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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2973 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  1st Session
                                S. 2973

 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

_______________________________________________________________________

                                 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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Modernizing and 
Ensuring PBM Accountability Act''.
    (b) Table of Contents.--The table of contents of 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.

SEC. 2. ARRANGEMENTS WITH PHARMACY BENEFIT MANAGERS WITH RESPECT TO 
              PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    (a) In General.--
            (1) Prescription drug plans.--Section 1860D-12 of the 
        Social Security Act (42 U.S.C. 1395w-112) is amended by adding 
        at the end the following new subsection:
    ``(h) Requirements Relating to Pharmacy Benefit Managers.--For plan 
years beginning on or after January 1, 2026:
            ``(1) Agreements with pharmacy benefit managers.--Each 
        contract entered into with a PDP sponsor under this part with 
        respect to a prescription drug plan offered by such sponsor 
        shall provide that any pharmacy benefit manager acting on 
        behalf of such sponsor has a written agreement with the PDP 
        sponsor under which the pharmacy benefit manager agrees to meet 
        the following requirements:
                    ``(A) No income other than bona fide service 
                fees.--
                            ``(i) In general.--The pharmacy benefit 
                        manager and any affiliate of such pharmacy 
                        benefit manager shall not derive any 
                        remuneration with respect to any services 
                        provided in connection with the utilization of 
                        covered part D drugs from any entity or 
                        individual other than bona fide service fees, 
                        subject to clauses (ii) and (iii).
                            ``(ii) Incentive payments.--For the 
                        purposes of this subsection, an incentive 
                        payment paid by a PDP sponsor to a pharmacy 
                        benefit manager that is performing services on 
                        behalf of such sponsor shall be deemed a `bona 
                        fide service fee' if such payment is a flat 
                        dollar amount, is consistent with fair market 
                        value, and is related to services actually 
                        performed by the pharmacy benefit manager or 
                        affiliate of such pharmacy benefit manager in 
                        connection with the utilization of covered part 
                        D drugs.
                            ``(iii) Clarification on rebates and 
                        discounts used to lower costs for covered part 
                        d drugs.--Rebates, discounts, and other price 
                        concessions received from manufacturers, even 
                        if such price concessions are calculated as a 
                        percentage of a drug's price, shall not be 
                        considered a violation of the requirements of 
                        clause (i) if they are fully passed through to 
                        a PDP sponsor and exclusively used to lower 
                        costs for prescription drugs under this part, 
                        including in cases where a PDP sponsor is 
                        acting as a pharmacy benefit manager on behalf 
                        of a prescription drug plan offered by such PDP 
                        sponsor.
                            ``(iv) Evaluation of remuneration 
                        arrangements.--Remuneration arrangements 
                        between pharmacy benefit managers or affiliates 
                        of such pharmacy benefit managers, as 
                        applicable, and other entities involved in the 
                        dispensing or utilization of covered part D 
                        drugs (including PDP sponsors, manufacturers, 
                        pharmacies, and other entities as determined 
                        appropriate by the Secretary) shall be subject 
                        to review by the Secretary and the Office of 
                        the Inspector General of the Department of 
                        Health and Human Services. The Secretary, in 
                        consultation with the Office of the Inspector 
                        General, shall evaluate whether remuneration 
                        under such arrangements is consistent with fair 
                        market value through reviews and assessments of 
                        such remuneration, as determined appropriate.
                    ``(B) Transparency regarding guarantees and cost 
                performance evaluations.--The pharmacy benefit manager 
                shall--
                            ``(i) define, interpret, and apply, in a 
                        fully transparent and consistent manner for 
                        purposes of calculating or otherwise evaluating 
                        pharmacy benefit manager performance against 
                        pricing guarantees or similar cost performance 
                        measurements related to rebates, discounts, 
                        price concessions, or net costs, terms such 
                        as--
                                    ``(I) `generic drug', in a manner 
                                consistent with the definition of the 
                                term under section 423.4 of title 42, 
                                Code of Federal Regulations, or a 
                                successor regulation;
                                    ``(II) `brand name drug', in a 
                                manner consistent with the definition 
                                of the term under section 423.4 of 
                                title 42, Code of Federal Regulations, 
                                or a successor regulation;
                                    ``(III) `specialty drug';
                                    ``(IV) `rebate'; and
                                    ``(V) `discount';
                            ``(ii) identify any drugs, claims, or price 
                        concessions excluded from any pricing guarantee 
                        or other cost performance calculation or 
                        evaluation in a clear and consistent manner; 
                        and
                            ``(iii) where a pricing guarantee or other 
                        cost performance measure is based on a pricing 
                        benchmark other than the wholesale acquisition 
                        cost (as defined in section 1847A(c)(6)(B)) of 
                        a drug, calculate and provide a wholesale 
                        acquisition cost-based equivalent to the 
                        pricing guarantee or other cost performance 
                        measure in the written agreement.
                    ``(C) Provision of information.--
                            ``(i) In general.--Not later than July 1 of 
                        each year, beginning in 2026, the pharmacy 
                        benefit manager shall submit to the PDP 
                        sponsor, and to the Secretary, a report, in 
                        accordance with this subparagraph, and shall 
                        make such report available to such sponsor at 
                        no cost to such sponsor in a format specified 
                        by the Secretary under paragraph (4). Each such 
                        report shall include, with respect to such PDP 
                        sponsor and each plan offered by such sponsor, 
                        the following information with respect to the 
                        previous plan year:
                                    ``(I) A list of all drugs covered 
                                by the plan that were dispensed 
                                including, with respect to each such 
                                drug--
                                            ``(aa) the brand name, 
                                        generic or non-proprietary 
                                        name, and National Drug Code;
                                            ``(bb) the number of plan 
                                        enrollees for whom the drug was 
                                        dispensed, the total number of 
                                        prescription claims for the 
                                        drug (including original 
                                        prescriptions and refills, 
                                        counted as separate claims), 
                                        and the total number of dosage 
                                        units of the drug dispensed;
                                            ``(cc) the number of 
                                        prescription claims described 
                                        in item (bb) by each type of 
                                        dispensing channel through 
                                        which the drug was dispensed, 
                                        including retail, mail order, 
                                        specialty pharmacy, long term 
                                        care pharmacy, home infusion 
                                        pharmacy, or other types of 
                                        pharmacies or providers;
                                            ``(dd) the average 
                                        wholesale acquisition cost, 
                                        listed as cost per day's 
                                        supply, cost per dosage unit, 
                                        and cost per typical course of 
                                        treatment (as applicable);
                                            ``(ee) the average 
                                        wholesale price for the drug, 
                                        listed as cost per day's 
                                        supply, cost per dosage unit, 
                                        and cost per typical course of 
                                        treatment (as applicable);
                                            ``(ff) the total out-of-
                                        pocket spending by plan 
                                        enrollees on such drug after 
                                        application of any benefits 
                                        under the plan, including plan 
                                        enrollee spending through 
                                        copayments, coinsurance, and 
                                        deductibles;
                                            ``(gg) total rebates paid 
                                        by the manufacturer on the drug 
                                        as reported under the Detailed 
                                        DIR Report (or any successor 
                                        report) submitted by such 
                                        sponsor to the Centers for 
                                        Medicare & Medicaid Services;
                                            ``(hh) all other direct or 
                                        indirect remuneration on the 
                                        drug as reported under the 
                                        Detailed DIR Report (or any 
                                        successor report) submitted by 
                                        such sponsor to the Centers for 
                                        Medicare & Medicaid Services;
                                            ``(ii) the average pharmacy 
                                        reimbursement amount paid by 
                                        the plan for the drug in the 
                                        aggregate and disaggregated by 
                                        dispensing channel identified 
                                        in item (cc);
                                            ``(jj) the average National 
                                        Average Drug Acquisition Cost 
                                        (NADAC) for retail community 
                                        pharmacies; and
                                            ``(kk) total manufacturer-
                                        derived revenue, inclusive of 
                                        bona fide service fees, 
                                        retained by the pharmacy 
                                        benefit manager and any 
                                        affiliate of such pharmacy 
                                        benefit manager attributable to 
                                        the drug.
                                    ``(II) In the case of a pharmacy 
                                benefit manager that has an affiliate 
                                that is a retail, mail order, or 
                                specialty pharmacy, with respect to 
                                drugs covered by such plan that were 
                                dispensed, the following information:
                                            ``(aa) The percentage of 
                                        total prescriptions that were 
                                        dispensed by pharmacies that 
                                        are an affiliate of the 
                                        pharmacy benefit manager for 
                                        each drug.
                                            ``(bb) The interquartile 
                                        range of the total combined 
                                        costs paid by the plan and plan 
                                        enrollees, per dosage unit, per 
                                        course of treatment, per 30-day 
                                        supply, and per 90-day supply 
                                        for each drug dispensed by 
                                        pharmacies that are not an 
                                        affiliate of the pharmacy 
                                        benefit manager and that are 
                                        included in the pharmacy 
                                        network of such plan.
                                            ``(cc) The interquartile 
