II 

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. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

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

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

7 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. 


tkelley on DSK125TN23PROD with BILLS
2 

•S 2973 IS

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. 

1 SEC. 2. ARRANGEMENTS WITH PHARMACY BENEFIT MAN2 AGERS WITH RESPECT TO PRESCRIPTION 

3 DRUG PLANS AND MA–PD PLANS. 

4 (a) IN GENERAL.— 

5 (1) PRESCRIPTION DRUG PLANS.—Section 

6 1860D–12 of the Social Security Act (42 U.S.C. 

7 1395w–112) is amended by adding at the end the 

8 following new subsection: 

9 ‘‘(h) REQUIREMENTS RELATING TO PHARMACY BEN10 EFIT MANAGERS.—For plan years beginning on or after 

11 January 1, 2026: 

12 ‘‘(1) AGREEMENTS WITH PHARMACY BENEFIT

13 MANAGERS.—Each contract entered into with a 

14 PDP sponsor under this part with respect to a pre15 scription drug plan offered by such sponsor shall 

16 provide that any pharmacy benefit manager acting 


tkelley on DSK125TN23PROD with BILLS
3 

•S 2973 IS

1 on behalf of such sponsor has a written agreement 

2 with the PDP sponsor under which the pharmacy 

3 benefit manager agrees to meet the following re4 quirements: 

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

6 SERVICE FEES.— 

7 ‘‘(i) IN GENERAL.—The pharmacy 

8 benefit manager and any affiliate of such 

9 pharmacy benefit manager shall not derive 

10 any remuneration with respect to any serv11 ices provided in connection with the utiliza12 tion of covered part D drugs from any en13 tity or individual other than bona fide serv14 ice fees, subject to clauses (ii) and (iii). 

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

16 purposes of this subsection, an incentive 

17 payment paid by a PDP sponsor to a phar18 macy benefit manager that is performing 

19 services on behalf of such sponsor shall be 

20 deemed a ‘bona fide service fee’ if such 

21 payment is a flat dollar amount, is con22 sistent with fair market value, and is re23 lated to services actually performed by the 

24 pharmacy benefit manager or affiliate of 

25 such pharmacy benefit manager in connecVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
4 

•S 2973 IS

1 tion with the utilization of covered part D 

2 drugs. 

3 ‘‘(iii) CLARIFICATION ON REBATES

4 AND DISCOUNTS USED TO LOWER COSTS

5 FOR COVERED PART D DRUGS.—Rebates, 

6 discounts, and other price concessions re7 ceived from manufacturers, even if such 

8 price concessions are calculated as a per9 centage of a drug’s price, shall not be con10 sidered a violation of the requirements of 

11 clause (i) if they are fully passed through 

12 to a PDP sponsor and exclusively used to 

13 lower costs for prescription drugs under 

14 this part, including in cases where a PDP 

15 sponsor is acting as a pharmacy benefit 

16 manager on behalf of a prescription drug 

17 plan offered by such PDP sponsor. 

18 ‘‘(iv) EVALUATION OF REMUNERATION

19 ARRANGEMENTS.—Remuneration arrange20 ments between pharmacy benefit managers 

21 or affiliates of such pharmacy benefit man22 agers, as applicable, and other entities in23 volved in the dispensing or utilization of 

24 covered part D drugs (including PDP 

25 sponsors, manufacturers, pharmacies, and 


tkelley on DSK125TN23PROD with BILLS
5 

•S 2973 IS

1 other entities as determined appropriate by 

2 the Secretary) shall be subject to review by 

3 the Secretary and the Office of the Inspec4 tor General of the Department of Health 

5 and Human Services. The Secretary, in 

6 consultation with the Office of the Inspec7 tor General, shall evaluate whether remu8 neration under such arrangements is con9 sistent with fair market value through re10 views and assessments of such remunera11 tion, as determined appropriate. 

