees or 

3 similar cost performance measurements re4 lated to rebates, discounts, price conces5 sions, or net costs, terms such as— 

6 ‘‘(I) ‘generic drug’, in a manner 

7 consistent with the definition of the 

8 term under section 423.4 of title 42, 

9 Code of Federal Regulations, or a suc10 cessor regulation; 

11 ‘‘(II) ‘brand name drug’, in a 

12 manner consistent with the definition 

13 of the term under section 423.4 of 

14 title 42, Code of Federal Regulations, 

15 or a successor regulation; 

16 ‘‘(III) ‘specialty drug’; 

17 ‘‘(IV) ‘rebate’; and 

18 ‘‘(V) ‘discount’; 

19 ‘‘(ii) identify any drugs, claims, or 

20 price concessions excluded from any pric21 ing guarantee or other cost performance 

22 calculation or evaluation in a clear and 

23 consistent manner; and 

24 ‘‘(iii) where a pricing guarantee or 

25 other cost performance measure is based 

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1 on a pricing benchmark other than the 

2 wholesale acquisition cost (as defined in 

3 section 1847A(c)(6)(B)) of a drug, cal4 culate and provide a wholesale acquisition 

5 cost-based equivalent to the pricing guar6 antee or other cost performance measure 

7 in the written agreement. 

8 ‘‘(C) PROVISION OF INFORMATION.— 

9 ‘‘(i) IN GENERAL.—Not later than 

10 July 1 of each year, beginning in 2026, the 

11 pharmacy benefit manager shall submit to 

12 the PDP sponsor, and to the Secretary, a 

13 report, in accordance with this subpara14 graph, and shall make such report avail15 able to such sponsor at no cost to such 

16 sponsor in a format specified by the Sec17 retary under paragraph (4). Each such re18 port shall include, with respect to such 

19 PDP sponsor and each plan offered by 

20 such sponsor, the following information 

21 with respect to the previous plan year: 

22 ‘‘(I) A list of all drugs covered by 

23 the plan that were dispensed includ24 ing, with respect to each such drug— 

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1 ‘‘(aa) the brand name, ge2 neric or non-proprietary name, 

3 and National Drug Code; 

4 ‘‘(bb) the number of plan 

5 enrollees for whom the drug was 

6 dispensed, the total number of 

7 prescription claims for the drug 

8 (including original prescriptions 

9 and refills, counted as separate 

10 claims), and the total number of 

11 dosage units of the drug dis12 pensed; 

13 ‘‘(cc) the number of pre14 scription claims described in item 

15 (bb) by each type of dispensing 

16 channel through which the drug 

17 was dispensed, including retail, 

18 mail order, specialty pharmacy, 

19 long term care pharmacy, home 

20 infusion pharmacy, or other types 

21 of pharmacies or providers; 

22 ‘‘(dd) the average wholesale 

23 acquisition cost, listed as cost per 

24 day’s supply, cost per dosage 

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1 unit, and cost per typical course 

2 of treatment (as applicable); 

3 ‘‘(ee) the average wholesale 

4 price for the drug, listed as cost 

5 per day’s supply, cost per dosage 

6 unit, and cost per typical course 

7 of treatment (as applicable); 

8 ‘‘(ff) the total out-of-pocket 

9 spending by plan enrollees on 

10 such drug after application of 

11 any benefits under the plan, in12 cluding plan enrollee spending 

13 through copayments, coinsurance, 

14 and deductibles; 

15 ‘‘(gg) total rebates paid by 

16 the manufacturer on the drug as 

17 reported under the Detailed DIR 

18 Report (or any successor report) 

19 submitted by such sponsor to the 

20 Centers for Medicare & Medicaid 

21 Services; 

22 ‘‘(hh) all other direct or in23 direct remuneration on the drug 

24 as reported under the Detailed 

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1 port) submitted by such sponsor 

2 to the Centers for Medicare & 

3 Medicaid Services; 

4 ‘‘(ii) the average pharmacy 

5 reimbursement amount paid by 

6 the plan for the drug in the ag7 gregate and disaggregated by dis8 pensing channel identified in item 

9 (cc); 

10 ‘‘(jj) the average National 

11 Average Drug Acquisition Cost 

12 (NADAC) for retail community 

13 pharmacies; and 

14 ‘‘(kk) total manufacturer-de15 rived revenue, inclusive of bona 

16 fide service fees, retained by the 

17 pharmacy benefit manager and 

18 any affiliate of such pharmacy 

19 benefit manager attributable to 

20 the drug. 

21 ‘‘(II) In the case of a pharmacy 

22 benefit manager that has an affiliate 

23 that is a retail, mail order, or spe24 cialty pharmacy, with respect to drugs 

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1 covered by such plan that were dis2 pensed, the following information: 

3 ‘‘(aa) The percentage of 

4 total prescriptions that were dis5 pensed by pharmacies that are an 

6 affiliate of the pharmacy benefit 

7 manager for each drug. 

8 ‘‘(bb) The interquartile 

9 range of the total combined costs 

10 paid by the plan and plan enroll11 ees, per dosage unit, per course 

12 of treatment, per 30-day supply, 

13 and per 90-day supply for each 

14 drug dispensed by pharmacies 

15 that are not an affiliate of the 

16 pharmacy benefit manager and 

17 that are included in the phar18 macy network of such plan. 

19 ‘‘(cc) The interquartile 

20 range of the total combined costs 

21 paid by the plan and plan enroll22 ees, per dosage unit, per course 

23 of treatment, per 30-day supply, 

24 and per 90-day supply for each 

25 drug dispensed by pharmacies 

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1 that are an affiliate of the phar2 macy benefit manager and that 

3 are included in the pharmacy 

4 network of such plan. 

5 ‘‘(dd) The lowest total com6 bined cost paid by the plan and 

7 plan enrollees, per dosage unit, 

8 per course of treatment, per 30- 

9 day supply, and per 90-day sup10 ply, for each drug that is avail11 able from any pharmacy included 

12 in the pharmacy network of such 

13 plan. 

14 ‘‘(ee) The difference between 

15 the average acquisition cost of 

16 the affiliate, such as a pharmacy 

17 or other entity that acquires pre18 scription drugs, that initially ac19 quires the drug and the amount 

20 reported under subclause (I)(jj) 

21 for each drug. 

22 ‘‘(ff) A list of covered part 

23 D drugs subject to an agreement 

24 with a covered entity under sec25 tion 340B of the Public Health 

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1 Service Act for which the phar2 macy benefit manager or an affil3 iate of the pharmacy benefit 

4 manager had a contract or other 

5 arrangement with such a covered 

6 entity in the service area of such 

7 plan. 

8 ‘‘(III) Where a drug approved 

9 under section 505(c) of the Federal 

10 Food, Drug, and Cosmetic Act (re11 ferred to in this subclause as the ‘list12 ed drug’) is covered by the plan, the 

13 following information: 

14 ‘‘(aa) A list of currently 

15 marketed generic drugs approved 

16 under section 505(j) of the Fed17 eral Food, Drug, and Cosmetic 

18 Act pursuant to an application 

19 that references such listed drug 

20 that are not covered by the plan, 

21 are covered on the same for22 mulary tier or a formulary tier 

23 typically associated with higher 

24 cost-sharing than the listed drug, 

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1 agement that the listed drug is 

2 not subject to. 

3 ‘‘(bb) The estimated average 

4 beneficiary cost-sharing under 

5 the plan for a 30-day supply of 

6 the listed drug. 

7 ‘‘(cc) Where a generic drug 

8 listed under item (aa) is on a for9 mulary tier typically associated 

10 with higher cost-sharing than the 

11 listed drug, the estimated aver12 age cost-sharing that a bene13 ficiary would have paid for a 30- 

14 day supply of each of the generic 

15 drugs described in item (aa), had 

16 the plan provided coverage for 

17 such drugs on the same for18 mulary tier as the listed drug. 

19 ‘‘(dd) A written justification 

20 for providing more favorable cov21 erage of the listed drug than the 

22 generic drugs described in item 

23 (aa). 

24 ‘‘(ee) The number of cur25 rently marketed generic drugs 

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1 approved under section 505(j) of 

2 the Federal Food, Drug, and 

3 Cosmetic Act pursuant to an ap4 plication that references such 

5 listed drug. 

6 ‘‘(IV) Where a reference product 

7 (as defined in section 351(i) of the 

8 Public Health Service Act) is covered 

9 by the plan, the following information: 

10 ‘‘(aa) A list of currently 

11 marketed biosimilar biological 

12 products licensed under section 

13 351(k) of the Public Health 

14 Service Act pursuant to an appli15 cation that refers to such ref16 erence product that are not cov17 ered by the plan, are covered on 

18 the same formulary tier or a for19 mulary tier typically associated 

20 with higher cost-sharing than the 

21 reference product, or are subject 

22 to utilization management that 

23 the reference product is not sub24 ject to. 

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1 ‘‘(bb) The estimated average 

2 beneficiary cost-sharing under 

3 the plan for a 30-day supply of 

4 the reference product. 

5 ‘‘(cc) Where a biosimilar bi6 ological product listed under item 

7 (aa) is on a formulary tier typi8 cally associated with higher cost9 sharing than the listed drug, the 

10 estimated average cost-sharing 

11 that a beneficiary would have 

12 paid for a 30-day supply of each 

13 of the biosimilar biological prod14 ucts described in item (aa), had 

15 the plan provided coverage for 

16 such products on the same for17 mulary tier as the reference prod18 uct. 

19 ‘‘(dd) A written justification 

20 for providing more favorable cov21 erage of the reference product 

22 than the biosimilar biological 

23 product described in item (aa). 

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1 logical products licensed under 

2 section 351(k) of the Public 

3 Health Service Act, pursuant to 

4 an application that refers to such 

5 reference product. 

6 ‘‘(V) Total gross spending on 

7 covered part D drugs by the plan, not 

8 net of rebates, fees, discounts, or 

9 other direct or indirect remuneration. 

10 ‘‘(VI) The total amount retained 

11 by the pharmacy benefit manager or 

12 an affiliate of such pharmacy benefit 

13 manager in revenue related to utiliza14 tion of prescription drugs under that 

15 plan, inclusive of bona fide service 

16 fees. 

17 ‘‘(VII) The total spending on cov18 ered part D drugs net of rebates, fees, 

19 discounts, or other direct and indirect 

20 remuneration by the plan. 

21 ‘‘(VIII) An explanation of any 

22 benefit design parameters under such 

23 plan that encourage plan enrollees to 

24 fill prescriptions at pharmacies that 

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1 efit manager, such as mail and spe2 cialty home delivery programs, and re3 tail and mail auto-refill programs. 

4 ‘‘(IX) A list of all brokers, con5 sultants, advisors, and auditors that 

6 receive compensation from the phar7 macy benefit manager or an affiliate 

8 of such pharmacy benefit manager for 

9 referrals, consulting, auditing, or 

10 other services offered to PDP spon11 sors related to pharmacy benefit man12 agement services. 

13 ‘‘(X) A list of all affiliates of the 

14 pharmacy benefit manager. 

15 ‘‘(XI) A summary document sub16 mitted in a standardized template de17 veloped by the Secretary that includes 

18 such information described in sub19 clauses (I) through (X). 

20 ‘‘(ii) WRITTEN EXPLANATION OF CON21 TRACTS OR AGREEMENTS WITH DRUG

22 MANUFACTURERS.— 

23 ‘‘(I) IN GENERAL.—The phar24 macy benefit manager shall, not later 

25 than 30 days after the finalization of 

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1 any contract or agreement between 

2 such pharmacy benefit manager or an 

3 affiliate of such pharmacy benefit 

4 manager and a drug manufacturer (or 

5 subsidiary, agent, or entity affiliated 

6 with such drug manufacturer) that 

7 makes rebates, discounts, payments, 

8 or other financial incentives related to 

9 one or more prescription drugs of the 

10 manufacturer directly or indirectly 

11 contingent upon coverage, formulary 

12 placement, or utilization management 

13 conditions on any other prescription 

14 drugs, submit to the PDP sponsor a 

15 written explanation of such contract 

16 or agreement. 

17 ‘‘(II) REQUIREMENTS.—A writ18 ten explanation under subclause (I) 

19 shall— 

20 ‘‘(aa) include the manufac21 turer subject to the contract or 

22 agreement, all prescription drugs 

23 subject to the contract or agree24 ment and the manufacturers of 

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1 scription of the terms of such 

2 contract or agreement and how 

3 such terms apply to such drugs; 

4 and 

5 ‘‘(bb) be certified by the 

6 Chief Executive Officer, Chief Fi7 nancial Officer, or General Coun8 sel of such pharmacy benefit 

9 manager, affiliate of such phar10 macy benefit manager, or an in11 dividual delegated with the au12 thority to sign on behalf of one of 

13 these officers, who reports di14 rectly to the officer. 

15 ‘‘(D) AUDIT RIGHTS.— 

16 ‘‘(i) IN GENERAL.—Not less than once 

17 a year, at the request of the PDP sponsor, 

18 the pharmacy benefit manager shall allow 

19 for an audit of the pharmacy benefit man20 ager to ensure compliance with all terms 

21 and conditions under the written agree22 ment and the accuracy of information re23 ported under subparagraph (C). 

24 ‘‘(ii) AUDITOR.—The PDP sponsor 

25 shall have the right to select an auditor. 

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1 The pharmacy benefit manager shall not 

2 impose any limitations on the selection of 

3 such auditor. 

4 ‘‘(iii) PROVISION OF INFORMATION.— 

5 The pharmacy benefit manager shall make 

6 available to such auditor all records, data, 

7 contracts, and other information necessary 

8 to confirm the accuracy of information 

9 provided under subparagraph (C), subject 

10 to reasonable restrictions on how such in11 formation must be reported to prevent re12 disclosure of such information. 

13 ‘‘(iv) TIMING.—The pharmacy benefit 

14 manager must provide information under 

15 clause (iii) and other information, data, 

16 and records relevant to the audit to such 

17 auditor within 6 months of the initiation of 

18 the audit and respond to requests for addi19 tional information from such auditor with20 in 30 days after the request for additional 

21 information. 

22 ‘‘(v) INFORMATION FROM AFFILI23 ATES.—The pharmacy benefit manager 

24 shall be responsible for providing to such 

25 auditor information required to be reported 

22 

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1 under subparagraph (C) that is owned or 

2 held by an affiliate of such pharmacy ben3 efit manager. 

4 ‘‘(E) ENFORCEMENT.—The pharmacy ben5 efit manager shall— 

6 ‘‘(i) disgorge to a PDP sponsor (or, in 

7 a case where the PDP sponsor is an affil8 iate of such pharmacy benefit manager, to 

9 the Secretary) any payment, remuneration, 

10 or other amount received by the pharmacy 

11 benefit manager or an affiliate of such 

12 pharmacy benefit manager in violation of 

13 subparagraph (A) or the written agreement 

14 entered into with such sponsor under this 

15 part with respect to a prescription drug 

16 plan; 

17 ‘‘(ii) reimburse the PDP sponsor for 

18 any civil money penalty imposed on the 

19 PDP sponsor as a result of the failure of 

20 the pharmacy benefit manager to meet the 

21 requirements of this paragraph that are 

22 applicable to the pharmacy benefit man23 ager under the agreement; and 

24 ‘‘(iii) be subject to punitive remedies 

25 for breach of contract for failure to comply 

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1 with the requirements applicable under this 

2 paragraph. 

3 ‘‘(2) CERTIFICATION OF COMPLIANCE.—Each 

4 PDP sponsor shall furnish to the Secretary (in a 

5 time and manner specified by the Secretary) an an6 nual certification of compliance with this subsection, 

7 as well as such information as the Secretary deter8 mines necessary to carry out this subsection. 

9 ‘‘(3) RULE OF CONSTRUCTION.—Nothing in 

10 this subsection shall be construed as prohibiting pay11 ments related to reimbursement for ingredient costs 

12 to any entity that acquires prescription drugs, such 

13 as a pharmacy or wholesaler. 

14 ‘‘(4) STANDARD FORMATS.—Not later than 

15 June 1, 2025, the Secretary shall specify standard, 

16 machine-readable formats for pharmacy benefit 

17 managers to submit annual reports required under 

18 paragraph (1)(C)(i). 

19 ‘‘(5) CONFIDENTIALITY.— 

20 ‘‘(A) IN GENERAL.—Information disclosed 

21 by a pharmacy benefit manager or PDP spon22 sor under this subsection that is not otherwise 

23 publicly available or available for purchase shall 

24 not be disclosed by the Secretary or a PDP 

25 sponsor receiving the information, except that 

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1 the Secretary may disclose the information for 

2 the following purposes: 

3 ‘‘(i) As the Secretary determines nec4 essary to carry out this part. 

5 ‘‘(ii) To permit the Comptroller Gen6 eral to review the information provided. 

7 ‘‘(iii) To permit the Director of the 

8 Congressional Budget Office to review the 

9 information provided. 

10 ‘‘(iv) To permit the Executive Direc11 tor of the Medicare Payment Advisory 

12 Commission to review the information pro13 vided. 

14 ‘‘(v) To the Attorney General for the 

15 purposes of conducting oversight and en16 forcement under this title. 

17 ‘‘(vi) To the Inspector General of the 

18 Department of Health and Human Serv19 ices in accordance with its authorities 

20 under the Inspector General Act of 1978 

21 (section 406 of title 5, United States 

22 Code), and other applicable statutes. 

23 ‘‘(B) RESTRICTION ON USE OF INFORMA24 TION.—The Secretary, the Comptroller General, 

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1 fice, and the Executive Director of the Medicare 

2 Payment Advisory Commission shall not report 

3 on or disclose information disclosed pursuant to 

4 subparagraph (A) to the public in a manner 

5 that would identify a specific pharmacy benefit 

6 manager, affiliate, manufacturer or wholesaler, 

7 PDP sponsor, or plan, or contract prices, re8 bates, discounts, or other remuneration for spe9 cific drugs in a manner that may allow the 

10 identification of specific contracting parties. 

11 ‘‘(6) DEFINITIONS.—For purposes of this sub12 section: 

13 ‘‘(A) AFFILIATE.—The term ‘affiliate’ 

14 means any entity that is owned by, controlled 

15 by, or related under a common ownership struc16 ture with a pharmacy benefit manager or PDP 

17 sponsor, or that acts as a contractor or agent 

18 to such pharmacy benefit manager or PDP 

19 sponsor, insofar as such contractor or agent 

20 performs any of the functions described under 

21 subparagraph (C). 