                                        range of the total combined 
                                        costs paid by the plan and plan 
                                        enrollees, per dosage unit, per 
                                        course of treatment, per 30-day 
                                        supply, and per 90-day supply 
                                        for each drug dispensed by 
                                        pharmacies that are an 
                                        affiliate of the pharmacy 
                                        benefit manager and that are 
                                        included in the pharmacy 
                                        network of such plan.
                                            ``(dd) The lowest total 
                                        combined cost paid by the plan 
                                        and plan enrollees, per dosage 
                                        unit, per course of treatment, 
                                        per 30-day supply, and per 90-
                                        day supply, for each drug that 
                                        is available from any pharmacy 
                                        included in the pharmacy 
                                        network of such plan.
                                            ``(ee) The difference 
                                        between the average acquisition 
                                        cost of the affiliate, such as 
                                        a pharmacy or other entity that 
                                        acquires prescription drugs, 
                                        that initially acquires the 
                                        drug and the amount reported 
                                        under subclause (I)(jj) for 
                                        each drug.
                                            ``(ff) A list of covered 
                                        part D drugs subject to an 
                                        agreement with a covered entity 
                                        under section 340B of the 
                                        Public Health Service Act for 
                                        which the pharmacy benefit 
                                        manager or an affiliate of the 
                                        pharmacy benefit manager had a 
                                        contract or other arrangement 
                                        with such a covered entity in 
                                        the service area of such plan.
                                    ``(III) Where a drug approved under 
                                section 505(c) of the Federal Food, 
                                Drug, and Cosmetic Act (referred to in 
                                this subclause as the `listed drug') is 
                                covered by the plan, the following 
                                information:
                                            ``(aa) A list of currently 
                                        marketed generic drugs approved 
                                        under section 505(j) of the 
                                        Federal Food, Drug, and 
                                        Cosmetic Act pursuant to an 
                                        application that references 
                                        such listed drug that are not 
                                        covered by the plan, are 
                                        covered on the same formulary 
                                        tier or a formulary tier 
                                        typically associated with 
                                        higher cost-sharing than the 
                                        listed drug, or are subject to 
                                        utilization management that the 
                                        listed drug is not subject to.
                                            ``(bb) The estimated 
                                        average beneficiary cost-
                                        sharing under the plan for a 
                                        30-day supply of the listed 
                                        drug.
                                            ``(cc) Where a generic drug 
                                        listed under item (aa) is on a 
                                        formulary tier typically 
                                        associated with higher cost-
                                        sharing than the listed drug, 
                                        the estimated average cost-
                                        sharing that a beneficiary 
                                        would have paid for a 30-day 
                                        supply of each of the generic 
                                        drugs described in item (aa), 
                                        had the plan provided coverage 
                                        for such drugs on the same 
                                        formulary tier as the listed 
                                        drug.
                                            ``(dd) A written 
                                        justification for providing 
                                        more favorable coverage of the 
                                        listed drug than the generic 
                                        drugs described in item (aa).
                                            ``(ee) The number of 
                                        currently marketed generic 
                                        drugs approved under section 
                                        505(j) of the Federal Food, 
                                        Drug, and Cosmetic Act pursuant 
                                        to an application that 
                                        references such listed drug.
                                    ``(IV) Where a reference product 
                                (as defined in section 351(i) of the 
                                Public Health Service Act) is covered 
                                by the plan, the following information:
                                            ``(aa) A list of currently 
                                        marketed biosimilar biological 
                                        products licensed under section 
                                        351(k) of the Public Health 
                                        Service Act pursuant to an 
                                        application that refers to such 
                                        reference product that are not 
                                        covered by the plan, are 
                                        covered on the same formulary 
                                        tier or a formulary tier 
                                        typically associated with 
                                        higher cost-sharing than the 
                                        reference product, or are 
                                        subject to utilization 
                                        management that the reference 
                                        product is not subject to.
                                            ``(bb) The estimated 
                                        average beneficiary cost-
                                        sharing under the plan for a 
                                        30-day supply of the reference 
                                        product.
                                            ``(cc) Where a biosimilar 
                                        biological product listed under 
                                        item (aa) is on a formulary 
                                        tier typically associated with 
                                        higher cost-sharing than the 
                                        listed drug, the estimated 
                                        average cost-sharing that a 
                                        beneficiary would have paid for 
                                        a 30-day supply of each of the 
                                        biosimilar biological products 
                                        described in item (aa), had the 
                                        plan provided coverage for such 
                                        products on the same formulary 
                                        tier as the reference product.
                                            ``(dd) A written 
                                        justification for providing 
                                        more favorable coverage of the 
                                        reference product than the 
                                        biosimilar biological product 
                                        described in item (aa).
                                            ``(ee) The number of 
                                        currently marketed biosimilar 
                                        biological products licensed 
                                        under section 351(k) of the 
                                        Public Health Service Act, 
                                        pursuant to an application that 
                                        refers to such reference 
                                        product.
                                    ``(V) Total gross spending on 
                                covered part D drugs by the plan, not 
                                net of rebates, fees, discounts, or 
                                other direct or indirect remuneration.
                                    ``(VI) The total amount retained by 
                                the pharmacy benefit manager or an 
                                affiliate of such pharmacy benefit 
                                manager in revenue related to 
                                utilization of prescription drugs under 
                                that plan, inclusive of bona fide 
                                service fees.
                                    ``(VII) The total spending on 
                                covered part D drugs net of rebates, 
                                fees, discounts, or other direct and 
                                indirect remuneration by the plan.
                                    ``(VIII) An explanation of any 
                                benefit design parameters under such 
                                plan that encourage plan enrollees to 
                                fill prescriptions at pharmacies that 
                                are an affiliate of such pharmacy 
                                benefit manager, such as mail and 
                                specialty home delivery programs, and 
                                retail and mail auto-refill programs.
                                    ``(IX) A list of all brokers, 
                                consultants, advisors, and auditors 
                                that receive compensation from the 
                                pharmacy benefit manager or an 
                                affiliate of such pharmacy benefit 
                                manager for referrals, consulting, 
                                auditing, or other services offered to 
                                PDP sponsors related to pharmacy 
                                benefit management services.
                                    ``(X) A list of all affiliates of 
                                the pharmacy benefit manager.
                                    ``(XI) A summary document submitted 
                                in a standardized template developed by 
                                the Secretary that includes such 
                                information described in subclauses (I) 
                                through (X).
                            ``(ii) Written explanation of contracts or 
                        agreements with drug manufacturers.--
                                    ``(I) In general.--The pharmacy 
                                benefit manager shall, not later than 
                                30 days after the finalization of any 
                                contract or agreement between such 
                                pharmacy benefit manager or an 
                                affiliate of such pharmacy benefit 
                                manager and a drug manufacturer (or 
                                subsidiary, agent, or entity affiliated 
                                with such drug manufacturer) that makes 
                                rebates, discounts, payments, or other 
                                financial incentives related to one or 
                                more prescription drugs of the 
                                manufacturer directly or indirectly 
                                contingent upon coverage, formulary 
                                placement, or utilization management 
                                conditions on any other prescription 
                                drugs, submit to the PDP sponsor a 
                                written explanation of such contract or 
                                agreement.
                                    ``(II) Requirements.--A written 
                                explanation under subclause (I) shall--
                                            ``(aa) include the 
                                        manufacturer subject to the 
                                        contract or agreement, all 
                                        prescription drugs subject to 
                                        the contract or agreement and 
                                        the manufacturers of such 
                                        drugs, and a high-level 
                                        description of the terms of 
                                        such contract or agreement and 
                                        how such terms apply to such 
                                        drugs; and
                                            ``(bb) be certified by the 
                                        Chief Executive Officer, Chief 
                                        Financial Officer, or General 
                                        Counsel of such pharmacy 
                                        benefit manager, affiliate of 
                                        such pharmacy benefit manager, 
                                        or an individual delegated with 
                                        the authority to sign on behalf 
                                        of one of these officers, who 
                                        reports directly to the 
                                        officer.
                    ``(D) Audit rights.--
                            ``(i) In general.--Not less than once a 
                        year, at the request of the PDP sponsor, the 
                        pharmacy benefit manager shall allow for an 
                        audit of the pharmacy benefit manager to ensure 
                        compliance with all terms and conditions under 
                        the written agreement and the accuracy of 
                        information reported under subparagraph (C).
                            ``(ii) Auditor.--The PDP sponsor shall have 
                        the right to select an auditor. The pharmacy 
                        benefit manager shall not impose any 
                        limitations on the selection of such auditor.
                            ``(iii) Provision of information.--The 
                        pharmacy benefit manager shall make available 
                        to such auditor all records, data, contracts, 
                        and other information necessary to confirm the 
                        accuracy of information provided under 
                        subparagraph (C), subject to reasonable 
                        restrictions on how such information must be 
                        reported to prevent redisclosure of such 
                        information.
                            ``(iv) Timing.--The pharmacy benefit 
                        manager must provide information under clause 
                        (iii) and other information, data, and records 
                        relevant to the audit to such auditor within 6 
                        months of the initiation of the audit and 
                        respond to requests for additional information 
                        from such auditor within 30 days after the 
                        request for additional information.
                            ``(v) Information from affiliates.--The 
                        pharmacy benefit manager shall be responsible 
                        for providing to such auditor information 
                        required to be reported under subparagraph (C) 
                        that is owned or held by an affiliate of such 
                        pharmacy benefit manager.
                    ``(E) Enforcement.--The pharmacy benefit manager 
                shall--
                            ``(i) disgorge to a PDP sponsor (or, in a 
                        case where the PDP sponsor is an affiliate of 
                        such pharmacy benefit manager, to the 
                        Secretary) any payment, remuneration, or other 
                        amount received by the pharmacy benefit manager 
                        or an affiliate of such pharmacy benefit 
                        manager in violation of subparagraph (A) or the 
                        written agreement entered into with such 
                        sponsor under this part with respect to a 
                        prescription drug plan;
                            ``(ii) reimburse the PDP sponsor for any 
                        civil money penalty imposed on the PDP sponsor 
                        as a result of the failure of the pharmacy 
                        benefit manager to meet the requirements of 
                        this paragraph that are applicable to the 
                        pharmacy benefit manager under the agreement; 
                        and
                            ``(iii) be subject to punitive remedies for 
                        breach of contract for failure to comply with 
                        the requirements applicable under this 
                        paragraph.
            ``(2) Certification of compliance.--Each PDP sponsor shall 
        furnish to the Secretary (in a time and manner specified by the 
        Secretary) an annual certification of compliance with this 
        subsection, as well as such information as the Secretary 
        determines necessary to carry out this subsection.
            ``(3) Rule of construction.--Nothing in this subsection 
        shall be construed as prohibiting payments related to 
        reimbursement for ingredient costs to any entity that acquires 
        prescription drugs, such as a pharmacy or wholesaler.
            ``(4) Standard formats.--Not later than June 1, 2025, the 
        Secretary shall specify standard, machine-readable formats for 
        pharmacy benefit managers to submit annual reports required 
        under paragraph (1)(C)(i).
            ``(5) Confidentiality.--
                    ``(A) In general.--Information disclosed by a 
                pharmacy benefit manager or PDP sponsor under this 
                subsection that is not otherwise publicly available or 
                available for purchase shall not be disclosed by the 
                Secretary or a PDP sponsor receiving the information, 
                except that the Secretary may disclose the information 
                for the following purposes:
                            ``(i) As the Secretary determines necessary 
                        to carry out this part.
                            ``(ii) To permit the Comptroller General to 
                        review the information provided.
                            ``(iii) To permit the Director of the 
                        Congressional Budget Office to review the 
                        information provided.
                            ``(iv) To permit the Executive Director of 
                        the Medicare Payment Advisory Commission to 
                        review the information provided.
                            ``(v) To the Attorney General for the 
                        purposes of conducting oversight and 
                        enforcement under this title.
                            ``(vi) To the Inspector General of the 
                        Department of Health and Human Services in 
                        accordance with its authorities under the 
                        Inspector General Act of 1978 (section 406 of 
                        title 5, United States Code), and other 
                        applicable statutes.
                    ``(B) Restriction on use of information.--The 
                Secretary, the Comptroller General, the Director of the 
                Congressional Budget Office, and the Executive Director 
                of the Medicare Payment Advisory Commission shall not 
                report on or disclose information disclosed pursuant to 
                subparagraph (A) to the public in a manner that would 
                identify a specific pharmacy benefit manager, 
                affiliate, manufacturer or wholesaler, PDP sponsor, or 
                plan, or contract prices, rebates, discounts, or other 
                remuneration for specific drugs in a manner that may 
                allow the identification of specific contracting 
                parties.
            ``(6) Definitions.--For purposes of this subsection:
                    ``(A) Affiliate.--The term `affiliate' means any 
                entity that is owned by, controlled by, or related 
                under a common ownership structure with a pharmacy 
                benefit manager or PDP sponsor, or that acts as a 
                contractor or agent to such pharmacy benefit manager or 
                PDP sponsor, insofar as such contractor or agent 
                performs any of the functions described under 
                subparagraph (C).
                    ``(B) Bona fide service fee.--The term `bona fide 
                service fee' means a fee that is reflective of the fair 
                market value for a bona fide, itemized service actually 
                performed on behalf of an entity, that the entity would 
                otherwise perform (or contract for) in the absence of 
                the service arrangement and that are not passed on in 
                whole or in part to a client or customer, whether or 
                not the entity takes title to the drug. Such fee must 
                be a flat dollar amount and shall not be directly or 
                indirectly based on, or contingent upon--
                            ``(i) drug price, such as wholesale 
                        acquisition cost or drug benchmark price (such 
                        as average wholesale price);
                            ``(ii) discounts, rebates, fees, or other 
                        direct or indirect remuneration amounts with 
                        respect to covered part D drugs dispensed to 
                        enrollees in a prescription drug plan, except 
                        as permitted pursuant to paragraph (1)(A)(ii);
                            ``(iii) coverage or formulary placement 
                        decisions or the volume or value of any 
                        referrals or business generated between the 
                        parties to the arrangement; or
                            ``(iv) any other amounts or methodologies 
                        prohibited by the Secretary.
                    ``(C) Pharmacy benefit manager.--The term `pharmacy 
                benefit manager' means any person or entity that, 
                either directly or through an intermediary, acts as a 
                price negotiator or group purchaser on behalf of a PDP 
                sponsor or prescription drug plan, or manages the 
                prescription drug benefits provided by such sponsor or 
                plan, including the processing and payment of claims 
                for prescription drugs, the performance of drug 
                utilization review, the processing of drug prior 
                authorization requests, the adjudication of appeals or 
                grievances related to the prescription drug benefit, 
                contracting with network pharmacies, controlling the 
                cost of covered part D drugs, or the provision of 
                related services. Such term includes any person or 
                entity that carries out one or more of the activities 
                described in the preceding sentence, irrespective of 
                whether such person or entity calls itself a `pharmacy 
                benefit manager'.''.
            (2) MA-PD plans.--Section 1857(f)(3) of the Social Security 
        Act (42 U.S.C. 1395w-27(f)(3)) is amended by adding at the end 
        the following new subparagraph:
                    ``(F) Requirements relating to pharmacy benefit 
                managers.--For plan years beginning on or after January 
                1, 2026, section 1860D-12(h).''.
            (3) Funding.--
                    (A) Secretary.--In addition to amounts otherwise 
                available, there is appropriated to the Centers for 
                Medicare & Medicaid Services Program Management 
                Account, out of any money in the Treasury not otherwise 
                appropriated, $20,000,000 for fiscal year 2026, to 
                remain available until expended, to carry out the 
                amendments made by this subsection.
                    (B) OIG.--In addition to amounts otherwise 
                available, there is appropriated to the Inspector 
                General of the Department of Health and Human Services, 
                out of any money in the Treasury not otherwise 
                appropriated, $5,000,000 for fiscal year 2026, to 
                remain available until expended, to carry out the 
                amendments made by this subsection.
    (b) GAO Study and Report on Certain Reporting Requirements.--
            (1) Study.--The Comptroller General of the United States 
        (in this subsection referred to as the ``Comptroller General'') 
        shall conduct a study on Federal and State reporting 
        requirements for health plans and pharmacy benefit managers 
        related to the transparency of prescription drug costs and 
        prices. Such study shall include an analysis of the following:
                    (A) Federal statutory and regulatory reporting 
                requirements for health plans and pharmacy benefit 
                managers related to prescription drug costs and prices.
                    (B) Selected States' statutory and regulatory 
                reporting requirements for health plans and pharmacy 
                benefit managers related to prescription drug costs and 
                prices.
                    (C) The extent to which the statutory and 
                regulatory reporting requirements identified in 
                subparagraphs (A) and (B) overlap and conflict.
                    (D) The resources required by health plans and 
                pharmacy benefit managers to comply with the reporting 
                requirements described in subparagraphs (A) and (B).
                    (E) Other items determined appropriate by the 
                Comptroller General.
            (2) Report.--Not later than 2 years after the date on which 
        information is first required to be reported under section 
        1860D-12(h)(1)(C) of the Social Security Act, as added by 
        subsection (a)(1), the Comptroller General shall submit to 
        Congress a report containing the results of the study conducted 
        under paragraph (1), together with recommendations for 
        legislation and administrative actions that would streamline 
        and reduce the burden associated with the reporting 
        requirements for health plans and pharmacy benefit managers 
        described in paragraph (1).
    (c) MedPAC Reports on Agreements With Pharmacy Benefit Managers 
With Respect to Prescription Drug Plans and MA-PD Plans.--The Medicare 
Payment Advisory Commission shall submit to Congress the following 
reports:
            (1) Not later than March 31, 2027, a report regarding 
        agreements with pharmacy benefit managers with respect to 
        prescription drug plans and MA-PD plans. Such report shall 
        include--
                    (A) a description of trends and patterns, including 
                relevant averages, totals, and other figures for each 
                of the types of information submitted;
                    (B) an analysis of any differences in agreements 
                and their effects on plan enrollee out-of-pocket 
                spending and average pharmacy reimbursement, and any 
                other impacts; and
                    (C) any recommendations the Commission determines 
                appropriate.
            (2) Not later than March 31, 2029, a report describing any 
        changes with respect to the information described in paragraph 
        (1) over time, together with any recommendations the Commission 
        determines appropriate.