22 ‘‘(B) BONA FIDE SERVICE FEE.—The term 

23 ‘bona fide service fee’ means a fee that is reflec24 tive of the fair market value for a bona fide, 

25 itemized service actually performed on behalf of 

26 

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1 an entity, that the entity would otherwise per2 form (or contract for) in the absence of the 

3 service arrangement and that are not passed on 

4 in whole or in part to a client or customer, 

5 whether or not the entity takes title to the 

6 drug. Such fee must be a flat dollar amount 

7 and shall not be directly or indirectly based on, 

8 or contingent upon— 

9 ‘‘(i) drug price, such as wholesale ac10 quisition cost or drug benchmark price 

11 (such as average wholesale price); 

12 ‘‘(ii) discounts, rebates, fees, or other 

13 direct or indirect remuneration amounts 

14 with respect to covered part D drugs dis15 pensed to enrollees in a prescription drug 

16 plan, except as permitted pursuant to 

17 paragraph (1)(A)(ii); 

18 ‘‘(iii) coverage or formulary placement 

19 decisions or the volume or value of any re20 ferrals or business generated between the 

21 parties to the arrangement; or 

22 ‘‘(iv) any other amounts or meth23 odologies prohibited by the Secretary. 

24 ‘‘(C) PHARMACY BENEFIT MANAGER.—The 

25 term ‘pharmacy benefit manager’ means any 

27 

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1 person or entity that, either directly or through 

2 an intermediary, acts as a price negotiator or 

3 group purchaser on behalf of a PDP sponsor or 

4 prescription drug plan, or manages the pre5 scription drug benefits provided by such spon6 sor or plan, including the processing and pay7 ment of claims for prescription drugs, the per8 formance of drug utilization review, the proc9 essing of drug prior authorization requests, the 

10 adjudication of appeals or grievances related to 

11 the prescription drug benefit, contracting with 

12 network pharmacies, controlling the cost of cov13 ered part D drugs, or the provision of related 

14 services. Such term includes any person or enti15 ty that carries out one or more of the activities 

16 described in the preceding sentence, irrespective 

17 of whether such person or entity calls itself a 

18 ‘pharmacy benefit manager’.’’. 

19 (2) MA–PD PLANS.—Section 1857(f)(3) of the 

20 Social Security Act (42 U.S.C. 1395w–27(f)(3)) is 

21 amended by adding at the end the following new 

22 subparagraph: 

23 ‘‘(F) REQUIREMENTS RELATING TO PHAR24 MACY BENEFIT MANAGERS.—For plan years beVerDate Sep 11 2014 00:49 Dec 08, 2023 Jkt 049200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6401 E:\BILLS\S2973.RS S2973
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1 ginning on or after January 1, 2026, section 

2 1860D–12(h).’’. 

3 (3) FUNDING.— 

4 (A) SECRETARY.—In addition to amounts 

5 otherwise available, there is appropriated to the 

6 Centers for Medicare & Medicaid Services Pro7 gram Management Account, out of any money 

8 in the Treasury not otherwise appropriated, 

9 $20,000,000 for fiscal year 2026, to remain 

10 available until expended, to carry out the 

11 amendments made by this subsection. 

12 (B) OIG.—In addition to amounts other13 wise available, there is appropriated to the In14 spector General of the Department of Health 

15 and Human Services, out of any money in the 

16 Treasury not otherwise appropriated, 

17 $5,000,000 for fiscal year 2026, to remain 

18 available until expended, to carry out the 

19 amendments made by this subsection. 

20 (b) GAO STUDY AND REPORT ON CERTAIN REPORT21 ING REQUIREMENTS.— 

22 (1) STUDY.—The Comptroller General of the 

23 United States (in this subsection referred to as the 

24 ‘‘Comptroller General’’) shall conduct a study on 

25 Federal and State reporting requirements for health 

29 

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1 plans and pharmacy benefit managers related to the 

2 transparency of prescription drug costs and prices. 

3 Such study shall include an analysis of the following: 

4 (A) Federal statutory and regulatory re5 porting requirements for health plans and phar6 macy benefit managers related to prescription 

7 drug costs and prices. 

8 (B) Selected States’ statutory and regu9 latory reporting requirements for health plans 

10 and pharmacy benefit managers related to pre11 scription drug costs and prices. 

12 (C) The extent to which the statutory and 

13 regulatory reporting requirements identified in 

14 subparagraphs (A) and (B) overlap and con15 flict. 

16 (D) The resources required by health plans 

17 and pharmacy benefit managers to comply with 

18 the reporting requirements described in sub19 paragraphs (A) and (B). 

20 (E) Other items determined appropriate by 

21 the Comptroller General. 

22 (2) REPORT.—Not later than 2 years after the 

23 date on which information is first required to be re24 ported under section 1860D–12(h)(1)(C) of the So25 cial Security Act, as added by subsection (a)(1), the 

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1 Comptroller General shall submit to Congress a re2 port containing the results of the study conducted 

3 under paragraph (1), together with recommenda4 tions for legislation and administrative actions that 

5 would streamline and reduce the burden associated 

6 with the reporting requirements for health plans and 

7 pharmacy benefit managers described in paragraph 

8 (1). 

9 (c) MEDPAC REPORTS ON AGREEMENTS WITH

10 PHARMACY BENEFIT MANAGERS WITH RESPECT TO PRE11 SCRIPTION DRUG PLANS AND MA–PD PLANS.—The 

12 Medicare Payment Advisory Commission shall submit to 

13 Congress the following reports: 

14 (1) Not later than March 31, 2027, a report re15 garding agreements with pharmacy benefit managers 

16 with respect to prescription drug plans and MA–PD 

17 plans. Such report shall include— 

18 (A) a description of trends and patterns, 

19 including relevant averages, totals, and other 

20 figures for each of the types of information sub21 mitted; 

22 (B) an analysis of any differences in agree23 ments and their effects on plan enrollee out-of24 pocket spending and average pharmacy reim25 bursement, and any other impacts; and 

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1 (C) any recommendations the Commission 

2 determines appropriate. 

3 (2) Not later than March 31, 2029, a report de4 scribing any changes with respect to the information 

5 described in paragraph (1) over time, together with 

6 any recommendations the Commission determines 

7 appropriate. 

8 SEC. 3. ENSURING FAIR ASSESSMENT OF PHARMACY PER9 FORMANCE AND QUALITY UNDER MEDICARE 

10 PART D. 

11 (a) STANDARDIZED PHARMACY PERFORMANCE

12 MEASURES.—Section 1860D–2 of the Social Security Act 

13 (42 U.S.C. 1395w–102) is amended by adding at the end 

14 the following new subsection: 

15 ‘‘(f) APPLICATION OF STANDARDIZED PHARMACY

16 PERFORMANCE MEASURES.— 

17 ‘‘(1) MEASURES.—For plan years beginning on 

18 or after January 1, 2025, a PDP sponsor offering 

19 a prescription drug plan and an MA organization of20 fering an MA–PD plan shall, for purposes of incen21 tive payments, price concessions, or any fees or 

22 other remuneration paid or charged to a pharmacy 

23 based on performance measures, only use measures 

24 that are— 

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1 ‘‘(A) established or adopted by the Sec2 retary under paragraph (2) and included on the 

3 list described in subparagraph (B) of such 

4 paragraph; and 

5 ‘‘(B) relevant to the performance of such 

6 pharmacy based on the type of pharmacy (in7 cluding retail, mail order, specialty, long term 

8 care, and home infusion or other types of phar9 macies), drugs dispensed by such pharmacy, 

10 and pharmacy services used to dispense and 

11 manage drugs by such pharmacy. 

12 ‘‘(2) STANDARDIZED PHARMACY PERFORMANCE

13 MEASURES.— 

14 ‘‘(A) MEASURES.— 

15 ‘‘(i) IN GENERAL.—Notwithstanding 

16 any other provision of law, the Secretary 

17 shall establish (or adopt pursuant to clause 

18 (iii)) standardized pharmacy performance 

19 measures that may be used by a PDP 

20 sponsor offering a prescription drug plan 

21 and an MA organization offering an MA– 

22 PD plan for the purpose of determining in23 centive payments, price concessions, or fees 

24 or other remuneration described in para25 graph (1). 

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1 ‘‘(ii) REQUIREMENTS.—The measures 

2 under clause (i) shall focus on pharmacy 

3 performance and quality of care based on 

4 the type of pharmacy, as determined by 

5 the Secretary. Such measures shall be evi6 dence-based, feasible, appropriate and rea7 sonable. 

8 ‘‘(iii) ADOPTION OF MEASURE.—In 

9 lieu of establishing some or all of the 

10 measures under this paragraph, the Sec11 retary may adopt measures that are en12 dorsed by one or more multi-stakeholder 

13 consensus organizations (such as the Phar14 macy Quality Alliance), that has participa15 tion from pharmacies (including retail and 

16 specialty pharmacies not owned or affili17 ated with a plan, pharmacy benefit man18 ager, or other pharmacy), health plans, 

19 pharmacy benefit managers, and the Cen20 ters for Medicare & Medicaid Services. Any 

21 measure adopted under this clause shall be 

22 deemed to meet the requirements under 

23 clause (ii). 

24 ‘‘(B) MAINTENANCE OF LIST.— 

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1 ‘‘(i) IN GENERAL.—The Secretary 

2 shall maintain, and publish on a publicly 

3 available internet website, a list of meas4 ures established or adopted under this 

5 paragraph. Such list shall initially be pub6 lished no later than June 1, 2024. 

7 ‘‘(ii) UPDATE.—The Secretary shall 

8 periodically evaluate measures, and how 

9 measures are applied by type of pharmacy 

10 and update the measures on the list under 

11 clause (i) so that such measures meet the 

12 requirements under subparagraph (A)(ii). 

13 ‘‘(3) NONAPPLICATION OF PAPERWORK REDUC14 TION ACT.—Chapter 35 of title 44, United States 

15 Code, shall not apply to any data collection under16 taken by the Secretary under this subsection.’’. 

17 (b) FUNDING.—In addition to amounts otherwise 

18 available, there is appropriated to the Centers for Medi19 care & Medicaid Services Program Management Account, 

20 out of any money in the Treasury not otherwise appro21 priated, $4,000,000 for fiscal year 2025, to remain avail22 able until expended, to carry out the amendment made 

23 by subsection (a). 

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1 SEC. 4. PROMOTING TRANSPARENCY FOR PHARMACIES 

2 UNDER MEDICARE PART D. 

3 (a) TRANSPARENCY FOR PHARMACIES.—Section 

4 1860D–2(f) of the Social Security Act (42 U.S.C. 1395w– 

5 102(f)), as added by section 3, is amended by adding at 

6 the end the following new paragraph: 

7 ‘‘(4) TRANSPARENCY FOR PHARMACIES.— 

8 ‘‘(A) IN GENERAL.—For plan years begin9 ning on or after January 1, 2025, a PDP spon10 sor offering a prescription drug plan and an 

11 MA organization offering an MA–PD plan, with 

12 respect to payment made by such PDP sponsor 

13 or such MA organization to a pharmacy for a 

14 covered part D drug dispensed by such phar15 macy during a plan year, shall promptly fur16 nish, upon paying a claim for a covered part D 

17 drug from a pharmacy, to such pharmacy infor18 mation related to such claim, such as the Net19 work Reimbursement ID, fees, pharmacy price 

20 concessions, discounts, incentives, or any other 

21 forms of remuneration that affect payment and 

22 pricing of the claim. 

23 ‘‘(B) STANDARDIZED FORMAT.—The PDP 

24 sponsor and the MA organization shall furnish 

25 the information described in subparagraph (A) 

26 in a standardized format (as specified by the 

36 

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1 Secretary) that includes all fields needed to 

2 price the claim for a covered part D drug dis3 pensed by such pharmacy. 

4 ‘‘(C) AVAILABILITY OF INFORMATION TO

5 THE SECRETARY.—A PDP sponsor offering a 

6 prescription drug plan or an MA organization 

7 offering an MA–PD plan shall make the infor8 mation described in subparagraph (A) available 

9 to the Secretary upon request. 

10 ‘‘(D) IMPLEMENTATION.—Notwithstanding 

11 any other provision of law, the Secretary shall 

12 implement this paragraph by program instruc13 tion or otherwise.’’. 

14 (b) FUNDING.—In addition to amounts otherwise 

15 available, there is appropriated to the Centers for Medi16 care & Medicaid Services Program Management Account, 

17 out of any money in the Treasury not otherwise appro18 priated, $2,000,000 for fiscal year 2025, to remain avail19 able until expended, to carry out the amendment made 

20 by subsection (a). 

21 SEC. 5. PREVENTING THE USE OF ABUSIVE SPREAD PRIC22 ING IN MEDICAID. 

23 (a) IN GENERAL.—Section 1927(e) of the Social Se24 curity Act (42 U.S.C. 1396r–8(e)) is amended by adding 

25 at the end the following: 

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1 ‘‘(6) TRANSPARENT PRESCRIPTION DRUG PASS2 THROUGH PRICING REQUIRED.—A contract between 

3 the State and a pharmacy benefit manager (referred 

4 to in this paragraph as a ‘PBM’), or a contract be5 tween the State and a managed care entity or other 

6 specified entity (as such terms are defined in section 

7 1903(m)(9)(D) and collectively referred to in this 

8 paragraph as the ‘entity’) that includes provisions 

9 making the entity responsible for coverage of covered 

10 outpatient drugs dispensed to individuals enrolled 

11 with the entity, shall require that payment for such 

12 drugs and related administrative services (as appli13 cable), including payments made by a PBM on be14 half of the State or entity, is based on a transparent 

15 prescription drug pass-through pricing model under 

16 which— 

17 ‘‘(A) any payment made by the entity or 

18 the PBM (as applicable) for such a drug— 

19 ‘‘(i) is limited to— 

20 ‘‘(I) ingredient cost; and 

21 ‘‘(II) a professional dispensing 

22 fee that is not less than the profes23 sional dispensing fee that the State 

24 plan or waiver would pay if the plan 

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1 or waiver was making the payment di2 rectly; 

3 ‘‘(ii) is passed through in its entirety 

4 by the entity or PBM to the pharmacy or 

5 provider that dispenses the drug (and shall 

6 not be reduced or denied retroactively 

7 under post-adjudication processes); and 

8 ‘‘(iii) is made in a manner that is con9 sistent with sections 447.502, 447.512, 

10 447.514, and 447.518 of title 42, Code of 

11 Federal Regulations (or any successor reg12 ulation) as if such requirements applied di13 rectly to the entity or the PBM, except 

14 that any payment by the entity or the 

15 PBM for the ingredient cost of such drug 

16 purchased by a covered entity (as defined 

17 in subsection (a)(5)(B)) may exceed the 

18 actual acquisition cost (as defined in 

19 447.502 of title 42, Code of Federal Regu20 lations, or any successor regulation) for 

21 such drug if— 

22 ‘‘(I) such drug was subject to an 

23 agreement under section 340B of the 

24 Public Health Service Act; 

39 

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1 ‘‘(II) such payment for the ingre2 dient cost of such drug does not ex3 ceed the maximum payment that 

4 would have been made by the entity or 

5 the PBM for the ingredient cost of 

6 such drug if such drug had not been 

7 purchased by such covered entity; and 

8 ‘‘(III) such covered entity reports 

9 to the Secretary (in a form and man10 ner specified by the Secretary), on an 

11 annual basis and with respect to pay12 ments for the ingredient costs of such 

13 drugs so purchased by such covered 

14 entity that are in excess of the actual 

15 acquisition costs for such drugs, the 

16 aggregate amount of such excess; 

17 ‘‘(B) payment to the entity or the PBM 

18 (as applicable) for administrative services per19 formed by the entity or PBM is limited to the 

20 fair market value of such services; 

21 ‘‘(C) the entity or the PBM (as applicable) 

22 shall make available to the State, and the Sec23 retary upon request, all costs and payments re24 lated to covered outpatient drugs and accom25 panying administrative services incurred, reVerDate Sep 11 2014 00:49 Dec 08, 2023 Jkt 049200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6401 E:\BILLS\S2973.RS S2973
40 

•S 2973 RS

1 ceived, or made by the entity or the PBM, in2 cluding ingredient costs, professional dispensing 

3 fees, administrative fees, post-sale and post-in4 voice fees, discounts, or related adjustments 

5 such as direct and indirect remuneration fees, 

6 and any and all other remuneration; and 

7 ‘‘(D) any form of spread pricing whereby 

8 any amount charged or claimed by the entity or 

9 the PBM (as applicable) that exceeds the 

10 amount paid to the pharmacies or providers on 

11 behalf of the State or entity, including any 

12 post-sale or post-invoice fees, discounts, or re13 lated adjustments such as direct and indirect 

14 remuneration fees or assessments (after allow15 ing for an administrative fee as described in 

16 subparagraph (B)) is not allowable for purposes 

17 of claiming Federal matching payments under 

18 this title.’’. 

19 (b) DEFINITION OF PHARMACY BENEFIT MAN20 AGER.—Section 1927(k) of the Social Security Act (42 

21 U.S.C. 1396r–8(k)) is amended by adding at the end the 

22 following new paragraph: 

23 ‘‘(12) PHARMACY BENEFIT MANAGER.—The 

24 term ‘pharmacy benefit manager’ means any person 

25 or entity that, either directly or through an interVerDate Sep 11 2014 00:49 Dec 08, 2023 Jkt 049200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6401 E:\BILLS\S2973.RS S2973
41 

•S 2973 RS

1 mediary, acts as a price negotiator or group pur2 chaser on behalf of a State, managed care entity or 

3 other specified entity (as such terms are defined in 

4 section 1903(m)(9)(D)), or manages the prescription 

5 drug benefits provided by such State, managed care 

6 entity, or other specified entity, including the proc7 essing and payment of claims for prescription drugs, 

8 the performance of drug utilization review, the proc9 essing of drug prior authorization requests, the man10 aging of appeals or grievances related to the pre11 scription drug benefits, contracting with pharmacies, 

12 controlling the cost of covered outpatient drugs, or 

13 the provision of services related thereto. Such term 

14 includes any person or entity that carries out 1 or 

15 more of the activities described in the preceding sen16 tence, irrespective of whether such person or entity 

17 calls itself a ‘pharmacy benefit manager’.’’. 