SEC. 3. ENSURING FAIR ASSESSMENT OF PHARMACY PERFORMANCE AND QUALITY 
              UNDER MEDICARE PART D.

    (a) Standardized Pharmacy Performance Measures.--Section 1860D-2 of 
the Social Security Act (42 U.S.C. 1395w-102) is amended by adding at 
the end the following new subsection:
    ``(f) Application of Standardized Pharmacy Performance Measures.--
            ``(1) Measures.--For plan years beginning on or after 
        January 1, 2025, a PDP sponsor offering a prescription drug 
        plan and an MA organization offering an MA-PD plan shall, for 
        purposes of incentive payments, price concessions, or any fees 
        or other remuneration paid or charged to a pharmacy based on 
        performance measures, only use measures that are--
                    ``(A) established or adopted by the Secretary under 
                paragraph (2) and included on the list described in 
                subparagraph (B) of such paragraph; and
                    ``(B) relevant to the performance of such pharmacy 
                based on the type of pharmacy (including retail, mail 
                order, specialty, long term care, and home infusion or 
                other types of pharmacies), drugs dispensed by such 
                pharmacy, and pharmacy services used to dispense and 
                manage drugs by such pharmacy.
            ``(2) Standardized pharmacy performance measures.--
                    ``(A) Measures.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of law, the Secretary shall 
                        establish (or adopt pursuant to clause (iii)) 
                        standardized pharmacy performance measures that 
                        may be used by a PDP sponsor offering a 
                        prescription drug plan and an MA organization 
                        offering an MA-PD plan for the purpose of 
                        determining incentive payments, price 
                        concessions, or fees or other remuneration 
                        described in paragraph (1).
                            ``(ii) Requirements.--The measures under 
                        clause (i) shall focus on pharmacy performance 
                        and quality of care based on the type of 
                        pharmacy, as determined by the Secretary. Such 
                        measures shall be evidence-based, feasible, 
                        appropriate and reasonable.
                            ``(iii) Adoption of measure.--In lieu of 
                        establishing some or all of the measures under 
                        this paragraph, the Secretary may adopt 
                        measures that are endorsed by one or more 
                        multi-stakeholder consensus organizations (such 
                        as the Pharmacy Quality Alliance), that has 
                        participation from pharmacies (including retail 
                        and specialty pharmacies not owned or 
                        affiliated with a plan, pharmacy benefit 
                        manager, or other pharmacy), health plans, 
                        pharmacy benefit managers, and the Centers for 
                        Medicare & Medicaid Services. Any measure 
                        adopted under this clause shall be deemed to 
                        meet the requirements under clause (ii).
                    ``(B) Maintenance of list.--
                            ``(i) In general.--The Secretary shall 
                        maintain, and publish on a publicly available 
                        internet website, a list of measures 
                        established or adopted under this paragraph. 
                        Such list shall initially be published no later 
                        than June 1, 2024.
                            ``(ii) Update.--The Secretary shall 
                        periodically evaluate measures, and how 
                        measures are applied by type of pharmacy and 
                        update the measures on the list under clause 
                        (i) so that such measures meet the requirements 
                        under subparagraph (A)(ii).
            ``(3) Nonapplication of paperwork reduction act.--Chapter 
        35 of title 44, United States Code, shall not apply to any data 
        collection undertaken by the Secretary under this 
        subsection.''.
    (b) Funding.--In addition to amounts otherwise available, there is 
appropriated to the Centers for Medicare & Medicaid Services Program 
Management Account, out of any money in the Treasury not otherwise 
appropriated, $4,000,000 for fiscal year 2025, to remain available 
until expended, to carry out the amendment made by subsection (a).

SEC. 4. PROMOTING TRANSPARENCY FOR PHARMACIES UNDER MEDICARE PART D.

    (a) Transparency for Pharmacies.--Section 1860D-2(f) of the Social 
Security Act (42 U.S.C. 1395w-102(f)), as added by section 3, is 
amended by adding at the end the following new paragraph:
            ``(4) Transparency for pharmacies.--
                    ``(A) In general.--For plan years beginning on or 
                after January 1, 2025, a PDP sponsor offering a 
                prescription drug plan and an MA organization offering 
                an MA-PD plan, with respect to payment made by such PDP 
                sponsor or such MA organization to a pharmacy for a 
                covered part D drug dispensed by such pharmacy during a 
                plan year, shall promptly furnish, upon paying a claim 
                for a covered part D drug from a pharmacy, to such 
                pharmacy information related to such claim, such as the 
                Network Reimbursement ID, fees, pharmacy price 
                concessions, discounts, incentives, or any other forms 
                of remuneration that affect payment and pricing of the 
                claim.
                    ``(B) Standardized format.--The PDP sponsor and the 
                MA organization shall furnish the information described 
                in subparagraph (A) in a standardized format (as 
                specified by the Secretary) that includes all fields 
                needed to price the claim for a covered part D drug 
                dispensed by such pharmacy.
                    ``(C) Availability of information to the 
                secretary.--A PDP sponsor offering a prescription drug 
                plan or an MA organization offering an MA-PD plan shall 
                make the information described in subparagraph (A) 
                available to the Secretary upon request.
                    ``(D) Implementation.--Notwithstanding any other 
                provision of law, the Secretary shall implement this 
                paragraph by program instruction or otherwise.''.
    (b) Funding.--In addition to amounts otherwise available, there is 
appropriated to the Centers for Medicare & Medicaid Services Program 
Management Account, out of any money in the Treasury not otherwise 
appropriated, $2,000,000 for fiscal year 2025, to remain available 
until expended, to carry out the amendment made by subsection (a).

SEC. 5. PREVENTING THE USE OF ABUSIVE SPREAD PRICING IN MEDICAID.

    (a) In General.--Section 1927(e) of the Social Security Act (42 
U.S.C. 1396r-8(e)) is amended by adding at the end the following:
            ``(6) Transparent prescription drug pass-through pricing 
        required.--A contract between the State and a pharmacy benefit 
        manager (referred to in this paragraph as a `PBM'), or a 
        contract between the State and a managed care entity or other 
        specified entity (as such terms are defined in section 
        1903(m)(9)(D) and collectively referred to in this paragraph as 
        the `entity') that includes provisions making the entity 
        responsible for coverage of covered outpatient drugs dispensed 
        to individuals enrolled with the entity, shall require that 
        payment for such drugs and related administrative services (as 
        applicable), including payments made by a PBM on behalf of the 
        State or entity, is based on a transparent prescription drug 
        pass-through pricing model under which--
                    ``(A) any payment made by the entity or the PBM (as 
                applicable) for such a drug--
                            ``(i) is limited to--
                                    ``(I) ingredient cost; and
                                    ``(II) a professional dispensing 
                                fee that is not less than the 
                                professional dispensing fee that the 
                                State plan or waiver would pay if the 
                                plan or waiver was making the payment 
                                directly;
                            ``(ii) is passed through in its entirety by 
                        the entity or PBM to the pharmacy or provider 
                        that dispenses the drug (and shall not be 
                        reduced or denied retroactively under post-
                        adjudication processes); and
                            ``(iii) is made in a manner that is 
                        consistent with sections 447.502, 447.512, 
                        447.514, and 447.518 of title 42, Code of 
                        Federal Regulations (or any successor 
                        regulation) as if such requirements applied 
                        directly to the entity or the PBM, except that 
                        any payment by the entity or the PBM for the 
                        ingredient cost of such drug purchased by a 
                        covered entity (as defined in subsection 
                        (a)(5)(B)) may exceed the actual acquisition 
                        cost (as defined in 447.502 of title 42, Code 
                        of Federal Regulations, or any successor 
                        regulation) for such drug if--
                                    ``(I) such drug was subject to an 
                                agreement under section 340B of the 
                                Public Health Service Act;
                                    ``(II) such payment for the 
                                ingredient cost of such drug does not 
                                exceed the maximum payment that would 
                                have been made by the entity or the PBM 
                                for the ingredient cost of such drug if 
                                such drug had not been purchased by 
                                such covered entity; and
                                    ``(III) such covered entity reports 
                                to the Secretary (in a form and manner 
                                specified by the Secretary), on an 
                                annual basis and with respect to 
                                payments for the ingredient costs of 
                                such drugs so purchased by such covered 
                                entity that are in excess of the actual 
                                acquisition costs for such drugs, the 
                                aggregate amount of such excess;
                    ``(B) payment to the entity or the PBM (as 
                applicable) for administrative services performed by 
                the entity or PBM is limited to the fair market value 
                of such services;
                    ``(C) the entity or the PBM (as applicable) shall 
                make available to the State, and the Secretary upon 
                request, all costs and payments related to covered 
                outpatient drugs and accompanying administrative 
                services incurred, received, or made by the entity or 
                the PBM, including ingredient costs, professional 
                dispensing fees, administrative fees, post-sale and 
                post-invoice fees, discounts, or related adjustments 
                such as direct and indirect remuneration fees, and any 
                and all other remuneration; and
                    ``(D) any form of spread pricing whereby any amount 
                charged or claimed by the entity or the PBM (as 
                applicable) that exceeds the amount paid to the 
                pharmacies or providers on behalf of the State or 
                entity, including any post-sale or post-invoice fees, 
                discounts, or related adjustments such as direct and 
                indirect remuneration fees or assessments (after 
                allowing for an administrative fee as described in 
                subparagraph (B)) is not allowable for purposes of 
                claiming Federal matching payments under this title.''.
    (b) Definition of Pharmacy Benefit Manager.--Section 1927(k) of the 
Social Security Act (42 U.S.C. 1396r-8(k)) is amended by adding at the 
end the following new paragraph:
            ``(12) Pharmacy benefit manager.--The term `pharmacy 
        benefit manager' means any person or entity that, either 
        directly or through an intermediary, acts as a price negotiator 
        or group purchaser on behalf of a State, managed care entity or 
        other specified entity (as such terms are defined in section 
        1903(m)(9)(D)), or manages the prescription drug benefits 
        provided by such State, managed care entity, or other specified 
        entity, including the processing and payment of claims for 
        prescription drugs, the performance of drug utilization review, 
        the processing of drug prior authorization requests, the 
        managing of appeals or grievances related to the prescription 
        drug benefits, contracting with pharmacies, controlling the 
        cost of covered outpatient drugs, or the provision of services 
        related thereto. Such term includes any person or entity that 
        carries out 1 or more of the activities described in the 
        preceding sentence, irrespective of whether such person or 
        entity calls itself a `pharmacy benefit manager'.''.
    (c) Conforming Amendments.--Section 1903(m) of such Act (42 U.S.C. 
1396b(m)) is amended--
            (1) in paragraph (2)(A)(xiii)--
                    (A) by striking ``and (III)'' and inserting 
                ``(III)'';
                    (B) by inserting before the period at the end the 
                following: ``, and (IV) if the entity, or a pharmacy 
                benefit manager acting on behalf of the entity under a 
                contract or other arrangement between the entity and 
                the pharmacy benefit manager, performs any of the 
                activities described in section 1927(k)(12), such 
                activities shall comply with the requirements of 
                section 1927(e)(6)''; and
                    (C) by moving the left margin 2 ems to the left; 
                and
            (2) by adding at the end the following new paragraph:
    ``(10) No payment shall be made under this title to a State with 
respect to expenditures incurred by the State for payment for services 
provided by an other specified entity (as defined in paragraph 
(9)(D)(iii)) unless such services are provided in accordance with a 
contract between the State and such entity which satisfies the 
requirements of paragraph (2)(A)(xiii).''.
    (d) Effective Date.--The amendments made by this section apply to 
contracts between States and managed care entities, other specified 
entities, or pharmacy benefit managers that have an effective date 
beginning on or after the date that is 18 months after the date of 
enactment of this Act.

SEC. 6. ENSURING ACCURATE PAYMENTS TO PHARMACIES UNDER MEDICAID.

    (a) In General.--Section 1927(f) of the Social Security Act (42 
U.S.C. 1396r-8(f)) is amended--
            (1) by striking ``and'' after the semicolon at the end of 
        paragraph (1)(A)(i) and all that precedes it through ``(1)'' 
        and inserting the following:
            ``(1) Determining pharmacy actual acquisition costs.--The 
        Secretary shall conduct a survey of retail community pharmacy 
        drug prices to determine the national average drug acquisition 
        cost as follows:
                    ``(A) Use of vendor.--The Secretary may contract 
                services for--
                            ``(i) with respect to retail community 
                        pharmacies, the determination of retail survey 
                        prices of the national average drug acquisition 
                        cost for covered outpatient drugs that 
                        represent a nationwide average of consumer 
                        purchase prices for such drugs, net of all 
                        discounts and rebates (to the extent any 
                        information with respect to such discounts and 
                        rebates is available) based on a monthly survey 
                        of such pharmacies; and'';
            (2) by adding at the end of paragraph (1) the following:
                    ``(F) Survey reporting.--In order to meet the 
                requirement of section 1902(a)(54), a State shall 
                require that any retail community pharmacy in the State 
                that receives any payment, reimbursement, 
                administrative fee, discount, or rebate related to the 
                dispensing of covered outpatient drugs to individuals 
                receiving benefits under this title, regardless of 
                whether such payment, reimbursement, administrative 
                fee, discount, or rebate is received from the State or 
                a managed care entity or other specified entity (as 
                such terms are defined in section 1903(m)(9)(D)) 
                directly or from a pharmacy benefit manager or another 
                entity that has a contract with the State or a managed 
                care entity or other specified entity (as so defined), 
                shall respond to surveys of retail prices conducted 
                under this paragraph.
                    ``(G) Survey information.--Information on national 
                drug acquisition prices obtained under this paragraph 
                shall be made publicly available and shall include at 
                least the following:
                            ``(i) The monthly response rate to the 
                        survey including a list of pharmacies not in 
                        compliance with subparagraph (F).
                            ``(ii) The sampling frame and number of 
                        pharmacies sampled monthly.
                            ``(iii) Information on price concessions to 
                        the pharmacy, including discounts, rebates, and 
                        other price concessions, to the extent that 
                        such information may be publicly released and 
                        has been collected by the Secretary as part of 
                        the survey.
                    ``(H) Penalties.--The Secretary may enforce non-
                compliance with this paragraph by a pharmacy through 
                the establishment of penalties or the suspension of 
                payments under this title, in full or in part, until 
                compliance with this paragraph has been completed.'';
            (3) in paragraph (2)--
                    (A) in subparagraph (A), by inserting ``, including 
                payment rates under Medicaid managed care entities or 
                other specified entities (as such terms are defined in 
                section 1903(m)(9)(D)),'' after ``under this title''; 
                and
                    (B) in subparagraph (B), by inserting ``and the 
                basis for such dispensing fees'' before the semicolon; 
                and
            (4) in paragraph (4), by inserting ``, and $5,000,000 for 
        fiscal year 2024 and each fiscal year thereafter,'' after 
        ``2010''.
    (b) Effective Date.--The amendments made by this section take 
effect on the first day of the first quarter that begins on or after 
the date that is 18 months after the date of enactment of this Act.