18 (c) CONFORMING AMENDMENTS.—Section 1903(m) 

19 of such Act (42 U.S.C. 1396b(m)) is amended— 

20 (1) in paragraph (2)(A)(xiii)— 

21 (A) by striking ‘‘and (III)’’ and inserting 

22 ‘‘(III)’’; 

23 (B) by inserting before the period at the 

24 end the following: ‘‘, and (IV) if the entity, or 

25 a pharmacy benefit manager acting on behalf of 

42 

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1 the entity under a contract or other arrange2 ment between the entity and the pharmacy ben3 efit manager, performs any of the activities de4 scribed in section 1927(k)(12), such activities 

5 shall comply with the requirements of section 

6 1927(e)(6)’’; and 

7 (C) by moving the left margin 2 ems to the 

8 left; and 

9 (2) by adding at the end the following new 

10 paragraph: 

11 ‘‘(10) No payment shall be made under this title to 

12 a State with respect to expenditures incurred by the State 

13 for payment for services provided by an other specified 

14 entity (as defined in paragraph (9)(D)(iii)) unless such 

15 services are provided in accordance with a contract be16 tween the State and such entity which satisfies the re17 quirements of paragraph (2)(A)(xiii).’’. 

18 (d) EFFECTIVE DATE.—The amendments made by 

19 this section apply to contracts between States and man20 aged care entities, other specified entities, or pharmacy 

21 benefit managers that have an effective date beginning on 

22 or after the date that is 18 months after the date of enact23 ment of this Act. 

43 

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1 SEC. 6. ENSURING ACCURATE PAYMENTS TO PHARMACIES 

2 UNDER MEDICAID. 

3 (a) IN GENERAL.—Section 1927(f) of the Social Se4 curity Act (42 U.S.C. 1396r–8(f)) is amended— 

5 (1) by striking ‘‘and’’ after the semicolon at the 

6 end of paragraph (1)(A)(i) and all that precedes it 

7 through ‘‘(1)’’ and inserting the following: 

8 ‘‘(1) DETERMINING PHARMACY ACTUAL ACQUI9 SITION COSTS.—The Secretary shall conduct a sur10 vey of retail community pharmacy drug prices to de11 termine the national average drug acquisition cost as 

12 follows: 

13 ‘‘(A) USE OF VENDOR.—The Secretary 

14 may contract services for— 

15 ‘‘(i) with respect to retail community 

16 pharmacies, the determination of retail 

17 survey prices of the national average drug 

18 acquisition cost for covered outpatient 

19 drugs that represent a nationwide average 

20 of consumer purchase prices for such 

21 drugs, net of all discounts and rebates (to 

22 the extent any information with respect to 

23 such discounts and rebates is available) 

24 based on a monthly survey of such phar25 macies; and’’; 

44 

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1 (2) by adding at the end of paragraph (1) the 

2 following: 

3 ‘‘(F) SURVEY REPORTING.—In order to 

4 meet the requirement of section 1902(a)(54), a 

5 State shall require that any retail community 

6 pharmacy in the State that receives any pay7 ment, reimbursement, administrative fee, dis8 count, or rebate related to the dispensing of 

9 covered outpatient drugs to individuals receiv10 ing benefits under this title, regardless of 

11 whether such payment, reimbursement, admin12 istrative fee, discount, or rebate is received 

13 from the State or a managed care entity or 

14 other specified entity (as such terms are defined 

15 in section 1903(m)(9)(D)) directly or from a 

16 pharmacy benefit manager or another entity 

17 that has a contract with the State or a man18 aged care entity or other specified entity (as so 

19 defined), shall respond to surveys of retail 

20 prices conducted under this paragraph. 

21 ‘‘(G) SURVEY INFORMATION.—Information 

22 on national drug acquisition prices obtained 

23 under this paragraph shall be made publicly 

24 available and shall include at least the fol25 lowing: 

45 

•S 2973 RS

1 ‘‘(i) The monthly response rate to the 

2 survey including a list of pharmacies not in 

3 compliance with subparagraph (F). 

4 ‘‘(ii) The sampling frame and number 

5 of pharmacies sampled monthly. 

6 ‘‘(iii) Information on price concessions 

7 to the pharmacy, including discounts, re8 bates, and other price concessions, to the 

9 extent that such information may be pub10 licly released and has been collected by the 

11 Secretary as part of the survey. 

12 ‘‘(H) PENALTIES.—The Secretary may en13 force non-compliance with this paragraph by a 

14 pharmacy through the establishment of pen15 alties or the suspension of payments under this 

16 title, in full or in part, until compliance with 

17 this paragraph has been completed.’’; 

18 (3) in paragraph (2)— 

19 (A) in subparagraph (A), by inserting ‘‘, 

20 including payment rates under Medicaid man21 aged care entities or other specified entities (as 

22 such terms are defined in section 

23 1903(m)(9)(D)),’’ after ‘‘under this title’’; and 

46 

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1 (B) in subparagraph (B), by inserting 

2 ‘‘and the basis for such dispensing fees’’ before 

3 the semicolon; and 

4 (4) in paragraph (4), by inserting ‘‘, and 

5 $5,000,000 for fiscal year 2024 and each fiscal year 

6 thereafter,’’ after ‘‘2010’’. 

7 (b) EFFECTIVE DATE.—The amendments made by 

8 this section take effect on the first day of the first quarter 

9 that begins on or after the date that is 18 months after 

10 the date of enactment of this Act. 

11 SEC. 7. OIG STUDY AND REPORT ON DRUG PRICE MARK12 UPS IN MEDICARE PART D. 

13 Section 1860D–42 of the Social Security Act (42 

14 U.S.C. 1395w–152) is amended by adding at the end the 

15 following new subsection: 

16 ‘‘(e) OIG STUDY AND REPORT ON DRUG PRICE

17 MARK-UPS UNDER THIS PART.— 

18 ‘‘(1) STUDY.—The Inspector General of the De19 partment of Health and Human Services (in this 

20 subsection referred to as the ‘Inspector General’) 

21 shall conduct a study on the impact of related party 

22 transactions within select vertically integrated enti23 ties on the negotiated price (as defined in section 

24 1860D–2(d)(1)(B)) paid by part D plan sponsors 

47 

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1 for covered part D drugs. Such study may include 

2 an analysis of the following: 

3 ‘‘(A) Acquisition costs by the affiliate with4 in such vertically integrated entities that ini5 tially acquires the prescription drug for a sam6 ple of covered part D drugs, including at least 

7 5 generic drugs, brand drugs, specialty brand 

8 drugs, and specialty generic drugs. 

9 ‘‘(B) The methodologies and negotiation 

10 processes used to calculate transfer prices or 

11 other transactions between related parties with 

12 respect to such covered part D drugs. 

13 ‘‘(C) The impact of the transactions de14 scribed in subparagraph (B) on the negotiated 

15 price, net of direct and indirect remuneration, 

16 for such covered part D drugs. 

17 ‘‘(D) The margin captured by different af18 filiates within such vertically integrated entities 

19 through the transactions described in subpara20 graph (B). 

21 ‘‘(E) An assessment of the impact of the 

22 transactions described in subparagraph (B) on 

23 costs to individuals enrolled in a prescription 

24 drug plan or an MA–PD plan and program 

25 spending on prescription drugs under this part. 

48 

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1 ‘‘(F) Other issues determined to be rel2 evant and appropriate by the Inspector General. 

3 ‘‘(2) REPORT.—Not later than 3 years after the 

4 date of enactment of this subsection, the Inspector 

5 General shall submit to the Committee on Finance 

6 of the Senate and the Committee on Energy and 

7 Commerce and the Committee on Ways and Means 

8 of the House of Representatives a report containing 

9 the results of the study conducted under paragraph 

10 (1), together with recommendations for such legisla11 tion and administrative action as the Inspector Gen12 eral determines appropriate. 

13 ‘‘(3) FUNDING.—In addition to amounts other14 wise available, there is appropriated to the Inspector 

15 General, out of any money in the Treasury not oth16 erwise appropriated, $5,200,000 for fiscal year 

17 2024, to remain available until expended, to carry 

18 out this subsection.’’. 

19 SEC. 8. RESOLVING P&T COMMITTEE CONFLICTS OF INTER20 EST. 

21 Section 1860D–4(b)(3)(A)(ii)(I) of the Social Secu22 rity Act (42 U.S.C. 1395w–104(b)(3)(A)(ii)(I)) is amend23 ed by inserting the following before the semicolon: ‘‘(and, 

24 for 2025 and each subsequent year, any pharmacy benefit 

49 

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1 manager acting under contract with such sponsor offering 

2 such plan)’’. 

3 SEC. 9. ENHANCING PBM TRANSPARENCY REQUIREMENTS. 

4 (a) IN GENERAL.—Section 1150A of the Social Secu5 rity Act (42 U.S.C. 1320b–23) is amended— 

6 (1) by striking subsection (a) and inserting the 

7 following: 

8 ‘‘(a) PROVISION OF INFORMATION.— 

9 ‘‘(1) IN GENERAL.—The following entities shall 

10 provide the information described in subsection (b) 

11 to the Secretary and, in the case of an entity de12 scribed in subparagraph (B) or an affiliate of such 

13 entity described in subparagraph (C), to the health 

14 benefits plan with which the entity is under contract, 

15 at such times, and in such form and manner, as the 

16 Secretary shall specify: 

17 ‘‘(A) A health benefits plan. 

18 ‘‘(B) Any entity that provides pharmacy 

19 benefits management services on behalf of a 

20 health benefits plan (in this section referred to 

21 as a ‘PBM’) that manages prescription drug 

22 coverage under a contract with— 

23 ‘‘(i) a PDP sponsor of a prescription 

24 drug plan or an MA organization offering 

50 

•S 2973 RS

1 an MA–PD plan under part D of title 

2 XVIII; or 

3 ‘‘(ii) a qualified health benefits plan 

4 offered through an exchange established by 

5 a State under section 1311 of the Patient 

6 Protection and Affordable Care Act. 

7 ‘‘(C) Any affiliate of an entity described in 

8 subparagraph (B) that acts as a price nego9 tiator or group purchaser on behalf of such 

10 PBM, PDP sponsor, MA organization, or quali11 fied health benefits plan. 

12 ‘‘(2) AFFILIATE DEFINED.—In this section, the 

13 term ‘affiliate’ means any entity that is owned by, 

14 controlled by, or related under a common ownership 

15 structure with a PBM (including an entity owned or 

16 controlled by the PDP sponsor of a prescription 

17 drug plan, MA organization offering an MA–PD 

18 plan, or qualified health benefits plan for which such 

19 entity is acting as a price negotiator or group pur20 chaser).’’; 

21 (2) in subsection (b)— 

22 (A) in paragraph (2), by inserting ‘‘and 

23 percentage’’ after ‘‘and the aggregate amount’’; 

24 and 

51 

•S 2973 RS

1 (B) by adding at the end the following new 

2 paragraph: 

3 ‘‘(4) The amount (in the aggregate and 

4 disaggregated by type) of all fees the PBM or an af5 filiate of the PBM receives from all pharmaceutical 

6 manufacturers in connection with patient utilization 

7 under the plan, and the amount and percentage (in 

8 the aggregate and disaggregated by type) of such 

9 fees that are passed through to the plan sponsor or 

10 issuer.’’; and 

11 (3) by adding at the end the following new sub12 section: 

13 ‘‘(e) ANNUAL REPORT.—The Secretary shall make 

14 publicly available on the internet website of the Centers 

15 for Medicare & Medicaid Services an annual report that 

16 summarizes the trends observed with respect to data re17 ported under subsection (b).’’. 

18 (b) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to plan or contract years beginning 

20 on or after January 1, 2027. 

21 (c) IMPLEMENTATION.—Notwithstanding any other 

22 provision of law, the Secretary may implement the amend23 ments made by this section by program instruction or oth24 erwise. 

52 

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1 (d) NON-APPLICATION OF THE PAPERWORK REDUC2 TION ACT.—Chapter 35 of title 44, United States Code 

3 (commonly referred to as the ‘‘Paperwork Reduction Act 

4 of 1995’’), shall not apply to the implementation of the 

5 amendments made by this section. 

6 SEC. 10. FACILITATING MIDYEAR FORMULARY CHANGES 

7 FOR BIOSIMILARS. 

8 (a) IN GENERAL.—Section 1860D–4(b) of the Social 

9 Security Act (42 U.S.C. 1395w–104(b)) is amended by 

10 adding at the end the following new paragraph: 

11 ‘‘(5) MID-YEAR CHANGES IN FORMULARIES

12 PERMITTED FOR CERTAIN BIOSIMILAR BIOLOGICAL

13 PRODUCTS AND THE REFERENCE PRODUCT OF SUCH

14 BIOSIMILARS.—If a PDP sponsor of a prescription 

15 drug plan uses a formulary (including the use of 

16 tiered cost-sharing), the following shall apply: 

17 ‘‘(A) IN GENERAL.—For plan year 2025, 

18 and subsequent plan years, in the case of a cov19 ered part D drug that is the reference biological 

20 product (as defined in section 351(i) of the 

21 Public Health Service Act) with respect to a 

22 biosimilar biological product (defined as a bio23 logical product licensed under section 351(k) of 

24 such Act), the PDP sponsor may, with respect 

25 to a formulary, at any time after the first 60 

53 

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1 days of the plan year, subject to paragraph 

2 (3)(E), change the preferred or tiered cost-shar3 ing status of such reference biological product 

4 if such PDP sponsor adds, before or at the 

5 same time, to such formulary such biosimilar 

6 biological product at the same or a higher pre7 ferred status, or to the same or lower cost-shar8 ing tier, as that of such reference biological 

9 product immediately prior to such change. 

10 ‘‘(B) REQUEST FOR APPROVAL OF

11 CHANGE.—Prior to making a change described 

12 in subparagraph (A), the PDP sponsor shall 

13 submit to the Secretary a request to make such 

14 change. If the Secretary approves the request 

15 or has not provided a decision to the PDP 

16 sponsor regarding such request within 30 days 

17 of receiving such request, such PDP sponsor 

18 may make such change.’’. 

19 (b) ADMINISTRATION.— 

20 (1) IMPLEMENTATION.—Notwithstanding any 

21 other provision of law, the Secretary of Health and 

22 Human Services may implement the amendment 

23 made by subsection (a) by program instruction or 

24 otherwise. 

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1 (2) NON-APPLICATION OF THE PAPERWORK RE2 DUCTION ACT.—Chapter 35 of title 44, United 

3 States Code (commonly referred to as the ‘‘Paper4 work Reduction Act of 1995’’), shall not apply to the 

5 implementation of the amendment made by sub6 section (a). 

7 SEC. 11. STRENGTHENING PHARMACY ACCESS FOR SEN8 IORS. 

9 Section 1860D–4(b)(1) of the Social Security Act (42 

10 U.S.C. 1395w–104(b)(1)) is amended by adding at the 

11 end the following new subparagraph: 

12 ‘‘(F) LIMITED ACCESS DRUGS.— 

13 ‘‘(i) LIMITATION ON RESTRICTIONS OR

14 LIMITS ON ACCESS.—For each plan year 

15 (beginning with plan year 2026), a PDP 

16 sponsor offering a prescription drug plan— 

17 ‘‘(I) may not restrict or limit ac18 cess to any covered part D drug to a 

19 subset of their network pharmacies, 

20 other than with respect to a limited 

21 access drug, as defined in clause (v); 

22 and 

23 ‘‘(II) shall document the ration24 ale for why a covered part D drug 

25 meets the definition of a limited acVerDate Sep 11 2014 00:49 Dec 08, 2023 Jkt 049200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6401 E:\BILLS\S2973.RS S2973
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1 cess drug under clause (v), if such 

2 plan restricts or limits access to a lim3 ited access drug to a subset of net4 work pharmacies. 

5 ‘‘(ii) ANNUAL SUBMISSION OF INFOR6 MATION TO THE SECRETARY ON LIMITED

7 ACCESS DRUGS.—For each plan year (be8 ginning with plan year 2026), each PDP 

9 sponsor offering a prescription drug plan 

10 shall submit to the Secretary, at a time 

11 and in a manner specified by the Sec12 retary, with respect to each prescription 

13 drug plan offered by the sponsor during 

14 such plan year— 

15 ‘‘(I) a list of all covered part D 

16 drugs that the PDP sponsor des17 ignated as a limited access drug; 

18 ‘‘(II) for each covered part D 

19 drug included in the list described in 

20 subclause (I), a written rationale for 

21 why such drug meets the definition of 

22 a limited access drug; 

23 ‘‘(III) a summary of the require24 ments imposed on network pharmacies 

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1 ments, if any) to ensure appropriate 

2 handling and dispensing of each cov3 ered part D drug included in the list 

4 described in subclause (I); 

5 ‘‘(IV) the percentages of each 

6 covered part D drug included in the 

7 list described in subclause (I) that is 

8 dispensed through retail pharmacies, 

9 specialty pharmacies, mail order phar10 macies, or other dispensing channels 

11 as defined by the PDP sponsor, re12 spectively; 

13 ‘‘(V) the annual percentage of 

14 each covered part D drug included in 

15 the list described in subclause (I) that 

16 is dispensed through a pharmacy that 

17 is affiliated with the plan or is an af18 filiate (as defined in section 1860D– 

19 12(h)(4)(A)) of a pharmacy benefit 

20 manager acting on behalf of such 

21 sponsor or such plan; and 

22 ‘‘(VI) any other information de23 termined appropriate by the Sec24 retary. 

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1 ‘‘(iii) PHARMACY ACCESS TO LIMITED

2 ACCESS DRUG INFORMATION.—For plan 

3 years beginning with plan year 2026, upon 

4 the request of a network pharmacy, a PDP 

5 sponsor of a prescription drug plan shall 

6 provide such pharmacy, not later than 14 

7 days after receiving such request, with the 

8 information described in subclauses (I), 

9 (II), and (III) of clause (ii). 

10 ‘‘(iv) HHS ANNUAL REPORT ON LIM11 ITED ACCESS DRUGS.—Not later than De12 cember 31, 2028, and annually thereafter, 

13 the Secretary shall submit to the Com14 mittee on Finance of the Senate, and the 

15 Committee on Ways and Means and the 

16 Committee on Energy and Commerce of 

17 the House of Representatives a report on 

18 compliance by PDP sponsors with the re19 quirements under this subparagraph. Each 

20 such report shall include— 

21 ‘‘(I) a description of the patterns, 

22 trends, variations, and rationales for 

23 the designation by PDP sponsors of 

24 certain covered part D drugs as lim25 ited access drugs, and the implications 

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1 of such designations on beneficiary ac2 cess to such covered part D drugs; 

3 ‘‘(II) a description of the infor4 mation submitted to the Secretary 

5 under clause (ii) (in a manner that 

6 does not disclose the identity of a 

7 pharmacy, a PDP sponsor, a prescrip8 tion drug plan, or pharmacy benefit 

9 manager, or any proprietary pricing 

10 information); and 

11 ‘‘(III) any other information de12 termined appropriate by the Sec13 retary. 

14 ‘‘(v) LIMITED ACCESS DRUG DE15 FINED.—In this subparagraph, the term 

16 ‘limited access drug’ means a covered part 

17 D drug that meets at least one of the fol18 lowing: 

19 ‘‘(I) The Food and Drug Admin20 istration has restricted distribution of 

21 such covered part D drug to certain 

22 facilities or physicians. 

23 ‘‘(II) The dispensing of such cov24 ered part D drug requires extraor25 dinary special handling, provider coVerDate Sep 11 2014 00:49 Dec 08, 2023 Jkt 049200 PO 00000 Frm 00058 Fmt 6652 Sfmt 6401 E:\BILLS\S2973.RS S2973
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1 ordination, or patient education that 

2 cannot be met by a network phar3 macy.’’. 

4 ‘‘(vii) IMPLEMENTATION.—Notwith5 standing any other provision of law, the 

6 Secretary shall implement this subpara7 graph by program instruction or otherwise. 

8 ‘‘(viii) NONAPPLICATION OF PAPER9 WORK REDUCTION ACT.—Chapter 35 of 

10 title 44, United States Code, shall not 

11 apply to any data collection undertaken by 

12 the Secretary under this subparagraph.’’. 

13 SEC. 12. BENEFICIARY-FOCUSED LISTENING SESSIONS TO 

14 IMPROVE PRESCRIPTION DRUG PLAN TRANS15 PARENCY, ACCESS, AND CHOICE. 

16 Section 1860D–42 of the Social Security Act (42 

17 U.S.C. 1395w–152), as amended by section 7, is amended 

18 by adding at the end the following new subsection: 

19 ‘‘(f) BENEFICIARY-FOCUSED LISTENING SESSIONS

20 TO IMPROVE PRESCRIPTION DRUG PLAN TRANS21 PARENCY, ACCESS, AND CHOICE.— 

22 ‘‘(1) IN GENERAL.—Not later than December 

23 31, 2024, the Secretary shall hold at least one bene24 ficiary-focused listening session to receive input on 

25 potential improvements to the experience with, and 

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1 transparency of, prescription drug plans under this 

2 part, as described in paragraph (2). 

3 ‘‘(2) BENEFICIARY-FOCUSED LISTENING SES4 SIONS.—Any beneficiary-focused listening session 

5 held under paragraph (1) shall be open to the public, 

6 including beneficiaries, caregivers of beneficiaries, 

7 consumer and patient advocacy organizations, health 

8 care providers, and other interested parties. Any 

9 such listening sessions may include an opportunity 

10 for the public to provide input to the Secretary on 

11 potential improvements to— 

12 ‘‘(A) the information made available by 

13 prescription drug plans to individuals; 

14 ‘‘(B) tools and mechanisms to assist enroll15 ees of prescription drug plans in navigating 

16 plan complaint systems, as well as the efficiency 

17 and effectiveness of such systems; 

18 ‘‘(C) tools and mechanisms to assist bene19 ficiaries in selecting a prescription drug plan; 

20 ‘‘(D) tools and mechanisms to assist en21 rollees of prescription drug plans in navigating 

22 utilization management requirements of such 

23 plans, such as step therapy and prior authoriza24 tion; 

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1 ‘‘(E) access to, and effectiveness and utili2 zation of, electronic real-time benefit tools (as 

3 described in section 423.160(b)(7) of title 42, 

4 Code of Federal Regulations, or any successor 

5 regulation) and beneficiary real-time benefit 

6 tools (as described in section 423.128(d)(4) of 

7 title 42, Code of Federal Regulations, or any 

8 successor regulation); 

9 ‘‘(F) formulary management and oversight 

10 by prescription drug plans; and 

11 ‘‘(G) other subjects, as determined appro12 priate by the Secretary.’’. 

13 SEC. 13. REPORTING ON ENFORCEMENT AND OVERSIGHT 

14 OF PHARMACY ACCESS REQUIREMENTS. 

15 Section 1860D–42 of the Social Security Act (42 

16 U.S.C. 1395w–152), as amended by section 12, is amend17 ed by adding at the end the following new subsection: 

18 ‘‘(g) BIENNIAL REPORT ON ENFORCEMENT AND

19 OVERSIGHT OF PHARMACY ACCESS REQUIREMENTS.— 

20 ‘‘(1) IN GENERAL.—Not later than 2 years 

21 after the date of enactment of this subsection, and 

22 at least once every 2 years thereafter, the Secretary 

23 shall publish a report on enforcement and oversight 

24 actions and activities undertaken by the Secretary 

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1 with respect to the requirements under section 

2 1860D–4(b)(1). 

3 ‘‘(2) LIMITATION.—A report under paragraph 

4 (1) shall not disclose— 

5 ‘‘(A) identifiable information about individ6 uals or entities unless such information is oth7 erwise publicly available; or 

8 ‘‘(B) trade secrets with respect to any enti9 ties.’’. 

10 SEC. 14. GAO STUDY ON PRICE-RELATED COMPENSATION 

11 ACROSS THE SUPPLY CHAIN. 

12 Section 1860D–42 of the Social Security Act (42 

13 U.S.C. 1395w–152), as amended by section 13, is amend14 ed by adding at the end the following new subsection: 

15 ‘‘(h) GAO STUDY AND REPORT ON PRICE-RELATED

16 COMPENSATION AND PAYMENT STRUCTURES IN THE

17 PRESCRIPTION DRUG SUPPLY CHAIN.— 

18 ‘‘(1) STUDY.—The Comptroller General of the 

19 United States (in this subsection referred to as the 

20 ‘Comptroller General’) shall conduct a study describ21 ing the use of compensation and payment structures 

22 related to a prescription drug’s price within the re23 tail prescription drug supply chain in this part. Such 

24 study shall summarize information from Federal 

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1 agencies and industry experts, to the extent avail2 able, with respect to the following: 

3 ‘‘(A) The type, magnitude, other features 

4 (such as the pricing benchmarks used), and 

5 prevalence of compensation and payment struc6 tures related to a prescription drug’s price, 

7 such as calculating fee amounts as a percentage 

8 of a prescription drug’s price, between inter9 mediaries in the prescription drug supply chain, 

10 including— 

11 ‘‘(i) pharmacy benefit managers; 

12 ‘‘(ii) part D plan sponsors; 

13 ‘‘(iii) drug wholesalers; 

14 ‘‘(iv) pharmacies; 

15 ‘‘(v) manufacturers; 

16 ‘‘(vi) pharmacy services administrative 

17 organizations; 

18 ‘‘(vii) brokers, auditors, consultants, 

19 and other entities that advise part D plan 

20 sponsors about pharmacy benefits or re21 view part D plan sponsor contracts with 

22 pharmacy benefit managers; and 

23 ‘‘(viii) other service providers that 

24 contract with any of the entities described 

25 in clauses (i) through (vii) that may use 

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1 price-related compensation and payment 

2 structures, such as rebate aggregators (or 

3 other entities that negotiate or process 

4 price concessions on behalf of pharmacy 

5 benefit managers, plan sponsors, or phar6 macies). 

7 ‘‘(B) The primary business models and 

8 compensation structures for each category of 

9 intermediary described in subparagraph (A). 

10 ‘‘(C) Variation in price-related compensa11 tion structures between affiliated entities (such 

12 as entities with common ownership, either full 

13 or partial, and subsidiary relationships) and un14 affiliated entities. 

15 ‘‘(D) Potential conflicts of interest among 

16 contracting entities related to the use of pre17 scription drug price-related compensation struc18 tures, such as the potential for fees or other 

19 payments set as a percentage of a prescription 

20 drug’s price to advantage formulary selection, 

21 distribution, or purchasing of prescription drugs 

22 with higher prices. 

23 ‘‘(E) Notable differences, if any, in the use 

24 and level of price-based compensation struc25 tures over time and between different market 

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1 segments, such as under this part and the Med2 icaid program under title XIX. 

3 ‘‘(F) The effects of drug price-related com4 pensation structures and alternative compensa5 tion structures on Federal health care programs 

6 and program beneficiaries, including with re7 spect to cost-sharing, premiums, Federal out8 lays, biosimilar and generic drug adoption and 

9 utilization, drug shortage risks, and the poten10 tial for fees set as a percentage of a drug’s 

11 price to advantage the formulary selection, dis12 tribution, or purchasing of drugs with higher 

13 prices. 

14 ‘‘(G) Other issues determined to be rel15 evant and appropriate by the Comptroller Gen16 eral. 

17 ‘‘(2) REPORT.—Not later than 2 years after the 

18 date of enactment of this subsection, the Comp19 troller General shall submit to Congress a report 

20 containing the results of the study conducted under 

21 paragraph (1), together with recommendations for 

22 such legislation and administrative action as the 

23 Comptroller General determines appropriate.’’. 

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1 SEC. 15. REPORTS ON INAPPROPRIATE PHARMACY REJEC2 TIONS. 

3 Section 1860D–42 of the Social Security Act (42 

4 U.S.C. 1395w–152), as amended by section 14, is amend5 ed by adding at the end the following new subsection: 

6 ‘‘(i) BIENNIAL REPORT ON EFFORTS TO ADDRESS

7 INAPPROPRIATE PHARMACY REJECTIONS AND INAPPRO8 PRIATE COVERAGE DENIALS UNDER MEDICARE PART

9 D.— 

10 ‘‘(1) IN GENERAL.—Not later than January 1, 

11 2026, and at least once every 4 years thereafter, the 

12 Secretary, in consultation with the Office of the In13 spector General of the Department of Health and 

14 Human Services, shall post, on a publicly available 

15 website, a report related to preventing, identifying, 

16 or addressing inappropriate pharmacy rejections (as 

17 defined in paragraph (2)(B)) and inappropriate cov18 erage denials (as defined in paragraph (2)(A)) under 

19 this part. Such reports shall include— 

20 ‘‘(A) a description of programs, reviews, or 

21 initiatives underway to prevent, identify, or ad22 dress such rejections and denials, in accordance 

23 with existing authorities; 

24 ‘‘(B) a summary of data collected or other 

25 information available with respect to such rejec26 tions and denials, including— 

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1 ‘‘(i) standards (if any such standards 

2 have been adopted) used by the Secretary 

3 for identifying PDP sponsors and MA or4 ganizations with relatively high rates of 

5 such rejections or denials; and 

6 ‘‘(ii) notable longitudinal trends or 

7 other patterns, as determined appropriate 

8 by the Secretary; 

9 ‘‘(C) an overview of corrective actions 

10 taken and technical assistance provided by the 

11 Secretary in response to violations of existing 

12 requirements with respect to such rejections 

13 and denials; and 

14 ‘‘(D) a description of barriers, if any, pre15 venting the Secretary from taking administra16 tive actions sufficient to identify and address 

17 such rejections and denials. 

18 ‘‘(2) DEFINITIONS.—For purposes of this sub19 section: 

20 ‘‘(A) INAPPROPRIATE COVERAGE DE21 NIAL.—The term ‘inappropriate coverage de22 nial’ means a denial of coverage of a covered 

23 part D drug claim that violates the require24 ments of this part. 

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1 ‘‘(B) INAPPROPRIATE PHARMACY REJEC2 TIONS.—The term ‘inappropriate pharmacy re3 jection’ means a rejection of a covered part D 

4 drug claim that violates the requirements of 

5 this part, such as through the application of 

6 utilization management requirements that the 

7 Secretary has not approved.’’. 

8 SEC. 16. GAO STUDY ON DRUG SHORTAGES. 

9 Section 1860D–42 of the Social Security Act (42 

10 U.S.C. 1395w–152), as amended by section 15, is amend11 ed by adding at the end the following new subsection: 

12 ‘‘(j) GAO STUDY AND REPORT ON DRUG SHORT13 AGES.— 

14 ‘‘(1) STUDY.—The Comptroller General of the 

15 United States (in this subsection referred to as the 

16 ‘Comptroller General’) shall conduct a study on fac17 tors contributing to shortages of covered part D 

18 drugs across the outpatient prescription drug supply 

19 chain. Such study shall include analysis of— 

20 ‘‘(A) common features of and trends in 

21 covered part D drugs that have experienced at 

22 least 1 shortage (as defined under section 506C 

23 of the Federal Food, Drug, and Cosmetic Act); 

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1 ‘‘(B) patterns, trends, and variations in 

2 the duration of shortages experienced by cov3 ered part D drugs; 

4 ‘‘(C) patterns, trends, and variations in the 

5 proximate causes and other potential causes of 

6 shortages experienced by covered part D drugs; 

7 ‘‘(D) effects of such shortages on bene8 ficiaries enrolled in prescription drug plans 

9 under this part, including with respect to access 

10 to covered part D drugs and out-of-pocket 

11 costs; and 

12 ‘‘(E) other issues determined appropriate 

13 by the Comptroller General. 

14 ‘‘(2) REPORT.—Not later than 2 years after the 

15 date of enactment of this subsection, the Comp16 troller General shall submit to Congress a report 

17 containing the results of the study conducted under 

18 paragraph (1), together with recommendations for 

19 such legislation and administrative action as the 

20 Comptroller General determines appropriate.’’. 

21 SEC. 17. REPORT ON BIOSIMILAR AND GENERIC ACCESS 

22 UNDER MEDICARE PART D. 

23 Section 1860D–42 of the Social Security Act (42 

24 U.S.C. 1395w–152), as amended by section 16, is amend25 ed by adding at the end the following new subsection: 

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1 ‘‘(k) OIG REPORT ON BIOSIMILAR AND GENERIC AC2 CESS UNDER PART D.— 

3 ‘‘(1) STUDY.—The Office of the Inspector Gen4 eral of the Department of Health and Human Serv5 ices (referred to in this subsection as the ‘Office of 

6 the Inspector General’) shall conduct a study on bio7 similar and generic drug access and adoption under 

8 prescription drug plans offered under this part, in9 cluding with respect to barriers to increased adop10 tion and utilization of lower-priced biosimilar and 

11 generic utilization, plan features that discourage or 

12 encourage the utilization of these products, and the 

13 gross and net spending effects of policies that in14 creased adoption of these products under this part. 

15 ‘‘(2) REPORT.—Not later than 1 year after the 

16 date of enactment of this subsection, the Office of 

17 the Inspector General shall publish a report on the 

18 study conducted under paragraph (1).’’. 

19 SEC. 18. MEDICARE IMPROVEMENT FUND. 

20 Section 1898(b)(1) of the Social Security Act (42 

21 U.S.C. 1395iii(b)(1)) is amended by striking ‘‘during and 

22 after fiscal year 2022, $180,000,000’’ and inserting the 

23 following: ‘‘during and after— 

24 ‘‘(A) fiscal year 2022, $180,000,000; and 

25 ‘‘(B) fiscal year 2028, $1,947,000,000’’. 

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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Modernizing and Ensuring PBM Accountability Act’’. 

4 (b) TABLE OF CONTENTS.—The table of contents of this 

5 Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Arrangements with pharmacy benefit managers with respect to prescription drug plans and MA–PD plans. 

Sec. 3. Ensuring fair assessment of pharmacy performance and quality under 

Medicare part D. 

Sec. 4. Promoting transparency for pharmacies under Medicare part D. 

Sec. 5. Preventing the use of abusive spread pricing in Medicaid. 

Sec. 6. Ensuring accurate payments to pharmacies under Medicaid. 

Sec. 7. OIG study and report on drug price mark-ups in Medicare part D. 

Sec. 8. Resolving P&T committee conflicts of interest. 

Sec. 9. Enhancing PBM transparency requirements. 

Sec. 10. Facilitating midyear formulary changes for biosimilars. 

Sec. 11. Strengthening pharmacy access for seniors. 

Sec. 12. Beneficiary-focused listening sessions to improve prescription drug plan 

transparency, access, and choice. 

Sec. 13. Reporting on enforcement and oversight of pharmacy access requirements. 

Sec. 14. GAO study on price-related compensation across the supply chain. 

Sec. 15. Reports on inappropriate pharmacy rejections. 

Sec. 16. GAO study on drug shortages. 

Sec. 17. Report on biosimilar and generic access under Medicare part D. 

Sec. 18. Medicare Improvement Fund. 

6 SEC. 2. ARRANGEMENTS WITH PHARMACY BENEFIT MAN7 AGERS WITH RESPECT TO PRESCRIPTION 

8 DRUG PLANS AND MA–PD PLANS. 

9 (a) IN GENERAL.— 

10 (1) PRESCRIPTION DRUG PLANS.—Section 

11 1860D–12 of the Social Security Act (42 U.S.C. 

12 1395w–112) is amended by adding at the end the fol13 lowing new subsection: 

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1 ‘‘(h) REQUIREMENTS RELATING TO PHARMACY BEN2 EFIT MANAGERS.—For plan years beginning on or after 

3 January 1, 2026: 

4 ‘‘(1) AGREEMENTS WITH PHARMACY BENEFIT

5 MANAGERS.—Each contract entered into with a PDP 

6 sponsor under this part with respect to a prescription 

7 drug plan offered by such sponsor shall provide that 

8 any pharmacy benefit manager acting on behalf of 

9 such sponsor has a written agreement with the PDP 

10 sponsor under which the pharmacy benefit manager 

11 agrees to meet the following requirements: 

12 ‘‘(A) NO INCOME OTHER THAN BONA FIDE

13 SERVICE FEES.— 

14 ‘‘(i) IN GENERAL.—The pharmacy ben15 efit manager and any affiliate of such phar16 macy benefit manager shall not derive any 

17 remuneration with respect to any services 

18 provided in connection with the utilization 

19 of covered part D drugs from any entity or 

20 individual other than bona fide service fees, 

21 subject to clauses (ii) and (iii). 