SEC. 7. OIG STUDY AND REPORT ON DRUG PRICE MARK-UPS IN MEDICARE PART D.

    Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152) 
is amended by adding at the end the following new subsection:
    ``(e) OIG Study and Report on Drug Price Mark-Ups Under This 
Part.--
            ``(1) Study.--The Inspector General of the Department of 
        Health and Human Services (in this subsection referred to as 
        the `Inspector General') shall conduct a study on the impact of 
        related party transactions within select vertically integrated 
        entities on the negotiated price (as defined in section 1860D-
        2(d)(1)(B)) paid by part D plan sponsors for covered part D 
        drugs. Such study may include an analysis of the following:
                    ``(A) Acquisition costs by the affiliate within 
                such vertically integrated entities that initially 
                acquires the prescription drug for a sample of covered 
                part D drugs, including at least 5 generic drugs, brand 
                drugs, specialty brand drugs, and specialty generic 
                drugs.
                    ``(B) The methodologies and negotiation processes 
                used to calculate transfer prices or other transactions 
                between related parties with respect to such covered 
                part D drugs.
                    ``(C) The impact of the transactions described in 
                subparagraph (B) on the negotiated price, net of direct 
                and indirect remuneration, for such covered part D 
                drugs.
                    ``(D) The margin captured by different affiliates 
                within such vertically integrated entities through the 
                transactions described in subparagraph (B).
                    ``(E) An assessment of the impact of the 
                transactions described in subparagraph (B) on costs to 
                individuals enrolled in a prescription drug plan or an 
                MA-PD plan and program spending on prescription drugs 
                under this part.
                    ``(F) Other issues determined to be relevant and 
                appropriate by the Inspector General.
            ``(2) Report.--Not later than 3 years after the date of 
        enactment of this subsection, the Inspector General shall 
        submit to the Committee on Finance of the Senate and the 
        Committee on Energy and Commerce and the Committee on Ways and 
        Means of the House of Representatives a report containing the 
        results of the study conducted under paragraph (1), together 
        with recommendations for such legislation and administrative 
        action as the Inspector General determines appropriate.
            ``(3) Funding.--In addition to amounts otherwise available, 
        there is appropriated to the Inspector General, out of any 
        money in the Treasury not otherwise appropriated, $5,200,000 
        for fiscal year 2024, to remain available until expended, to 
        carry out this subsection.''.

SEC. 8. RESOLVING P&T COMMITTEE CONFLICTS OF INTEREST.

    Section 1860D-4(b)(3)(A)(ii)(I) of the Social Security Act (42 
U.S.C. 1395w-104(b)(3)(A)(ii)(I)) is amended by inserting the following 
before the semicolon: ``(and, for 2025 and each subsequent year, any 
pharmacy benefit manager acting under contract with such sponsor 
offering such plan)''.

SEC. 9. ENHANCING PBM TRANSPARENCY REQUIREMENTS.

    (a) In General.--Section 1150A of the Social Security Act (42 
U.S.C. 1320b-23) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Provision of Information.--
            ``(1) In general.--The following entities shall provide the 
        information described in subsection (b) to the Secretary and, 
        in the case of an entity described in subparagraph (B) or an 
        affiliate of such entity described in subparagraph (C), to the 
        health benefits plan with which the entity is under contract, 
        at such times, and in such form and manner, as the Secretary 
        shall specify:
                    ``(A) A health benefits plan.
                    ``(B) Any entity that provides pharmacy benefits 
                management services on behalf of a health benefits plan 
                (in this section referred to as a `PBM') that manages 
                prescription drug coverage under a contract with--
                            ``(i) a PDP sponsor of a prescription drug 
                        plan or an MA organization offering an MA-PD 
                        plan under part D of title XVIII; or
                            ``(ii) a qualified health benefits plan 
                        offered through an exchange established by a 
                        State under section 1311 of the Patient 
                        Protection and Affordable Care Act.
                    ``(C) Any affiliate of an entity described in 
                subparagraph (B) that acts as a price negotiator or 
                group purchaser on behalf of such PBM, PDP sponsor, MA 
                organization, or qualified health benefits plan.
            ``(2) Affiliate defined.--In this section, the term 
        `affiliate' means any entity that is owned by, controlled by, 
        or related under a common ownership structure with a PBM 
        (including an entity owned or controlled by the PDP sponsor of 
        a prescription drug plan, MA organization offering an MA-PD 
        plan, or qualified health benefits plan for which such entity 
        is acting as a price negotiator or group purchaser).'';
            (2) in subsection (b)--
                    (A) in paragraph (2), by inserting ``and 
                percentage'' after ``and the aggregate amount''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(4) The amount (in the aggregate and disaggregated by 
        type) of all fees the PBM or an affiliate of the PBM receives 
        from all pharmaceutical manufacturers in connection with 
        patient utilization under the plan, and the amount and 
        percentage (in the aggregate and disaggregated by type) of such 
        fees that are passed through to the plan sponsor or issuer.''; 
        and
            (3) by adding at the end the following new subsection:
    ``(e) Annual Report.--The Secretary shall make publicly available 
on the internet website of the Centers for Medicare & Medicaid Services 
an annual report that summarizes the trends observed with respect to 
data reported under subsection (b).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan or contract years beginning on or after January 1, 2027.
    (c) Implementation.--Notwithstanding any other provision of law, 
the Secretary may implement the amendments made by this section by 
program instruction or otherwise.
    (d) Non-Application of the Paperwork Reduction Act.--Chapter 35 of 
title 44, United States Code (commonly referred to as the ``Paperwork 
Reduction Act of 1995''), shall not apply to the implementation of the 
amendments made by this section.

SEC. 10. FACILITATING MIDYEAR FORMULARY CHANGES FOR BIOSIMILARS.

    (a) In General.--Section 1860D-4(b) of the Social Security Act (42 
U.S.C. 1395w-104(b)) is amended by adding at the end the following new 
paragraph:
            ``(5) Mid-year changes in formularies permitted for certain 
        biosimilar biological products and the reference product of 
        such biosimilars.--If a PDP sponsor of a prescription drug plan 
        uses a formulary (including the use of tiered cost-sharing), 
        the following shall apply:
                    ``(A) In general.--For plan year 2025, and 
                subsequent plan years, in the case of a covered part D 
                drug that is the reference biological product (as 
                defined in section 351(i) of the Public Health Service 
                Act) with respect to a biosimilar biological product 
                (defined as a biological product licensed under section 
                351(k) of such Act), the PDP sponsor may, with respect 
                to a formulary, at any time after the first 60 days of 
                the plan year, subject to paragraph (3)(E), change the 
                preferred or tiered cost-sharing status of such 
                reference biological product if such PDP sponsor adds, 
                before or at the same time, to such formulary such 
                biosimilar biological product at the same or a higher 
                preferred status, or to the same or lower cost-sharing 
                tier, as that of such reference biological product 
                immediately prior to such change.
                    ``(B) Request for approval of change.--Prior to 
                making a change described in subparagraph (A), the PDP 
                sponsor shall submit to the Secretary a request to make 
                such change. If the Secretary approves the request or 
                has not provided a decision to the PDP sponsor 
                regarding such request within 30 days of receiving such 
                request, such PDP sponsor may make such change.''.
    (b) Administration.--
            (1) Implementation.--Notwithstanding any other provision of 
        law, the Secretary of Health and Human Services may implement 
        the amendment made by subsection (a) by program instruction or 
        otherwise.
            (2) Non-application of the paperwork reduction act.--
        Chapter 35 of title 44, United States Code (commonly referred 
        to as the ``Paperwork Reduction Act of 1995''), shall not apply 
        to the implementation of the amendment made by subsection (a).