22 ‘‘(ii) INCENTIVE PAYMENTS.—For the 

23 purposes of this subsection, an incentive 

24 payment paid by a PDP sponsor to a phar25 macy benefit manager that is performing 

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1 services on behalf of such sponsor shall be 

2 deemed a ‘bona fide service fee’ if such pay3 ment is a flat dollar amount, is consistent 

4 with fair market value, and is related to 

5 services actually performed by the phar6 macy benefit manager or affiliate of such 

7 pharmacy benefit manager in connection 

8 with the utilization of covered part D drugs. 

9 ‘‘(iii) CLARIFICATION ON REBATES AND

10 DISCOUNTS USED TO LOWER COSTS FOR

11 COVERED PART D DRUGS.—Rebates, dis12 counts, and other price concessions received 

13 from manufacturers, even if such price con14 cessions are calculated as a percentage of a 

15 drug’s price, shall not be considered a viola16 tion of the requirements of clause (i) if they 

17 are fully passed through to a PDP sponsor 

18 and exclusively used to lower costs for pre19 scription drugs under this part, including 

20 in cases where a PDP sponsor is acting as 

21 a pharmacy benefit manager on behalf of a 

22 prescription drug plan offered by such PDP 

23 sponsor. 

24 ‘‘(iv) EVALUATION OF REMUNERATION

25 ARRANGEMENTS.—Remuneration arrangeVerDate Sep 11 2014 00:49 Dec 08, 2023 Jkt 049200 PO 00000 Frm 00073 Fmt 6652 Sfmt 6203 E:\BILLS\S2973.RS S2973
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1 ments between pharmacy benefit managers 

2 or affiliates of such pharmacy benefit man3 agers, as applicable, and other entities in4 volved in the dispensing or utilization of 

5 covered part D drugs (including PDP spon6 sors, manufacturers, pharmacies, and other 

7 entities as determined appropriate by the 

8 Secretary) shall be subject to review by the 

9 Secretary and the Office of the Inspector 

10 General of the Department of Health and 

11 Human Services. The Secretary, in con12 sultation with the Office of the Inspector 

13 General, shall evaluate whether remunera14 tion under such arrangements is consistent 

15 with fair market value through reviews and 

16 assessments of such remuneration, as deter17 mined appropriate. 

18 ‘‘(B) TRANSPARENCY REGARDING GUARAN19 TEES AND COST PERFORMANCE EVALUATIONS.— 

20 The pharmacy benefit manager shall— 

21 ‘‘(i) define, interpret, and apply, in a 

22 fully transparent and consistent manner for 

23 purposes of calculating or otherwise evalu24 ating pharmacy benefit manager perform25 ance against pricing guarantees or similar 

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1 cost performance measurements related to 

2 rebates, discounts, price concessions, or net 

3 costs, terms such as— 

4 ‘‘(I) ‘generic drug’, in a manner 

5 consistent with the definition of the 

6 term under section 423.4 of title 42, 

7 Code of Federal Regulations, or a suc8 cessor regulation; 

9 ‘‘(II) ‘brand name drug’, in a 

10 manner consistent with the definition 

11 of the term under section 423.4 of title 

12 42, Code of Federal Regulations, or a 

13 successor regulation; 

14 ‘‘(III) ‘specialty drug’; 

15 ‘‘(IV) ‘rebate’; and 

16 ‘‘(V) ‘discount’; 

17 ‘‘(ii) identify any drugs, claims, or 

18 price concessions excluded from any pricing 

19 guarantee or other cost performance calcula20 tion or evaluation in a clear and consistent 

21 manner; and 

22 ‘‘(iii) where a pricing guarantee or 

23 other cost performance measure is based on 

24 a pricing benchmark other than the whole25 sale acquisition cost (as defined in section 

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1 1847A(c)(6)(B)) of a drug, calculate and 

2 provide a wholesale acquisition cost-based 

3 equivalent to the pricing guarantee or other 

4 cost performance measure in the written 

5 agreement. 

6 ‘‘(C) PROVISION OF INFORMATION.— 

7 ‘‘(i) IN GENERAL.—Not later than July 

8 1 of each year, beginning in 2026, the phar9 macy benefit manager shall submit to the 

10 PDP sponsor, and to the Secretary, a re11 port, in accordance with this subparagraph, 

12 and shall make such report available to 

13 such sponsor at no cost to such sponsor in 

14 a format specified by the Secretary under 

15 paragraph (4). Each such report shall in16 clude, with respect to such PDP sponsor 

17 and each plan offered by such sponsor, the 

18 following information with respect to the 

19 previous plan year: 

20 ‘‘(I) A list of all drugs covered by 

21 the plan that were dispensed including, 

22 with respect to each such drug— 

23 ‘‘(aa) the brand name, ge24 neric or non-proprietary name, 

25 and National Drug Code; 

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1 ‘‘(bb) the number of plan en2 rollees for whom the drug was dis3 pensed, the total number of pre4 scription claims for the drug (in5 cluding original prescriptions and 

6 refills, counted as separate 

7 claims), and the total number of 

8 dosage units of the drug dis9 pensed; 

10 ‘‘(cc) the number of prescrip11 tion claims described in item (bb) 

12 by each type of dispensing chan13 nel through which the drug was 

14 dispensed, including retail, mail 

15 order, specialty pharmacy, long 

16 term care pharmacy, home infu17 sion pharmacy, or other types of 

18 pharmacies or providers; 

19 ‘‘(dd) the average wholesale 

20 acquisition cost, listed as cost per 

21 day’s supply, cost per dosage unit, 

22 and cost per typical course of 

23 treatment (as applicable); 

24 ‘‘(ee) the average wholesale 

25 price for the drug, listed as cost 

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1 per day’s supply, cost per dosage 

2 unit, and cost per typical course 

3 of treatment (as applicable); 

4 ‘‘(ff) the total out-of-pocket 

5 spending by plan enrollees on 

6 such drug after application of any 

7 benefits under the plan, including 

8 plan enrollee spending through co9 payments, coinsurance, and 

10 deductibles; 

11 ‘‘(gg) total rebates paid by 

12 the manufacturer on the drug as 

13 reported under the Detailed DIR 

14 Report (or any successor report) 

15 submitted by such sponsor to the 

16 Centers for Medicare & Medicaid 

17 Services; 

18 ‘‘(hh) all other direct or indi19 rect remuneration on the drug as 

20 reported under the Detailed DIR 

21 Report (or any successor report) 

22 submitted by such sponsor to the 

23 Centers for Medicare & Medicaid 

24 Services; 

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1 ‘‘(ii) the average pharmacy 

2 reimbursement amount paid by 

3 the plan for the drug in the aggre4 gate and disaggregated by dis5 pensing channel identified in item 

6 (cc); 

7 ‘‘(jj) the average National 

8 Average Drug Acquisition Cost 

9 (NADAC) for retail community 

10 pharmacies; and 

11 ‘‘(kk) total manufacturer-de12 rived revenue, inclusive of bona 

13 fide service fees, retained by the 

14 pharmacy benefit manager and 

15 any affiliate of such pharmacy 

16 benefit manager attributable to 

17 the drug. 

18 ‘‘(II) In the case of a pharmacy 

19 benefit manager that has an affiliate 

20 that is a retail, mail order, or spe21 cialty pharmacy, with respect to drugs 

22 covered by such plan that were dis23 pensed, the following information: 

24 ‘‘(aa) The percentage of total 

25 prescriptions that were dispensed 

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1 by pharmacies that are an affil2 iate of the pharmacy benefit man3 ager for each drug. 

4 ‘‘(bb) The interquartile range 

5 of the total combined costs paid 

6 by the plan and plan enrollees, 

7 per dosage unit, per course of 

8 treatment, per 30-day supply, and 

9 per 90-day supply for each drug 

10 dispensed by pharmacies that are 

11 not an affiliate of the pharmacy 

12 benefit manager and that are in13 cluded in the pharmacy network 

14 of such plan. 

15 ‘‘(cc) The interquartile range 

16 of the total combined costs paid 

17 by the plan and plan enrollees, 

18 per dosage unit, per course of 

19 treatment, per 30-day supply, and 

20 per 90-day supply for each drug 

21 dispensed by pharmacies that are 

22 an affiliate of the pharmacy ben23 efit manager and that are in24 cluded in the pharmacy network 

25 of such plan. 

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1 ‘‘(dd) The lowest total com2 bined cost paid by the plan and 

3 plan enrollees, per dosage unit, 

4 per course of treatment, per 30- 

5 day supply, and per 90-day sup6 ply, for each drug that is avail7 able from any pharmacy included 

8 in the pharmacy network of such 

9 plan. 

10 ‘‘(ee) The difference between 

11 the average acquisition cost of the 

12 affiliate, such as a pharmacy or 

13 other entity that acquires pre14 scription drugs, that initially ac15 quires the drug and the amount 

16 reported under subclause (I)(jj) 

17 for each drug. 

18 ‘‘(ff) A list of covered part D 

19 drugs subject to an agreement 

20 with a covered entity under sec21 tion 340B of the Public Health 

22 Service Act for which the phar23 macy benefit manager or an affil24 iate of the pharmacy benefit man25 ager had a contract or other arVerDate Sep 11 2014 00:49 Dec 08, 2023 Jkt 049200 PO 00000 Frm 00081 Fmt 6652 Sfmt 6203 E:\BILLS\S2973.RS S2973
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1 rangement with such a covered en2 tity in the service area of such 

3 plan. 

4 ‘‘(III) Where a drug approved 

5 under section 505(c) of the Federal 

6 Food, Drug, and Cosmetic Act (referred 

7 to in this subclause as the ‘listed drug’) 

8 is covered by the plan, the following 

9 information: 

10 ‘‘(aa) A list of currently 

11 marketed generic drugs approved 

12 under section 505(j) of the Federal 

13 Food, Drug, and Cosmetic Act 

14 pursuant to an application that 

15 references such listed drug that 

16 are not covered by the plan, are 

17 covered on the same formulary 

18 tier or a formulary tier typically 

19 associated with higher cost-shar20 ing than the listed drug, or are 

21 subject to utilization management 

22 that the listed drug is not subject 

23 to. 

24 ‘‘(bb) The estimated average 

25 beneficiary cost-sharing under the 

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1 plan for a 30-day supply of the 

2 listed drug. 

3 ‘‘(cc) Where a generic drug 

4 listed under item (aa) is on a for5 mulary tier typically associated 

6 with higher cost-sharing than the 

7 listed drug, the estimated average 

8 cost-sharing that a beneficiary 

9 would have paid for a 30-day 

10 supply of each of the generic drugs 

11 described in item (aa), had the 

12 plan provided coverage for such 

13 drugs on the same formulary tier 

14 as the listed drug. 

15 ‘‘(dd) A written justification 

16 for providing more favorable cov17 erage of the listed drug than the 

18 generic drugs described in item 

19 (aa). 

20 ‘‘(ee) The number of cur21 rently marketed generic drugs ap22 proved under section 505(j) of the 

23 Federal Food, Drug, and Cosmetic 

24 Act pursuant to an application 

25 that references such listed drug. 

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1 ‘‘(IV) Where a reference product 

2 (as defined in section 351(i) of the 

3 Public Health Service Act) is covered 

4 by the plan, the following information: 

5 ‘‘(aa) A list of currently 

6 marketed biosimilar biological 

7 products licensed under section 

8 351(k) of the Public Health Serv9 ice Act pursuant to an applica10 tion that refers to such reference 

11 product that are not covered by 

12 the plan, are covered on the same 

13 formulary tier or a formulary tier 

14 typically associated with higher 

15 cost-sharing than the reference 

16 product, or are subject to utiliza17 tion management that the ref18 erence product is not subject to. 

19 ‘‘(bb) The estimated average 

20 beneficiary cost-sharing under the 

21 plan for a 30-day supply of the 

22 reference product. 

23 ‘‘(cc) Where a biosimilar bio24 logical product listed under item 

25 (aa) is on a formulary tier typiVerDate Sep 11 2014 00:49 Dec 08, 2023 Jkt 049200 PO 00000 Frm 00084 Fmt 6652 Sfmt 6203 E:\BILLS\S2973.RS S2973
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1 cally associated with higher cost2 sharing than the listed drug, the 

3 estimated average cost-sharing 

4 that a beneficiary would have 

5 paid for a 30-day supply of each 

6 of the biosimilar biological prod7 ucts described in item (aa), had 

8 the plan provided coverage for 

9 such products on the same for10 mulary tier as the reference prod11 uct. 

12 ‘‘(dd) A written justification 

13 for providing more favorable cov14 erage of the reference product than 

15 the biosimilar biological product 

16 described in item (aa). 

17 ‘‘(ee) The number of cur18 rently marketed biosimilar bio19 logical products licensed under 

20 section 351(k) of the Public 

21 Health Service Act, pursuant to 

22 an application that refers to such 

23 reference product. 

24 ‘‘(V) Total gross spending on cov25 ered part D drugs by the plan, not net 

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1 of rebates, fees, discounts, or other di2 rect or indirect remuneration. 

3 ‘‘(VI) The total amount retained 

4 by the pharmacy benefit manager or 

5 an affiliate of such pharmacy benefit 

6 manager in revenue related to utiliza7 tion of prescription drugs under that 

8 plan, inclusive of bona fide service fees. 

9 ‘‘(VII) The total spending on cov10 ered part D drugs net of rebates, fees, 

11 discounts, or other direct and indirect 

12 remuneration by the plan. 

13 ‘‘(VIII) An explanation of any 

14 benefit design parameters under such 

15 plan that encourage plan enrollees to 

16 fill prescriptions at pharmacies that 

17 are an affiliate of such pharmacy ben18 efit manager, such as mail and spe19 cialty home delivery programs, and re20 tail and mail auto-refill programs. 

21 ‘‘(IX) A list of all brokers, con22 sultants, advisors, and auditors that 

23 receive compensation from the phar24 macy benefit manager or an affiliate of 

25 such pharmacy benefit manager for reVerDate Sep 11 2014 00:49 Dec 08, 2023 Jkt 049200 PO 00000 Frm 00086 Fmt 6652 Sfmt 6203 E:\BILLS\S2973.RS S2973
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1 ferrals, consulting, auditing, or other 

2 services offered to PDP sponsors re3 lated to pharmacy benefit management 

4 services. 

5 ‘‘(X) A list of all affiliates of the 

6 pharmacy benefit manager. 

7 ‘‘(XI) A summary document sub8 mitted in a standardized template de9 veloped by the Secretary that includes 

10 such information described in sub11 clauses (I) through (X). 

12 ‘‘(ii) WRITTEN EXPLANATION OF CON13 TRACTS OR AGREEMENTS WITH DRUG MANU14 FACTURERS.— 

15 ‘‘(I) IN GENERAL.—The pharmacy 

16 benefit manager shall, not later than 

17 30 days after the finalization of any 

18 contract or agreement between such 

19 pharmacy benefit manager or an affil20 iate of such pharmacy benefit manager 

21 and a drug manufacturer (or sub22 sidiary, agent, or entity affiliated with 

23 such drug manufacturer) that makes 

24 rebates, discounts, payments, or other 

25 financial incentives related to one or 

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1 more prescription drugs of the manu2 facturer directly or indirectly contin3 gent upon coverage, formulary place4 ment, or utilization management con5 ditions on any other prescription 

6 drugs, submit to the PDP sponsor a 

7 written explanation of such contract or 

8 agreement. 

9 ‘‘(II) REQUIREMENTS.—A written 

10 explanation under subclause (I) 

11 shall— 

12 ‘‘(aa) include the manufac13 turer subject to the contract or 

14 agreement, all prescription drugs 

15 subject to the contract or agree16 ment and the manufacturers of 

17 such drugs, and a high-level de18 scription of the terms of such con19 tract or agreement and how such 

20 terms apply to such drugs; and 

21 ‘‘(bb) be certified by the Chief 

22 Executive Officer, Chief Financial 

23 Officer, or General Counsel of 

24 such pharmacy benefit manager, 

25 affiliate of such pharmacy benefit 

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1 manager, or an individual dele2 gated with the authority to sign 

3 on behalf of one of these officers, 

4 who reports directly to the officer. 

5 ‘‘(D) AUDIT RIGHTS.— 

6 ‘‘(i) IN GENERAL.—Not less than once 

7 a year, at the request of the PDP sponsor, 

8 the pharmacy benefit manager shall allow 

9 for an audit of the pharmacy benefit man10 ager to ensure compliance with all terms 

11 and conditions under the written agreement 

12 and the accuracy of information reported 

13 under subparagraph (C). 

14 ‘‘(ii) AUDITOR.—The PDP sponsor 

15 shall have the right to select an auditor. The 

16 pharmacy benefit manager shall not impose 

17 any limitations on the selection of such 

18 auditor. 

19 ‘‘(iii) PROVISION OF INFORMATION.— 

20 The pharmacy benefit manager shall make 

21 available to such auditor all records, data, 

22 contracts, and other information necessary 

23 to confirm the accuracy of information pro24 vided under subparagraph (C), subject to 

25 reasonable restrictions on how such inforVerDate Sep 11 2014 00:49 Dec 08, 2023 Jkt 049200 PO 00000 Frm 00089 Fmt 6652 Sfmt 6203 E:\BILLS\S2973.RS S2973
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1 mation must be reported to prevent redisclo2 sure of such information. 

3 ‘‘(iv) TIMING.—The pharmacy benefit 

4 manager must provide information under 

5 clause (iii) and other information, data, 

6 and records relevant to the audit to such 

7 auditor within 6 months of the initiation of 

8 the audit and respond to requests for addi9 tional information from such auditor with10 in 30 days after the request for additional 

11 information. 

12 ‘‘(v) INFORMATION FROM AFFILI13 ATES.—The pharmacy benefit manager 

14 shall be responsible for providing to such 

15 auditor information required to be reported 

16 under subparagraph (C) that is owned or 

17 held by an affiliate of such pharmacy ben18 efit manager. 

19 ‘‘(E) ENFORCEMENT.—The pharmacy ben20 efit manager shall— 

21 ‘‘(i) disgorge to a PDP sponsor (or, in 

22 a case where the PDP sponsor is an affiliate 

23 of such pharmacy benefit manager, to the 

24 Secretary) any payment, remuneration, or 

25 other amount received by the pharmacy benVerDate Sep 11 2014 00:49 Dec 08, 2023 Jkt 049200 PO 00000 Frm 00090 Fmt 6652 Sfmt 6203 E:\BILLS\S2973.RS S2973
91 

•S 2973 RS

1 efit manager or an affiliate of such phar2 macy benefit manager in violation of sub3 paragraph (A) or the written agreement en4 tered into with such sponsor under this part 

5 with respect to a prescription drug plan; 

6 ‘‘(ii) reimburse the PDP sponsor for 

7 any civil money penalty imposed on the 

8 PDP sponsor as a result of the failure of the 

9 pharmacy benefit manager to meet the re10 quirements of this paragraph that are ap11 plicable to the pharmacy benefit manager 

12 under the agreement; and 

13 ‘‘(iii) be subject to punitive remedies 

14 for breach of contract for failure to comply 

15 with the requirements applicable under this 

16 paragraph. 

17 ‘‘(2) CERTIFICATION OF COMPLIANCE.—Each 

18 PDP sponsor shall furnish to the Secretary (in a time 

19 and manner specified by the Secretary) an annual 

20 certification of compliance with this subsection, as 

21 well as such information as the Secretary determines 

22 necessary to carry out this subsection. 

23 ‘‘(3) RULE OF CONSTRUCTION.—Nothing in this 

24 subsection shall be construed as prohibiting payments 

25 related to reimbursement for ingredient costs to any 

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1 entity that acquires prescription drugs, such as a 

2 pharmacy or wholesaler. 

3 ‘‘(4) STANDARD FORMATS.—Not later than June 

4 1, 2025, the Secretary shall specify standard, ma5 chine-readable formats for pharmacy benefit man6 agers to submit annual reports required under para7 graph (1)(C)(i). 

8 ‘‘(5) CONFIDENTIALITY.— 

9 ‘‘(A) IN GENERAL.—Information disclosed 

10 by a pharmacy benefit manager or PDP sponsor 

11 under this subsection that is not otherwise pub12 licly available or available for purchase shall not 

13 be disclosed by the Secretary or a PDP sponsor 

14 receiving the information, except that the Sec15 retary may disclose the information for the fol16 lowing purposes: 

17 ‘‘(i) As the Secretary determines nec18 essary to carry out this part. 

19 ‘‘(ii) To permit the Comptroller Gen20 eral to review the information provided. 

21 ‘‘(iii) To permit the Director of the 

22 Congressional Budget Office to review the 

23 information provided. 

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•S 2973 RS

1 ‘‘(iv) To permit the Executive Director 

2 of the Medicare Payment Advisory Commis3 sion to review the information provided. 

4 ‘‘(v) To the Attorney General for the 

5 purposes of conducting oversight and en6 forcement under this title. 

7 ‘‘(vi) To the Inspector General of the 

8 Department of Health and Human Services 

9 in accordance with its authorities under the 

10 Inspector General Act of 1978 (section 406 

11 of title 5, United States Code), and other 

12 applicable statutes. 

13 ‘‘(B) RESTRICTION ON USE OF INFORMA14 TION.—The Secretary, the Comptroller General, 

15 the Director of the Congressional Budget Office, 

16 and the Executive Director of the Medicare Pay17 ment Advisory Commission shall not report on 

18 or disclose information disclosed pursuant to 

19 subparagraph (A) to the public in a manner that 

20 would identify a specific pharmacy benefit man21 ager, affiliate, manufacturer or wholesaler, PDP 

22 sponsor, or plan, or contract prices, rebates, dis23 counts, or other remuneration for specific drugs 

24 in a manner that may allow the identification 

25 of specific contracting parties. 

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1 ‘‘(6) DEFINITIONS.—For purposes of this sub2 section: 

3 ‘‘(A) AFFILIATE.—The term ‘affiliate’ 

4 means any entity that is owned by, controlled 

5 by, or related under a common ownership struc6 ture with a pharmacy benefit manager or PDP 

7 sponsor, or that acts as a contractor or agent to 

8 such pharmacy benefit manager or PDP sponsor, 

9 insofar as such contractor or agent performs any 

10 of the functions described under subparagraph 

11 (C). 

12 ‘‘(B) BONA FIDE SERVICE FEE.—The term 

13 ‘bona fide service fee’ means a fee that is reflec14 tive of the fair market value for a bona fide, 

15 itemized service actually performed on behalf of 

16 an entity, that the entity would otherwise per17 form (or contract for) in the absence of the serv18 ice arrangement and that are not passed on in 

19 whole or in part to a client or customer, whether 

20 or not the entity takes title to the drug. Such fee 

21 must be a flat dollar amount and shall not be di22 rectly or indirectly based on, or contingent 

23 upon— 

95 

•S 2973 RS

1 ‘‘(i) drug price, such as wholesale ac2 quisition cost or drug benchmark price 

3 (such as average wholesale price); 

4 ‘‘(ii) discounts, rebates, fees, or other 

5 direct or indirect remuneration amounts 

6 with respect to covered part D drugs dis7 pensed to enrollees in a prescription drug 

8 plan, except as permitted pursuant to para9 graph (1)(A)(ii); 

10 ‘‘(iii) coverage or formulary placement 

11 decisions or the volume or value of any re12 ferrals or business generated between the 

13 parties to the arrangement; or 

14 ‘‘(iv) any other amounts or methodolo15 gies prohibited by the Secretary. 

16 ‘‘(C) PHARMACY BENEFIT MANAGER.—The 

17 term ‘pharmacy benefit manager’ means any 

18 person or entity that, either directly or through 

19 an intermediary, acts as a price negotiator or 

20 group purchaser on behalf of a PDP sponsor or 

21 prescription drug plan, or manages the prescrip22 tion drug benefits provided by such sponsor or 

23 plan, including the processing and payment of 

24 claims for prescription drugs, the performance of 

25 drug utilization review, the processing of drug 

96 

•S 2973 RS

1 prior authorization requests, the adjudication of 

2 appeals or grievances related to the prescription 

3 drug benefit, contracting with network phar4 macies, controlling the cost of covered part D 

5 drugs, or the provision of related services. Such 

6 term includes any person or entity that carries 

7 out one or more of the activities described in the 

8 preceding sentence, irrespective of whether such 

9 person or entity calls itself a ‘pharmacy benefit 

10 manager’.’’. 

11 (2) MA–PD PLANS.—Section 1857(f)(3) of the 

12 Social Security Act (42 U.S.C. 1395w–27(f)(3)) is 

13 amended by adding at the end the following new sub14 paragraph: 

15 ‘‘(F) REQUIREMENTS RELATING TO PHAR16 MACY BENEFIT MANAGERS.—For plan years be17 ginning on or after January 1, 2026, section 

18 1860D–12(h).’’. 

19 (3) FUNDING.— 

20 (A) SECRETARY.—In addition to amounts 

21 otherwise available, there is appropriated to the 

22 Centers for Medicare & Medicaid Services Pro23 gram Management Account, out of any money in 

24 the Treasury not otherwise appropriated, 

25 $20,000,000 for fiscal year 2026, to remain 

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•S 2973 RS

1 available until expended, to carry out the 

2 amendments made by this subsection. 

3 (B) OIG.—In addition to amounts other4 wise available, there is appropriated to the In5 spector General of the Department of Health and 

6 Human Services, out of any money in the Treas7 ury not otherwise appropriated, $5,000,000 for 

8 fiscal year 2026, to remain available until ex9 pended, to carry out the amendments made by 

10 this subsection. 

11 (b) GAO STUDY AND REPORT ON CERTAIN REPORTING

12 REQUIREMENTS.— 

13 (1) STUDY.—The Comptroller General of the 

14 United States (in this subsection referred to as the 

15 ‘‘Comptroller General’’) shall conduct a study on Fed16 eral and State reporting requirements for health 

17 plans and pharmacy benefit managers related to the 

18 transparency of prescription drug costs and prices. 

19 Such study shall include an analysis of the following: 

20 (A) Federal statutory and regulatory re21 porting requirements for health plans and phar22 macy benefit managers related to prescription 

23 drug costs and prices. 

24 (B) Selected States’ statutory and regu25 latory reporting requirements for health plans 

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1 and pharmacy benefit managers related to pre2 scription drug costs and prices. 

3 (C) The extent to which the statutory and 

4 regulatory reporting requirements identified in 

5 subparagraphs (A) and (B) overlap and conflict. 

6 (D) The resources required by health plans 

7 and pharmacy benefit managers to comply with 

8 the reporting requirements described in subpara9 graphs (A) and (B). 

10 (E) Other items determined appropriate by 

11 the Comptroller General. 

12 (2) REPORT.—Not later than 2 years after the 

13 date on which information is first required to be re14 ported under section 1860D–12(h)(1)(C) of the Social 

15 Security Act, as added by subsection (a)(1), the 

16 Comptroller General shall submit to Congress a report 

17 containing the results of the study conducted under 

18 paragraph (1), together with recommendations for leg19 islation and administrative actions that would 

20 streamline and reduce the burden associated with the 

21 reporting requirements for health plans and phar22 macy benefit managers described in paragraph (1). 

23 (c) MEDPAC REPORTS ON AGREEMENTS WITH PHAR24 MACY BENEFIT MANAGERS WITH RESPECT TO PRESCRIP25 TION DRUG PLANS AND MA-PD PLANS.—The Medicare 

99 

•S 2973 RS

1 Payment Advisory Commission shall submit to Congress the 

2 following reports: 

3 (1) Not later than March 31, 2027, a report re4 garding agreements with pharmacy benefit managers 

5 with respect to prescription drug plans and MA-PD 

6 plans. Such report shall include— 

7 (A) a description of trends and patterns, in8 cluding relevant averages, totals, and other fig9 ures for each of the types of information sub10 mitted; 

11 (B) an analysis of any differences in agree12 ments and their effects on plan enrollee out-of13 pocket spending and average pharmacy reim14 bursement, and any other impacts; and 

15 (C) any recommendations the Commission 

16 determines appropriate. 

17 (2) Not later than March 31, 2029, a report de18 scribing any changes with respect to the information 

19 described in paragraph (1) over time, together with 

20 any recommendations the Commission determines ap21 propriate. 

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1 SEC. 3. ENSURING FAIR ASSESSMENT OF PHARMACY PER2 FORMANCE AND QUALITY UNDER MEDICARE 

3 PART D. 

4 (a) STANDARDIZED PHARMACY PERFORMANCE MEAS5 URES.—Section 1860D–2 of the Social Security Act (42 

6 U.S.C. 1395w–102) is amended by adding at the end the 

7 following new subsection: 

8 ‘‘(f) APPLICATION OF STANDARDIZED PHARMACY PER9 FORMANCE MEASURES.— 

10 ‘‘(1) MEASURES.—For plan years beginning on 

11 or after January 1, 2025, a PDP sponsor offering a 

12 prescription drug plan and an MA organization offer13 ing an MA–PD plan shall, for purposes of incentive 

14 payments, price concessions, or any fees or other re15 muneration paid or charged to a pharmacy based on 

16 performance measures, only use measures that are— 

17 ‘‘(A) established or adopted by the Secretary 

18 under paragraph (2) and included on the list de19 scribed in subparagraph (B) of such paragraph; 

20 and 

21 ‘‘(B) relevant to the performance of such 

22 pharmacy based on the type of pharmacy (in23 cluding retail, mail order, specialty, long term 

24 care, and home infusion or other types of phar25 macies), drugs dispensed by such pharmacy, and 

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1 pharmacy services used to dispense and manage 

2 drugs by such pharmacy. 

3 ‘‘(2) STANDARDIZED PHARMACY PERFORMANCE

4 MEASURES.— 

5 ‘‘(A) MEASURES.— 

6 ‘‘(i) IN GENERAL .—Notwithstanding 

7 any other provision of law, the Secretary 

8 shall establish (or adopt pursuant to clause 

9 (iii)) standardized pharmacy performance 

10 measures that may be used by a PDP spon11 sor offering a prescription drug plan and 

12 an MA organization offering an MA–PD 

13 plan for the purpose of determining incen14 tive payments, price concessions, or fees or 

15 other remuneration described in paragraph 

16 (1). 

17 ‘‘(ii) REQUIREMENTS.—The measures 

18 under clause (i) shall focus on pharmacy 

19 performance and quality of care based on 

20 the type of pharmacy, as determined by the 

21 Secretary. Such measures shall be evidence22 based, feasible, appropriate and reasonable. 

23 ‘‘(iii) ADOPTION OF MEASURE.—In 

24 lieu of establishing some or all of the meas25 ures under this paragraph, the Secretary 

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1 may adopt measures that are endorsed by 

2 one or more multi-stakeholder consensus or3 ganizations (such as the Pharmacy Quality 

4 Alliance), that has participation from phar5 macies (including retail and specialty phar6 macies not owned or affiliated with a plan, 

7 pharmacy benefit manager, or other phar8 macy), health plans, pharmacy benefit 

9 managers, and the Centers for Medicare & 

10 Medicaid Services. Any measure adopted 

11 under this clause shall be deemed to meet 

12 the requirements under clause (ii). 

13 ‘‘(B) MAINTENANCE OF LIST.— 

14 ‘‘(i) IN GENERAL.—The Secretary shall 

15 maintain, and publish on a publicly avail16 able internet website, a list of measures es17 tablished or adopted under this paragraph. 

18 Such list shall initially be published no 

19 later than June 1, 2024. 

20 ‘‘(ii) UPDATE.—The Secretary shall 

21 periodically evaluate measures, and how 

22 measures are applied by type of pharmacy 

23 and update the measures on the list under 

24 clause (i) so that such measures meet the re25 quirements under subparagraph (A)(ii). 

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1 ‘‘(3) NONAPPLICATION OF PAPERWORK REDUC2 TION ACT.—Chapter 35 of title 44, United States 

3 Code, shall not apply to any data collection under4 taken by the Secretary under this subsection.’’. 

5 (b) FUNDING.—In addition to amounts otherwise 

6 available, there is appropriated to the Centers for Medicare 

7 & Medicaid Services Program Management Account, out of 

8 any money in the Treasury not otherwise appropriated, 

9 $4,000,000 for fiscal year 2025, to remain available until 

10 expended, to carry out the amendment made by subsection 

11 (a). 

12 SEC. 4. PROMOTING TRANSPARENCY FOR PHARMACIES 

13 UNDER MEDICARE PART D. 

14 (a) TRANSPARENCY FOR PHARMACIES.—Section 

15 1860D–2(f) of the Social Security Act (42 U.S.C. 1395w– 

16 102(f)), as added by section 3, is amended by adding at 

17 the end the following new paragraph: 

18 ‘‘(4) TRANSPARENCY FOR PHARMACIES.— 

19 ‘‘(A) IN GENERAL.—For plan years begin20 ning on or after January 1, 2025, a PDP spon21 sor offering a prescription drug plan and an MA 

22 organization offering an MA–PD plan, with re23 spect to payment made by such PDP sponsor or 

24 such MA organization to a pharmacy for a cov25 ered part D drug dispensed by such pharmacy 

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1 during a plan year, shall promptly furnish, 

2 upon paying a claim for a covered part D drug 

3 from a pharmacy, to such pharmacy information 

4 related to such claim, such as the Network Reim5 bursement ID, fees, pharmacy price concessions, 

6 discounts, incentives, or any other forms of re7 muneration that affect payment and pricing of 

8 the claim. 

9 ‘‘(B) STANDARDIZED FORMAT.—The PDP 

10 sponsor and the MA organization shall furnish 

11 the information described in subparagraph (A) 

12 in a standardized format (as specified by the 

13 Secretary) that includes all fields needed to price 

14 the claim for a covered part D drug dispensed by 

15 such pharmacy. 

16 ‘‘(C) AVAILABILITY OF INFORMATION TO

17 THE SECRETARY.—A PDP sponsor offering a 

18 prescription drug plan or an MA organization 

19 offering an MA-PD plan shall make the informa20 tion described in subparagraph (A) available to 

21 the Secretary upon request. 

22 ‘‘(D) IMPLEMENTATION.—Notwithstanding 

23 any other provision of law, the Secretary shall 

24 implement this paragraph by program instruc25 tion or otherwise.’’. 

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1 (b) FUNDING.—In addition to amounts otherwise 

2 available, there is appropriated to the Centers for Medicare 

3 & Medicaid Services Program Management Account, out of 

4 any money in the Treasury not otherwise appropriated, 

5 $2,000,000 for fiscal year 2025, to remain available until 

6 expended, to carry out the amendment made by subsection 

7 (a). 

8 SEC. 5. PREVENTING THE USE OF ABUSIVE SPREAD PRIC9 ING IN MEDICAID. 

10 (a) IN GENERAL.—Section 1927(e) of the Social Secu11 rity Act (42 U.S.C. 1396r–8(e)) is amended by adding at 

12 the end the following: 

13 ‘‘(6) TRANSPARENT PRESCRIPTION DRUG PASS14 THROUGH PRICING REQUIRED.—A contract between 

15 the State and a pharmacy benefit manager (referred 

16 to in this paragraph as a ‘PBM’), or a contract be17 tween the State and a managed care entity or other 

18 specified entity (as such terms are defined in section 

19 1903(m)(9)(D) and collectively referred to in this 

20 paragraph as the ‘entity’) that includes provisions 

21 making the entity responsible for coverage of covered 

22 outpatient drugs dispensed to individuals enrolled 

23 with the entity, shall require that payment for such 

24 drugs and related administrative services (as applica25 ble), including payments made by a PBM on behalf 

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1 of the State or entity, is based on a transparent pre2 scription drug pass-through pricing model under 

3 which— 

4 ‘‘(A) any payment made by the entity or 

5 the PBM (as applicable) for such a drug— 

6 ‘‘(i) is limited to— 

7 ‘‘(I) ingredient cost; and 

8 ‘‘(II) a professional dispensing fee 

9 that is not less than the professional 

10 dispensing fee that the State plan or 

11 waiver would pay if the plan or waiv12 er was making the payment directly; 

13 ‘‘(ii) is passed through in its entirety 

14 by the entity or PBM to the pharmacy or 

15 provider that dispenses the drug (and shall 

16 not be reduced or denied retroactively under 

17 post-adjudication processes); and 

18 ‘‘(iii) is made in a manner that is con19 sistent with sections 447.502, 447.512, 

20 447.514, and 447.518 of title 42, Code of 

21 Federal Regulations (or any successor regu22 lation) as if such requirements applied di23 rectly to the entity or the PBM, except that 

24 any payment by the entity or the PBM for 

25 the ingredient cost of such drug purchased 

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1 by a covered entity (as defined in subsection 

2 (a)(5)(B)) may exceed the actual acquisi3 tion cost (as defined in 447.502 of title 42, 

4 Code of Federal Regulations, or any suc5 cessor regulation) for such drug if— 

6 ‘‘(I) such drug was subject to an 

7 agreement under section 340B of the 

8 Public Health Service Act; 

9 ‘‘(II) such payment for the ingre10 dient cost of such drug does not exceed 

11 the maximum payment that would 

12 have been made by the entity or the 

13 PBM for the ingredient cost of such 

14 drug if such drug had not been pur15 chased by such covered entity; and 

16 ‘‘(III) such covered entity reports 

17 to the Secretary (in a form and man18 ner specified by the Secretary), on an 

19 annual basis and with respect to pay20 ments for the ingredient costs of such 

21 drugs so purchased by such covered en22 tity that are in excess of the actual ac23 quisition costs for such drugs, the ag24 gregate amount of such excess; 

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1 ‘‘(B) payment to the entity or the PBM (as 

2 applicable) for administrative services performed 

3 by the entity or PBM is limited to the fair mar4 ket value of such services; 

5 ‘‘(C) the entity or the PBM (as applicable) 

6 shall make available to the State, and the Sec7 retary upon request, all costs and payments re8 lated to covered outpatient drugs and accom9 panying administrative services incurred, re10 ceived, or made by the entity or the PBM, in11 cluding ingredient costs, professional dispensing 

12 fees, administrative fees, post-sale and post-in13 voice fees, discounts, or related adjustments such 

14 as direct and indirect remuneration fees, and 

15 any and all other remuneration; and 

16 ‘‘(D) any form of spread pricing whereby 

17 any amount charged or claimed by the entity or 

18 the PBM (as applicable) that exceeds the amount 

19 paid to the pharmacies or providers on behalf of 

20 the State or entity, including any post-sale or 

21 post-invoice fees, discounts, or related adjust22 ments such as direct and indirect remuneration 

23 fees or assessments (after allowing for an admin24 istrative fee as described in subparagraph (B)) is 

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1 not allowable for purposes of claiming Federal 

2 matching payments under this title.’’. 