SEC. 11. STRENGTHENING PHARMACY ACCESS FOR SENIORS.

    Section 1860D-4(b)(1) of the Social Security Act (42 U.S.C. 1395w-
104(b)(1)) is amended by adding at the end the following new 
subparagraph:
                    ``(F) Limited access drugs.--
                            ``(i) Limitation on restrictions or limits 
                        on access.--For each plan year (beginning with 
                        plan year 2026), a PDP sponsor offering a 
                        prescription drug plan--
                                    ``(I) may not restrict or limit 
                                access to any covered part D drug to a 
                                subset of their network pharmacies, 
                                other than with respect to a limited 
                                access drug, as defined in clause (v); 
                                and
                                    ``(II) shall document the rationale 
                                for why a covered part D drug meets the 
                                definition of a limited access drug 
                                under clause (v), if such plan 
                                restricts or limits access to a limited 
                                access drug to a subset of network 
                                pharmacies.
                            ``(ii) Annual submission of information to 
                        the secretary on limited access drugs.--For 
                        each plan year (beginning with plan year 2026), 
                        each PDP sponsor offering a prescription drug 
                        plan shall submit to the Secretary, at a time 
                        and in a manner specified by the Secretary, 
                        with respect to each prescription drug plan 
                        offered by the sponsor during such plan year--
                                    ``(I) a list of all covered part D 
                                drugs that the PDP sponsor designated 
                                as a limited access drug;
                                    ``(II) for each covered part D drug 
                                included in the list described in 
                                subclause (I), a written rationale for 
                                why such drug meets the definition of a 
                                limited access drug;
                                    ``(III) a summary of the 
                                requirements imposed on network 
                                pharmacies (including all accreditation 
                                requirements, if any) to ensure 
                                appropriate handling and dispensing of 
                                each covered part D drug included in 
                                the list described in subclause (I);
                                    ``(IV) the percentages of each 
                                covered part D drug included in the 
                                list described in subclause (I) that is 
                                dispensed through retail pharmacies, 
                                specialty pharmacies, mail order 
                                pharmacies, or other dispensing 
                                channels as defined by the PDP sponsor, 
                                respectively;
                                    ``(V) the annual percentage of each 
                                covered part D drug included in the 
                                list described in subclause (I) that is 
                                dispensed through a pharmacy that is 
                                affiliated with the plan or is an 
                                affiliate (as defined in section 1860D-
                                12(h)(4)(A)) of a pharmacy benefit 
                                manager acting on behalf of such 
                                sponsor or such plan; and
                                    ``(VI) any other information 
                                determined appropriate by the 
                                Secretary.
                            ``(iii) Pharmacy access to limited access 
                        drug information.--For plan years beginning 
                        with plan year 2026, upon the request of a 
                        network pharmacy, a PDP sponsor of a 
                        prescription drug plan shall provide such 
                        pharmacy, not later than 14 days after 
                        receiving such request, with the information 
                        described in subclauses (I), (II), and (III) of 
                        clause (ii).
                            ``(iv) HHS annual report on limited access 
                        drugs.--Not later than December 31, 2028, and 
                        annually thereafter, the Secretary shall submit 
                        to the Committee on Finance of the Senate, and 
                        the Committee on Ways and Means and the 
                        Committee on Energy and Commerce of the House 
                        of Representatives a report on compliance by 
                        PDP sponsors with the requirements under this 
                        subparagraph. Each such report shall include--
                                    ``(I) a description of the 
                                patterns, trends, variations, and 
                                rationales for the designation by PDP 
                                sponsors of certain covered part D 
                                drugs as limited access drugs, and the 
                                implications of such designations on 
                                beneficiary access to such covered part 
                                D drugs;
                                    ``(II) a description of the 
                                information submitted to the Secretary 
                                under clause (ii) (in a manner that 
                                does not disclose the identity of a 
                                pharmacy, a PDP sponsor, a prescription 
                                drug plan, or pharmacy benefit manager, 
                                or any proprietary pricing 
                                information); and
                                    ``(III) any other information 
                                determined appropriate by the 
                                Secretary.
                            ``(v) Limited access drug defined.--In this 
                        subparagraph, the term `limited access drug' 
                        means a covered part D drug that meets at least 
                        one of the following:
                                    ``(I) The Food and Drug 
                                Administration has restricted 
                                distribution of such covered part D 
                                drug to certain facilities or 
                                physicians.
                                    ``(II) The dispensing of such 
                                covered part D drug requires 
                                extraordinary special handling, 
                                provider coordination, or patient 
                                education that cannot be met by a 
                                network pharmacy.''.
                            ``(vii) Implementation.--Notwithstanding 
                        any other provision of law, the Secretary shall 
                        implement this subparagraph by program 
                        instruction or otherwise.
                            ``(viii) Nonapplication of paperwork 
                        reduction act.--Chapter 35 of title 44, United 
                        States Code, shall not apply to any data 
                        collection undertaken by the Secretary under 
                        this subparagraph.''.

SEC. 12. BENEFICIARY-FOCUSED LISTENING SESSIONS TO IMPROVE PRESCRIPTION 
              DRUG PLAN TRANSPARENCY, ACCESS, AND CHOICE.

    Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152), 
as amended by section 7, is amended by adding at the end the following 
new subsection:
    ``(f) Beneficiary-Focused Listening Sessions To Improve 
Prescription Drug Plan Transparency, Access, and Choice.--
            ``(1) In general.--Not later than December 31, 2024, the 
        Secretary shall hold at least one beneficiary-focused listening 
        session to receive input on potential improvements to the 
        experience with, and transparency of, prescription drug plans 
        under this part, as described in paragraph (2).
            ``(2) Beneficiary-focused listening sessions.--Any 
        beneficiary-focused listening session held under paragraph (1) 
        shall be open to the public, including beneficiaries, 
        caregivers of beneficiaries, consumer and patient advocacy 
        organizations, health care providers, and other interested 
        parties. Any such listening sessions may include an opportunity 
        for the public to provide input to the Secretary on potential 
        improvements to--
                    ``(A) the information made available by 
                prescription drug plans to individuals;
                    ``(B) tools and mechanisms to assist enrollees of 
                prescription drug plans in navigating plan complaint 
                systems, as well as the efficiency and effectiveness of 
                such systems;
                    ``(C) tools and mechanisms to assist beneficiaries 
                in selecting a prescription drug plan;
                    ``(D) tools and mechanisms to assist enrollees of 
                prescription drug plans in navigating utilization 
                management requirements of such plans, such as step 
                therapy and prior authorization;
                    ``(E) access to, and effectiveness and utilization 
                of, electronic real-time benefit tools (as described in 
                section 423.160(b)(7) of title 42, Code of Federal 
                Regulations, or any successor regulation) and 
                beneficiary real-time benefit tools (as described in 
                section 423.128(d)(4) of title 42, Code of Federal 
                Regulations, or any successor regulation);
                    ``(F) formulary management and oversight by 
                prescription drug plans; and
                    ``(G) other subjects, as determined appropriate by 
                the Secretary.''.

SEC. 13. REPORTING ON ENFORCEMENT AND OVERSIGHT OF PHARMACY ACCESS 
              REQUIREMENTS.

    Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152), 
as amended by section 12, is amended by adding at the end the following 
new subsection:
    ``(g) Biennial Report on Enforcement and Oversight of Pharmacy 
Access Requirements.--
            ``(1) In general.--Not later than 2 years after the date of 
        enactment of this subsection, and at least once every 2 years 
        thereafter, the Secretary shall publish a report on enforcement 
        and oversight actions and activities undertaken by the 
        Secretary with respect to the requirements under section 1860D-
        4(b)(1).
            ``(2) Limitation.--A report under paragraph (1) shall not 
        disclose--
                    ``(A) identifiable information about individuals or 
                entities unless such information is otherwise publicly 
                available; or
                    ``(B) trade secrets with respect to any 
                entities.''.

SEC. 14. GAO STUDY ON PRICE-RELATED COMPENSATION ACROSS THE SUPPLY 
              CHAIN.

    Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152), 
as amended by section 13, is amended by adding at the end the following 
new subsection:
    ``(h) GAO Study and Report on Price-Related Compensation and 
Payment Structures in the Prescription Drug Supply Chain.--
            ``(1) Study.--The Comptroller General of the United States 
        (in this subsection referred to as the `Comptroller General') 
        shall conduct a study describing the use of compensation and 
        payment structures related to a prescription drug's price 
        within the retail prescription drug supply chain in this part. 
        Such study shall summarize information from Federal agencies 
        and industry experts, to the extent available, with respect to 
        the following:
                    ``(A) The type, magnitude, other features (such as 
                the pricing benchmarks used), and prevalence of 
                compensation and payment structures related to a 
                prescription drug's price, such as calculating fee 
                amounts as a percentage of a prescription drug's price, 
                between intermediaries in the prescription drug supply 
                chain, including--
                            ``(i) pharmacy benefit managers;
                            ``(ii) part D plan sponsors;
                            ``(iii) drug wholesalers;
                            ``(iv) pharmacies;
                            ``(v) manufacturers;
                            ``(vi) pharmacy services administrative 
                        organizations;
                            ``(vii) brokers, auditors, consultants, and 
                        other entities that advise part D plan sponsors 
                        about pharmacy benefits or review part D plan 
                        sponsor contracts with pharmacy benefit 
                        managers; and
                            ``(viii) other service providers that 
                        contract with any of the entities described in 
                        clauses (i) through (vii) that may use price-
                        related compensation and payment structures, 
                        such as rebate aggregators (or other entities 
                        that negotiate or process price concessions on 
                        behalf of pharmacy benefit managers, plan 
                        sponsors, or pharmacies).
                    ``(B) The primary business models and compensation 
                structures for each category of intermediary described 
                in subparagraph (A).
                    ``(C) Variation in price-related compensation 
                structures between affiliated entities (such as 
                entities with common ownership, either full or partial, 
                and subsidiary relationships) and unaffiliated 
                entities.
                    ``(D) Potential conflicts of interest among 
                contracting entities related to the use of prescription 
                drug price-related compensation structures, such as the 
                potential for fees or other payments set as a 
                percentage of a prescription drug's price to advantage 
                formulary selection, distribution, or purchasing of 
                prescription drugs with higher prices.
                    ``(E) Notable differences, if any, in the use and 
                level of price-based compensation structures over time 
                and between different market segments, such as under 
                this part and the Medicaid program under title XIX.
                    ``(F) The effects of drug price-related 
                compensation structures and alternative compensation 
                structures on Federal health care programs and program 
                beneficiaries, including with respect to cost-sharing, 
                premiums, Federal outlays, biosimilar and generic drug 
                adoption and utilization, drug shortage risks, and the 
                potential for fees set as a percentage of a drug's 
                price to advantage the formulary selection, 
                distribution, or purchasing of drugs with higher 
                prices.
                    ``(G) Other issues determined to be relevant and 
                appropriate by the Comptroller General.
            ``(2) Report.--Not later than 2 years after the date of 
        enactment of this subsection, the Comptroller General shall 
        submit to Congress a report containing the results of the study 
        conducted under paragraph (1), together with recommendations 
        for such legislation and administrative action as the 
        Comptroller General determines appropriate.''.

SEC. 15. REPORTS ON INAPPROPRIATE PHARMACY REJECTIONS.

    Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152), 
as amended by section 14, is amended by adding at the end the following 
new subsection:
    ``(i) Biennial Report on Efforts To Address Inappropriate Pharmacy 
Rejections and Inappropriate Coverage Denials Under Medicare Part D.--
            ``(1) In general.--Not later than January 1, 2026, and at 
        least once every 4 years thereafter, the Secretary, in 
        consultation with the Office of the Inspector General of the 
        Department of Health and Human Services, shall post, on a 
        publicly available website, a report related to preventing, 
        identifying, or addressing inappropriate pharmacy rejections 
        (as defined in paragraph (2)(B)) and inappropriate coverage 
        denials (as defined in paragraph (2)(A)) under this part. Such 
        reports shall include--
                    ``(A) a description of programs, reviews, or 
                initiatives underway to prevent, identify, or address 
                such rejections and denials, in accordance with 
                existing authorities;
                    ``(B) a summary of data collected or other 
                information available with respect to such rejections 
                and denials, including--
                            ``(i) standards (if any such standards have 
                        been adopted) used by the Secretary for 
                        identifying PDP sponsors and MA organizations 
                        with relatively high rates of such rejections 
                        or denials; and
                            ``(ii) notable longitudinal trends or other 
                        patterns, as determined appropriate by the 
                        Secretary;
                    ``(C) an overview of corrective actions taken and 
                technical assistance provided by the Secretary in 
                response to violations of existing requirements with 
                respect to such rejections and denials; and
                    ``(D) a description of barriers, if any, preventing 
                the Secretary from taking administrative actions 
                sufficient to identify and address such rejections and 
                denials.
            ``(2) Definitions.--For purposes of this subsection:
                    ``(A) Inappropriate coverage denial.--The term 
                `inappropriate coverage denial' means a denial of 
                coverage of a covered part D drug claim that violates 
                the requirements of this part.
                    ``(B) Inappropriate pharmacy rejections.--The term 
                `inappropriate pharmacy rejection' means a rejection of 
                a covered part D drug claim that violates the 
                requirements of this part, such as through the 
                application of utilization management requirements that 
                the Secretary has not approved.''.

SEC. 16. GAO STUDY ON DRUG SHORTAGES.

    Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152), 
as amended by section 15, is amended by adding at the end the following 
new subsection:
    ``(j) GAO Study and Report on Drug Shortages.--
            ``(1) Study.--The Comptroller General of the United States 
        (in this subsection referred to as the `Comptroller General') 
        shall conduct a study on factors contributing to shortages of 
        covered part D drugs across the outpatient prescription drug 
        supply chain. Such study shall include analysis of--
                    ``(A) common features of and trends in covered part 
                D drugs that have experienced at least 1 shortage (as 
                defined under section 506C of the Federal Food, Drug, 
                and Cosmetic Act);
                    ``(B) patterns, trends, and variations in the 
                duration of shortages experienced by covered part D 
                drugs;
                    ``(C) patterns, trends, and variations in the 
                proximate causes and other potential causes of 
                shortages experienced by covered part D drugs;
                    ``(D) effects of such shortages on beneficiaries 
                enrolled in prescription drug plans under this part, 
                including with respect to access to covered part D 
                drugs and out-of-pocket costs; and
                    ``(E) other issues determined appropriate by the 
                Comptroller General.
            ``(2) Report.--Not later than 2 years after the date of 
        enactment of this subsection, the Comptroller General shall 
        submit to Congress a report containing the results of the study 
        conducted under paragraph (1), together with recommendations 
        for such legislation and administrative action as the 
        Comptroller General determines appropriate.''.

SEC. 17. REPORT ON BIOSIMILAR AND GENERIC ACCESS UNDER MEDICARE PART D.

    Section 1860D-42 of the Social Security Act (42 U.S.C. 1395w-152), 
as amended by section 16, is amended by adding at the end the following 
new subsection:
    ``(k) OIG Report on Biosimilar and Generic Access Under Part D.--
            ``(1) Study.--The Office of the Inspector General of the 
        Department of Health and Human Services (referred to in this 
        subsection as the `Office of the Inspector General') shall 
        conduct a study on biosimilar and generic drug access and 
        adoption under prescription drug plans offered under this part, 
        including with respect to barriers to increased adoption and 
        utilization of lower-priced biosimilar and generic utilization, 
        plan features that discourage or encourage the utilization of 
        these products, and the gross and net spending effects of 
        policies that increased adoption of these products under this 
        part.
            ``(2) Report.--Not later than 1 year after the date of 
        enactment of this subsection, the Office of the Inspector 
        General shall publish a report on the study conducted under 
        paragraph (1).''.

SEC. 18. MEDICARE IMPROVEMENT FUND.

    Section 1898(b)(1) of the Social Security Act (42 U.S.C. 
1395iii(b)(1)) is amended by striking ``during and after fiscal year 
2022, $180,000,000'' and inserting the following: ``during and after--
                    ``(A) fiscal year 2022, $180,000,000; and
                    ``(B) fiscal year 2028, $1,947,000,000''.
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