3 (b) DEFINITION OF PHARMACY BENEFIT MANAGER.— 

4 Section 1927(k) of the Social Security Act (42 U.S.C. 

5 1396r–8(k)) is amended by adding at the end the following 

6 new paragraph: 

7 ‘‘(12) PHARMACY BENEFIT MANAGER.—The term 

8 ‘pharmacy benefit manager’ means any person or en9 tity that, either directly or through an intermediary, 

10 acts as a price negotiator or group purchaser on be11 half of a State, managed care entity or other specified 

12 entity (as such terms are defined in section 

13 1903(m)(9)(D)), or manages the prescription drug 

14 benefits provided by such State, managed care entity, 

15 or other specified entity, including the processing and 

16 payment of claims for prescription drugs, the per17 formance of drug utilization review, the processing of 

18 drug prior authorization requests, the managing of 

19 appeals or grievances related to the prescription drug 

20 benefits, contracting with pharmacies, controlling the 

21 cost of covered outpatient drugs, or the provision of 

22 services related thereto. Such term includes any per23 son or entity that carries out 1 or more of the activi24 ties described in the preceding sentence, irrespective of 

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1 whether such person or entity calls itself a ‘pharmacy 

2 benefit manager’.’’. 

3 (c) CONFORMING AMENDMENTS.—Section 1903(m) of 

4 such Act (42 U.S.C. 1396b(m)) is amended— 

5 (1) in paragraph (2)(A)(xiii)— 

6 (A) by striking ‘‘and (III)’’ and inserting 

7 ‘‘(III)’’; 

8 (B) by inserting before the period at the end 

9 the following: ‘‘, and (IV) if the entity, or a 

10 pharmacy benefit manager acting on behalf of 

11 the entity under a contract or other arrangement 

12 between the entity and the pharmacy benefit 

13 manager, performs any of the activities described 

14 in section 1927(k)(12), such activities shall com15 ply with the requirements of section 1927(e)(6)’’; 

16 and 

17 (C) by moving the left margin 2 ems to the 

18 left; and 

19 (2) by adding at the end the following new para20 graph: 

21 ‘‘(10) No payment shall be made under this title to 

22 a State with respect to expenditures incurred by the State 

23 for payment for services provided by an other specified enti24 ty (as defined in paragraph (9)(D)(iii)) unless such services 

25 are provided in accordance with a contract between the 

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1 State and such entity which satisfies the requirements of 

2 paragraph (2)(A)(xiii).’’. 

3 (d) EFFECTIVE DATE.—The amendments made by this 

4 section apply to contracts between States and managed care 

5 entities, other specified entities, or pharmacy benefit man6 agers that have an effective date beginning on or after the 

7 date that is 18 months after the date of enactment of this 

8 Act. 

9 SEC. 6. ENSURING ACCURATE PAYMENTS TO PHARMACIES 

10 UNDER MEDICAID. 

11 (a) IN GENERAL.—Section 1927(f) of the Social Secu12 rity Act (42 U.S.C. 1396r–8(f)) is amended— 

13 (1) by striking ‘‘and’’ after the semicolon at the 

14 end of paragraph (1)(A)(i) and all that precedes it 

15 through ‘‘(1)’’ and inserting the following: 

16 ‘‘(1) DETERMINING PHARMACY ACTUAL ACQUISI17 TION COSTS.—The Secretary shall conduct a survey of 

18 retail community pharmacy drug prices to determine 

19 the national average drug acquisition cost as follows: 

20 ‘‘(A) USE OF VENDOR.—The Secretary may 

21 contract services for— 

22 ‘‘(i) with respect to retail community 

23 pharmacies, the determination of retail sur24 vey prices of the national average drug ac25 quisition cost for covered outpatient drugs 

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1 that represent a nationwide average of con2 sumer purchase prices for such drugs, net of 

3 all discounts and rebates (to the extent any 

4 information with respect to such discounts 

5 and rebates is available) based on a month6 ly survey of such pharmacies; and’’; 

7 (2) by adding at the end of paragraph (1) the 

8 following: 

9 ‘‘(F) SURVEY REPORTING.—In order to 

10 meet the requirement of section 1902(a)(54), a 

11 State shall require that any retail community 

12 pharmacy in the State that receives any pay13 ment, reimbursement, administrative fee, dis14 count, or rebate related to the dispensing of cov15 ered outpatient drugs to individuals receiving 

16 benefits under this title, regardless of whether 

17 such payment, reimbursement, administrative 

18 fee, discount, or rebate is received from the State 

19 or a managed care entity or other specified enti20 ty (as such terms are defined in section 

21 1903(m)(9)(D)) directly or from a pharmacy 

22 benefit manager or another entity that has a 

23 contract with the State or a managed care entity 

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1 spond to surveys of retail prices conducted under 

2 this paragraph. 

3 ‘‘(G) SURVEY INFORMATION.—Information 

4 on national drug acquisition prices obtained 

5 under this paragraph shall be made publicly 

6 available and shall include at least the following: 

7 ‘‘(i) The monthly response rate to the 

8 survey including a list of pharmacies not in 

9 compliance with subparagraph (F). 

10 ‘‘(ii) The sampling frame and number 

11 of pharmacies sampled monthly. 

12 ‘‘(iii) Information on price concessions 

13 to the pharmacy, including discounts, re14 bates, and other price concessions, to the ex15 tent that such information may be publicly 

16 released and has been collected by the Sec17 retary as part of the survey. 

18 ‘‘(H) PENALTIES.—The Secretary may en19 force non-compliance with this paragraph by a 

20 pharmacy through the establishment of penalties 

21 or the suspension of payments under this title, in 

22 full or in part, until compliance with this para23 graph has been completed.’’; 

24 (3) in paragraph (2)— 

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1 (A) in subparagraph (A), by inserting ‘‘, 

2 including payment rates under Medicaid man3 aged care entities or other specified entities (as 

4 such terms are defined in section 

5 1903(m)(9)(D)),’’ after ‘‘under this title’’; and 

6 (B) in subparagraph (B), by inserting ‘‘and 

7 the basis for such dispensing fees’’ before the 

8 semicolon; and 

9 (4) in paragraph (4), by inserting ‘‘, and 

10 $5,000,000 for fiscal year 2024 and each fiscal year 

11 thereafter,’’ after ‘‘2010’’. 

12 (b) EFFECTIVE DATE.—The amendments made by this 

13 section take effect on the first day of the first quarter that 

14 begins on or after the date that is 18 months after the date 

15 of enactment of this Act. 

16 SEC. 7. OIG STUDY AND REPORT ON DRUG PRICE MARK-UPS 

17 IN MEDICARE PART D. 

18 Section 1860D–42 of the Social Security Act (42 

19 U.S.C. 1395w–152) is amended by adding at the end the 

20 following new subsection: 

21 ‘‘(e) OIG STUDY AND REPORT ON DRUG PRICE MARK22 UPS UNDER THIS PART.— 

23 ‘‘(1) STUDY.—The Inspector General of the De24 partment of Health and Human Services (in this sub25 section referred to as the ‘Inspector General’) shall 

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1 conduct a study on the impact of related party trans2 actions within select vertically integrated entities on 

3 the negotiated price (as defined in section 1860D– 

4 2(d)(1)(B)) paid by part D plan sponsors for covered 

5 part D drugs. Such study may include an analysis 

6 of the following: 

7 ‘‘(A) Acquisition costs by the affiliate with8 in such vertically integrated entities that ini9 tially acquires the prescription drug for a sam10 ple of covered part D drugs, including at least 

11 5 generic drugs, brand drugs, specialty brand 

12 drugs, and specialty generic drugs. 

13 ‘‘(B) The methodologies and negotiation 

14 processes used to calculate transfer prices or 

15 other transactions between related parties with 

16 respect to such covered part D drugs. 

17 ‘‘(C) The impact of the transactions de18 scribed in subparagraph (B) on the negotiated 

19 price, net of direct and indirect remuneration, 

20 for such covered part D drugs. 

21 ‘‘(D) The margin captured by different af22 filiates within such vertically integrated entities 

23 through the transactions described in subpara24 graph (B). 

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1 ‘‘(E) An assessment of the impact of the 

2 transactions described in subparagraph (B) on 

3 costs to individuals enrolled in a prescription 

4 drug plan or an MA–PD plan and program 

5 spending on prescription drugs under this part. 

6 ‘‘(F) Other issues determined to be relevant 

7 and appropriate by the Inspector General. 

8 ‘‘(2) REPORT.—Not later than 3 years after the 

9 date of enactment of this subsection, the Inspector 

10 General shall submit to the Committee on Finance of 

11 the Senate and the Committee on Energy and Com12 merce and the Committee on Ways and Means of the 

13 House of Representatives a report containing the re14 sults of the study conducted under paragraph (1), to15 gether with recommendations for such legislation and 

16 administrative action as the Inspector General deter17 mines appropriate. 

18 ‘‘(3) FUNDING.—In addition to amounts other19 wise available, there is appropriated to the Inspector 

20 General, out of any money in the Treasury not other21 wise appropriated, $5,200,000 for fiscal year 2024, to 

22 remain available until expended, to carry out this 

23 subsection.’’. 

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1 SEC. 8. RESOLVING P&T COMMITTEE CONFLICTS OF INTER2 EST. 

3 Section 1860D–4(b)(3)(A)(ii)(I) of the Social Security 

4 Act (42 U.S.C. 1395w–104(b)(3)(A)(ii)(I)) is amended by 

5 inserting the following before the semicolon: ‘‘(and, for 2025 

6 and each subsequent year, any pharmacy benefit manager 

7 acting under contract with such sponsor offering such 

8 plan)’’. 

9 SEC. 9. ENHANCING PBM TRANSPARENCY REQUIREMENTS. 

10 (a) IN GENERAL.—Section 1150A of the Social Secu11 rity Act (42 U.S.C. 1320b–23) is amended— 

12 (1) by striking subsection (a) and inserting the 

13 following: 

14 ‘‘(a) PROVISION OF INFORMATION.— 

15 ‘‘(1) IN GENERAL.—The following entities shall 

16 provide the information described in subsection (b) to 

17 the Secretary and, in the case of an entity described 

18 in subparagraph (B) or an affiliate of such entity de19 scribed in subparagraph (C), to the health benefits 

20 plan with which the entity is under contract, at such 

21 times, and in such form and manner, as the Sec22 retary shall specify: 

23 ‘‘(A) A health benefits plan. 

24 ‘‘(B) Any entity that provides pharmacy 

25 benefits management services on behalf of a 

26 health benefits plan (in this section referred to as 

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1 a ‘PBM’) that manages prescription drug cov2 erage under a contract with— 

3 ‘‘(i) a PDP sponsor of a prescription 

4 drug plan or an MA organization offering 

5 an MA–PD plan under part D of title 

6 XVIII; or 

7 ‘‘(ii) a qualified health benefits plan 

8 offered through an exchange established by a 

9 State under section 1311 of the Patient Pro10 tection and Affordable Care Act. 

11 ‘‘(C) Any affiliate of an entity described in 

12 subparagraph (B) that acts as a price negotiator 

13 or group purchaser on behalf of such PBM, PDP 

14 sponsor, MA organization, or qualified health 

15 benefits plan. 

16 ‘‘(2) AFFILIATE DEFINED.—In this section, the 

17 term ‘affiliate’ means any entity that is owned by, 

18 controlled by, or related under a common ownership 

19 structure with a PBM (including an entity owned or 

20 controlled by the PDP sponsor of a prescription drug 

21 plan, MA organization offering an MA–PD plan, or 

22 qualified health benefits plan for which such entity is 

23 acting as a price negotiator or group purchaser).’’; 

24 (2) in subsection (b)— 

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1 (A) in paragraph (2), by inserting ‘‘and 

2 percentage’’ after ‘‘and the aggregate amount’’; 

3 and 

4 (B) by adding at the end the following new 

5 paragraph: 

6 ‘‘(4) The amount (in the aggregate and 

7 disaggregated by type) of all fees the PBM or an affil8 iate of the PBM receives from all pharmaceutical 

9 manufacturers in connection with patient utilization 

10 under the plan, and the amount and percentage (in 

11 the aggregate and disaggregated by type) of such fees 

12 that are passed through to the plan sponsor or 

13 issuer.’’; and 

14 (3) by adding at the end the following new sub15 section: 

16 ‘‘(e) ANNUAL REPORT.—The Secretary shall make 

17 publicly available on the Internet website of the Centers for 

18 Medicare & Medicaid Services an annual report that sum19 marizes the trends observed with respect to data reported 

20 under subsection (b).’’. 

21 (b) EFFECTIVE DATE.—The amendments made by this 

22 section shall apply to plan or contract years beginning on 

23 or after January 1, 2027. 

24 (c) IMPLEMENTATION.—Notwithstanding any other 

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1 ments made by this section by program instruction or other2 wise. 

3 (d) NON-APPLICATION OF THE PAPERWORK REDUC4 TION ACT.—Chapter 35 of title 44, United States Code 

5 (commonly referred to as the ‘‘Paperwork Reduction Act of 

6 1995’’), shall not apply to the implementation of the 

7 amendments made by this section. 

8 SEC. 10. FACILITATING MIDYEAR FORMULARY CHANGES 

9 FOR BIOSIMILARS. 

10 (a) IN GENERAL.—Section 1860D–4(b) of the Social 

11 Security Act (42 U.S.C. 1395w–104(b)) is amended by add12 ing at the end the following new paragraph: 

13 ‘‘(5) MID-YEAR CHANGES IN FORMULARIES PER14 MITTED FOR CERTAIN BIOSIMILAR BIOLOGICAL PROD15 UCTS AND THE REFERENCE PRODUCT OF SUCH

16 BIOSIMILARS.—If a PDP sponsor of a prescription 

17 drug plan uses a formulary (including the use of 

18 tiered cost-sharing), the following shall apply: 

19 ‘‘(A) IN GENERAL.—For plan year 2025, 

20 and subsequent plan years, in the case of a cov21 ered part D drug that is the reference biological 

22 product (as defined in section 351(i) of the Pub23 lic Health Service Act) with respect to a bio24 similar biological product (defined as a biologi25 cal product licensed under section 351(k) of such 

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1 Act), the PDP sponsor may, with respect to a 

2 formulary, at any time after the first 60 days of 

3 the plan year, subject to paragraph (3)(E), 

4 change the preferred or tiered cost-sharing status 

5 of such reference biological product if such PDP 

6 sponsor adds, before or at the same time, to such 

7 formulary such biosimilar biological product at 

8 the same or a higher preferred status, or to the 

9 same or lower cost-sharing tier, as that of such 

10 reference biological product immediately prior to 

11 such change. 

12 ‘‘(B) REQUEST FOR APPROVAL OF

13 CHANGE.—Prior to making a change described 

14 in subparagraph (A), the PDP sponsor shall sub15 mit to the Secretary a request to make such 

16 change. If the Secretary approves the request or 

17 has not provided a decision to the PDP sponsor 

18 regarding such request within 30 days of receiv19 ing such request, such PDP sponsor may make 

20 such change.’’. 

21 (b) ADMINISTRATION.— 

22 (1) IMPLEMENTATION.—Notwithstanding any 

23 other provision of law, the Secretary of Health and 

24 Human Services may implement the amendment 

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1 made by subsection (a) by program instruction or 

2 otherwise. 

3 (2) NON-APPLICATION OF THE PAPERWORK RE4 DUCTION ACT.—Chapter 35 of title 44, United States 

5 Code (commonly referred to as the ‘‘Paperwork Re6 duction Act of 1995’’), shall not apply to the imple7 mentation of the amendment made by subsection (a). 

8 SEC. 11. STRENGTHENING PHARMACY ACCESS FOR SEN9 IORS. 

10 Section 1860D–4(b)(1) of the Social Security Act (42 

11 U.S.C. 1395w–104(b)(1)) is amended by adding at the end 

12 the following new subparagraph: 

13 ‘‘(F) LIMITED ACCESS DRUGS.— 

14 ‘‘(i) LIMITATION ON RESTRICTIONS OR

15 LIMITS ON ACCESS.—For each plan year 

16 (beginning with plan year 2026), a PDP 

17 sponsor offering a prescription drug plan— 

18 ‘‘(I) may not restrict or limit ac19 cess to any covered part D drug to a 

20 subset of their network pharmacies, 

21 other than with respect to a limited ac22 cess drug, as defined in clause (v); and 

23 ‘‘(II) shall document the rationale 

24 for why a covered part D drug meets 

25 the definition of a limited access drug 

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1 under clause (v), if such plan restricts 

2 or limits access to a limited access 

3 drug to a subset of network phar4 macies. 

5 ‘‘(ii) ANNUAL SUBMISSION OF INFOR6 MATION TO THE SECRETARY ON LIMITED

7 ACCESS DRUGS.—For each plan year (be8 ginning with plan year 2026), each PDP 

9 sponsor offering a prescription drug plan 

10 shall submit to the Secretary, at a time and 

11 in a manner specified by the Secretary, 

12 with respect to each prescription drug plan 

13 offered by the sponsor during such plan 

14 year— 

15 ‘‘(I) a list of all covered part D 

16 drugs that the PDP sponsor designated 

17 as a limited access drug; 

18 ‘‘(II) for each covered part D drug 

19 included in the list described in sub20 clause (I), a written rationale for why 

21 such drug meets the definition of a 

22 limited access drug; 

23 ‘‘(III) a summary of the require24 ments imposed on network pharmacies 

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1 ments, if any) to ensure appropriate 

2 handling and dispensing of each cov3 ered part D drug included in the list 

4 described in subclause (I); 

5 ‘‘(IV) the percentages of each cov6 ered part D drug included in the list 

7 described in subclause (I) that is dis8 pensed through retail pharmacies, spe9 cialty pharmacies, mail order phar10 macies, or other dispensing channels as 

11 defined by the PDP sponsor, respec12 tively; 

13 ‘‘(V) the annual percentage of 

14 each covered part D drug included in 

15 the list described in subclause (I) that 

16 is dispensed through a pharmacy that 

17 is affiliated with the plan or is an af18 filiate (as defined in section 1860D– 

19 12(h)(4)(A)) of a pharmacy benefit 

20 manager acting on behalf of such spon21 sor or such plan; and 

22 ‘‘(VI) any other information de23 termined appropriate by the Secretary. 

24 ‘‘(iii) PHARMACY ACCESS TO LIMITED

25 ACCESS DRUG INFORMATION.—For plan 

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1 years beginning with plan year 2026, upon 

2 the request of a network pharmacy, a PDP 

3 sponsor of a prescription drug plan shall 

4 provide such pharmacy, not later than 14 

5 days after receiving such request, with the 

6 information described in subclauses (I), 

7 (II), and (III) of clause (ii). 

8 ‘‘(iv) HHS ANNUAL REPORT ON LIM9 ITED ACCESS DRUGS.—Not later than De10 cember 31, 2028, and annually thereafter, 

11 the Secretary shall submit to the Committee 

12 on Finance of the Senate, and the Com13 mittee on Ways and Means and the Com14 mittee on Energy and Commerce of the 

15 House of Representatives a report on com16 pliance by PDP sponsors with the require17 ments under this subparagraph. Each such 

18 report shall include— 

19 ‘‘(I) a description of the patterns, 

20 trends, variations, and rationales for 

21 the designation by PDP sponsors of 

22 certain covered part D drugs as lim23 ited access drugs, and the implications 

24 of such designations on beneficiary ac25 cess to such covered part D drugs; 

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1 ‘‘(II) a description of the informa2 tion submitted to the Secretary under 

3 clause (ii) (in a manner that does not 

4 disclose the identity of a pharmacy, a 

5 PDP sponsor, a prescription drug 

6 plan, or pharmacy benefit manager, or 

7 any proprietary pricing information); 

8 and 

9 ‘‘(III) any other information de10 termined appropriate by the Secretary. 

11 ‘‘(v) LIMITED ACCESS DRUG DE12 FINED.—In this subparagraph, the term 

13 ‘limited access drug’ means a covered part 

14 D drug that meets at least one of the fol15 lowing: 

16 ‘‘(I) The Food and Drug Adminis17 tration has restricted distribution of 

18 such covered part D drug to certain fa19 cilities or physicians. 

20 ‘‘(II) The dispensing of such cov21 ered part D drug requires extraor22 dinary special handling, provider co23 ordination, or patient education that 

24 cannot be met by a network phar25 macy.’’. 

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1 ‘‘(vii) IMPLEMENTATION.—Notwith2 standing any other provision of law, the 

3 Secretary shall implement this subpara4 graph by program instruction or otherwise. 

5 ‘‘(viii) NONAPPLICATION OF PAPER6 WORK REDUCTION ACT.—Chapter 35 of title 

7 44, United States Code, shall not apply to 

8 any data collection undertaken by the Sec9 retary under this subparagraph.’’. 

10 SEC. 12. BENEFICIARY-FOCUSED LISTENING SESSIONS TO 

11 IMPROVE PRESCRIPTION DRUG PLAN TRANS12 PARENCY, ACCESS, AND CHOICE. 

13 Section 1860D–42 of the Social Security Act (42 

14 U.S.C. 1395w–152), as amended by section 7, is amended 

15 by adding at the end the following new subsection: 

16 ‘‘(f) BENEFICIARY-FOCUSED LISTENING SESSIONS TO

17 IMPROVE PRESCRIPTION DRUG PLAN TRANSPARENCY, AC18 CESS, AND CHOICE.— 

19 ‘‘(1) IN GENERAL.—Not later than December 31, 

20 2024, the Secretary shall hold at least one beneficiary21 focused listening session to receive input on potential 

22 improvements to the experience with, and trans23 parency of, prescription drug plans under this part, 

24 as described in paragraph (2). 

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1 ‘‘(2) BENEFICIARY-FOCUSED LISTENING SES2 SIONS.—Any beneficiary-focused listening session held 

3 under paragraph (1) shall be open to the public, in4 cluding beneficiaries, caregivers of beneficiaries, con5 sumer and patient advocacy organizations, health 

6 care providers, and other interested parties. Any such 

7 listening sessions may include an opportunity for the 

8 public to provide input to the Secretary on potential 

9 improvements to— 

10 ‘‘(A) the information made available by 

11 prescription drug plans to individuals; 

12 ‘‘(B) tools and mechanisms to assist enroll13 ees of prescription drug plans in navigating 

14 plan complaint systems, as well as the efficiency 

15 and effectiveness of such systems; 

16 ‘‘(C) tools and mechanisms to assist bene17 ficiaries in selecting a prescription drug plan; 

18 ‘‘(D) tools and mechanisms to assist enroll19 ees of prescription drug plans in navigating uti20 lization management requirements of such plans, 

21 such as step therapy and prior authorization; 

22 ‘‘(E) access to, and effectiveness and utiliza23 tion of, electronic real-time benefit tools (as de24 scribed in section 423.160(b)(7) of title 42, Code 

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1 tion) and beneficiary real-time benefit tools (as 

2 described in section 423.128(d)(4) of title 42, 

3 Code of Federal Regulations, or any successor 

4 regulation); 

5 ‘‘(F) formulary management and oversight 

6 by prescription drug plans; and 

7 ‘‘(G) other subjects, as determined appro8 priate by the Secretary.’’. 

9 SEC. 13. REPORTING ON ENFORCEMENT AND OVERSIGHT 

10 OF PHARMACY ACCESS REQUIREMENTS. 

11 Section 1860D–42 of the Social Security Act (42 

12 U.S.C. 1395w–152), as amended by section 12, is amended 

13 by adding at the end the following new subsection: 

14 ‘‘(g) BIENNIAL REPORT ON ENFORCEMENT AND OVER15 SIGHT OF PHARMACY ACCESS REQUIREMENTS.— 

16 ‘‘(1) IN GENERAL.—Not later than 2 years after 

17 the date of enactment of this subsection, and at least 

18 once every 2 years thereafter, the Secretary shall pub19 lish a report on enforcement and oversight actions 

20 and activities undertaken by the Secretary with re21 spect to the requirements under section 1860D– 

22 4(b)(1). 

23 ‘‘(2) LIMITATION.—A report under paragraph 

24 (1) shall not disclose— 

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1 ‘‘(A) identifiable information about individ2 uals or entities unless such information is other3 wise publicly available; or 

4 ‘‘(B) trade secrets with respect to any enti5 ties.’’. 

6 SEC. 14. GAO STUDY ON PRICE-RELATED COMPENSATION 

7 ACROSS THE SUPPLY CHAIN. 

8 Section 1860D–42 of the Social Security Act (42 

9 U.S.C. 1395w–152), as amended by section 13, is amended 

10 by adding at the end the following new subsection: 

11 ‘‘(h) GAO STUDY AND REPORT ON PRICE-RELATED

12 COMPENSATION AND PAYMENT STRUCTURES IN THE PRE13 SCRIPTION DRUG SUPPLY CHAIN.— 

14 ‘‘(1) STUDY.—The Comptroller General of the 

15 United States (in this subsection referred to as the 

16 ‘Comptroller General’) shall conduct a study describ17 ing the use of compensation and payment structures 

18 related to a prescription drug’s price within the retail 

19 prescription drug supply chain in this part. Such 

20 study shall summarize information from Federal 

21 agencies and industry experts, to the extent available, 

22 with respect to the following: 

23 ‘‘(A) The type, magnitude, other features 

24 (such as the pricing benchmarks used), and prev25 alence of compensation and payment structures 

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1 related to a prescription drug’s price, such as 

2 calculating fee amounts as a percentage of a pre3 scription drug’s price, between intermediaries in 

4 the prescription drug supply chain, including— 

5 ‘‘(i) pharmacy benefit managers; 

6 ‘‘(ii) part D plan sponsors; 

7 ‘‘(iii) drug wholesalers; 

8 ‘‘(iv) pharmacies; 

9 ‘‘(v) manufacturers; 

10 ‘‘(vi) pharmacy services administrative 

11 organizations; 

12 ‘‘(vii) brokers, auditors, consultants, 

13 and other entities that advise part D plan 

14 sponsors about pharmacy benefits or review 

15 part D plan sponsor contracts with phar16 macy benefit managers; and 

17 ‘‘(viii) other service providers that con18 tract with any of the entities described in 

19 clauses (i) through (vii) that may use price20 related compensation and payment struc21 tures, such as rebate aggregators (or other 

22 entities that negotiate or process price con23 cessions on behalf of pharmacy benefit man24 agers, plan sponsors, or pharmacies). 

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1 ‘‘(B) The primary business models and 

2 compensation structures for each category of 

3 intermediary described in subparagraph (A). 

4 ‘‘(C) Variation in price-related compensa5 tion structures between affiliated entities (such 

6 as entities with common ownership, either full or 

7 partial, and subsidiary relationships) and unaf8 filiated entities. 

9 ‘‘(D) Potential conflicts of interest among 

10 contracting entities related to the use of prescrip11 tion drug price-related compensation structures, 

12 such as the potential for fees or other payments 

13 set as a percentage of a prescription drug’s price 

14 to advantage formulary selection, distribution, or 

15 purchasing of prescription drugs with higher 

16 prices. 

17 ‘‘(E) Notable differences, if any, in the use 

18 and level of price-based compensation structures 

19 over time and between different market segments, 

20 such as under this part and the Medicaid pro21 gram under title XIX. 

22 ‘‘(F) The effects of drug price-related com23 pensation structures and alternative compensa24 tion structures on Federal health care programs 

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1 spect to cost-sharing, premiums, Federal outlays, 

2 biosimilar and generic drug adoption and utili3 zation, drug shortage risks, and the potential for 

4 fees set as a percentage of a drug’s price to ad5 vantage the formulary selection, distribution, or 

6 purchasing of drugs with higher prices. 

7 ‘‘(G) Other issues determined to be relevant 

8 and appropriate by the Comptroller General. 

9 ‘‘(2) REPORT.—Not later than 2 years after the 

10 date of enactment of this subsection, the Comptroller 

11 General shall submit to Congress a report containing 

12 the results of the study conducted under paragraph 

13 (1), together with recommendations for such legisla14 tion and administrative action as the Comptroller 

15 General determines appropriate.’’. 

16 SEC. 15. REPORTS ON INAPPROPRIATE PHARMACY REJEC17 TIONS. 

18 Section 1860D–42 of the Social Security Act (42 

19 U.S.C. 1395w–152), as amended by section 14, is amended 

20 by adding at the end the following new subsection: 

21 ‘‘(i) BIENNIAL REPORT ON EFFORTS TO ADDRESS IN22 APPROPRIATE PHARMACY REJECTIONS AND INAPPRO23 PRIATE COVERAGE DENIALS UNDER MEDICARE PART D.— 

24 ‘‘(1) IN GENERAL.—Not later than January 1, 

25 2026, and at least once every 4 years thereafter, the 

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1 Secretary, in consultation with the Office of the In2 spector General of the Department of Health and 

3 Human Services, shall post, on a publicly available 

4 website, a report related to preventing, identifying, or 

5 addressing inappropriate pharmacy rejections (as de6 fined in paragraph (2)(B)) and inappropriate cov7 erage denials (as defined in paragraph (2)(A)) under 

8 this part. Such reports shall include— 

9 ‘‘(A) a description of programs, reviews, or 

10 initiatives underway to prevent, identify, or ad11 dress such rejections and denials, in accordance 

12 with existing authorities; 

13 ‘‘(B) a summary of data collected or other 

14 information available with respect to such rejec15 tions and denials, including— 

16 ‘‘(i) standards (if any such standards 

17 have been adopted) used by the Secretary 

18 for identifying PDP sponsors and MA orga19 nizations with relatively high rates of such 

20 rejections or denials; and 

21 ‘‘(ii) notable longitudinal trends or 

22 other patterns, as determined appropriate 

23 by the Secretary; 

24 ‘‘(C) an overview of corrective actions taken 

25 and technical assistance provided by the SecVerDate Sep 11 2014 00:49 Dec 08, 2023 Jkt 049200 PO 00000 Frm 00134 Fmt 6652 Sfmt 6203 E:\BILLS\S2973.RS S2973
135 

•S 2973 RS

1 retary in response to violations of existing re2 quirements with respect to such rejections and 

3 denials; and 

4 ‘‘(D) a description of barriers, if any, pre5 venting the Secretary from taking administrative 

6 actions sufficient to identify and address such re7 jections and denials. 

8 ‘‘(2) DEFINITIONS.—For purposes of this sub9 section: 

10 ‘‘(A) INAPPROPRIATE COVERAGE DENIAL.— 

11 The term ‘inappropriate coverage denial’ means 

12 a denial of coverage of a covered part D drug 

13 claim that violates the requirements of this part. 

14 ‘‘(B) INAPPROPRIATE PHARMACY REJEC15 TIONS.—The term ‘inappropriate pharmacy re16 jection’ means a rejection of a covered part D 

17 drug claim that violates the requirements of this 

18 part, such as through the application of utiliza19 tion management requirements that the Sec20 retary has not approved.’’. 

21 SEC. 16. GAO STUDY ON DRUG SHORTAGES. 

22 Section 1860D–42 of the Social Security Act (42 

23 U.S.C. 1395w–152), as amended by section 15, is amended 

24 by adding at the end the following new subsection: 

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•S 2973 RS

1 ‘‘(j) GAO STUDY AND REPORT ON DRUG SHORT2 AGES.— 

3 ‘‘(1) STUDY.—The Comptroller General of the 

4 United States (in this subsection referred to as the 

5 ‘Comptroller General’) shall conduct a study on fac6 tors contributing to shortages of covered part D drugs 

7 across the outpatient prescription drug supply chain. 

8 Such study shall include analysis of— 

9 ‘‘(A) common features of and trends in cov10 ered part D drugs that have experienced at least 

11 1 shortage (as defined under section 506C of the 

12 Federal Food, Drug, and Cosmetic Act); 

13 ‘‘(B) patterns, trends, and variations in the 

14 duration of shortages experienced by covered part 

15 D drugs; 

16 ‘‘(C) patterns, trends, and variations in the 

17 proximate causes and other potential causes of 

18 shortages experienced by covered part D drugs; 

19 ‘‘(D) effects of such shortages on bene20 ficiaries enrolled in prescription drug plans 

21 under this part, including with respect to access 

22 to covered part D drugs and out-of-pocket costs; 

23 and 

24 ‘‘(E) other issues determined appropriate by 

25 the Comptroller General. 

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1 ‘‘(2) REPORT.—Not later than 2 years after the 

2 date of enactment of this subsection, the Comptroller 

3 General shall submit to Congress a report containing 

4 the results of the study conducted under paragraph 

5 (1), together with recommendations for such legisla6 tion and administrative action as the Comptroller 

7 General determines appropriate.’’. 

8 SEC. 17. REPORT ON BIOSIMILAR AND GENERIC ACCESS 

9 UNDER MEDICARE PART D. 

10 Section 1860D–42 of the Social Security Act (42 

11 U.S.C. 1395w–152), as amended by section 16, is amended 

12 by adding at the end the following new subsection: 

13 ‘‘(k) OIG REPORT ON BIOSIMILAR AND GENERIC AC14 CESS UNDER PART D.— 

15 ‘‘(1) STUDY.—The Office of the Inspector Gen16 eral of the Department of Health and Human Serv17 ices (referred to in this subsection as the ‘Office of the 

18 Inspector General’) shall conduct a study on bio19 similar and generic drug access and adoption under 

20 prescription drug plans offered under this part, in21 cluding with respect to barriers to increased adoption 

22 and utilization of lower-priced biosimilar and generic 

23 utilization, plan features that discourage or encourage 

24 the utilization of these products, and the gross and 

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1 net spending effects of policies that increased adoption 

2 of these products under this part. 

3 ‘‘(2) REPORT.—Not later than 1 year after the 

4 date of enactment of this subsection, the Office of the 

5 Inspector General shall publish a report on the study 

6 conducted under paragraph (1).’’. 

7 SEC. 18. MEDICARE IMPROVEMENT FUND. 

8 Section 1898(b)(1) of the Social Security Act (42 

9 U.S.C. 1395iii(b)(1)) is amended by striking ‘‘during and 

10 after fiscal year 2022, $180,000,000’’ and inserting the fol11 lowing: ‘‘during and after— 

12 ‘‘(A) fiscal year 2022, $180,000,000; and 

13 ‘‘(B) fiscal year 2028, $1,947,000,000’’. 

Calendar No. 266 

118TH CONGRESS 

1ST SESSION S. 2973 

[Report No. 118–122] 

A BILL 

To amend titles XVIII and XIX of the Social Secuand Medicaid programs, and for other purposes. pharmacy benefit managers under the Medicare rity Act to establish requirements relating to 

DECEMBER 7, 2023 

Reported with an amendment