12 ‘‘(B) TRANSPARENCY REGARDING GUARAN13 TEES AND COST PERFORMANCE EVALUA14 TIONS.—The pharmacy benefit manager shall— 

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

16 fully transparent and consistent manner 

17 for purposes of calculating or otherwise 

18 evaluating pharmacy benefit manager per19 formance against pricing guarantees or 

20 similar cost performance measurements re21 lated to rebates, discounts, price conces22 sions, or net costs, terms such as— 

23 ‘‘(I) ‘generic drug’, in a manner 

24 consistent with the definition of the 

25 term under section 423.4 of title 42, 


tkelley on DSK125TN23PROD with BILLS
6 

•S 2973 IS

1 Code of Federal Regulations, or a suc2 cessor regulation; 

3 ‘‘(II) ‘brand name drug’, in a 

4 manner consistent with the definition 

5 of the term under section 423.4 of 

6 title 42, Code of Federal Regulations, 

7 or a successor regulation; 

8 ‘‘(III) ‘specialty drug’; 

9 ‘‘(IV) ‘rebate’; and 

10 ‘‘(V) ‘discount’; 

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

12 price concessions excluded from any pric13 ing guarantee or other cost performance 

14 calculation or evaluation in a clear and 

15 consistent manner; and 

16 ‘‘(iii) where a pricing guarantee or 

17 other cost performance measure is based 

18 on a pricing benchmark other than the 

19 wholesale acquisition cost (as defined in 

20 section 1847A(c)(6)(B)) of a drug, cal21 culate and provide a wholesale acquisition 

22 cost-based equivalent to the pricing guar23 antee or other cost performance measure 

24 in the written agreement. 

25 ‘‘(C) PROVISION OF INFORMATION.— 


tkelley on DSK125TN23PROD with BILLS
7 

•S 2973 IS

1 ‘‘(i) IN GENERAL.—Not later than 

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

3 pharmacy benefit manager shall submit to 

4 the PDP sponsor, and to the Secretary, a 

5 report, in accordance with this subpara6 graph, and shall make such report avail7 able to such sponsor at no cost to such 

8 sponsor in a format specified by the Sec9 retary under paragraph (4). Each such re10 port shall include, with respect to such 

11 PDP sponsor and each plan offered by 

12 such sponsor, the following information 

13 with respect to the previous plan year: 

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

15 the plan that were dispensed includ16 ing, with respect to each such drug— 

17 ‘‘(aa) the brand name, ge18 neric or non-proprietary name, 

19 and National Drug Code; 

20 ‘‘(bb) the number of plan 

21 enrollees for whom the drug was 

22 dispensed, the total number of 

23 prescription claims for the drug 

24 (including original prescriptions 

25 and refills, counted as separate 


tkelley on DSK125TN23PROD with BILLS
8 

•S 2973 IS

1 claims), and the total number of 

2 dosage units of the drug dis3 pensed; 

4 ‘‘(cc) the number of pre5 scription claims described in item 

6 (bb) by each type of dispensing 

7 channel through which the drug 

8 was dispensed, including retail, 

9 mail order, specialty pharmacy, 

10 long term care pharmacy, home 

11 infusion pharmacy, or other types 

12 of pharmacies or providers; 

13 ‘‘(dd) the average wholesale 

14 acquisition cost, listed as cost per 

15 day’s supply, cost per dosage 

16 unit, and cost per typical course 

17 of treatment (as applicable); 

18 ‘‘(ee) the average wholesale 

19 price for the drug, listed as cost 

20 per day’s supply, cost per dosage 

21 unit, and cost per typical course 

22 of treatment (as applicable); 

23 ‘‘(ff) the total out-of-pocket 

24 spending by plan enrollees on 

25 such drug after application of 


tkelley on DSK125TN23PROD with BILLS
9 

•S 2973 IS

1 any benefits under the plan, in2 cluding plan enrollee spending 

3 through copayments, coinsurance, 

4 and deductibles; 

5 ‘‘(gg) total rebates paid by 

6 the manufacturer on the drug as 

7 reported under the Detailed DIR 

8 Report (or any successor report) 

9 submitted by such sponsor to the 

10 Centers for Medicare & Medicaid 

11 Services; 

12 ‘‘(hh) all other direct or in13 direct remuneration on the drug 

14 as reported under the Detailed 

15 DIR Report (or any successor re16 port) submitted by such sponsor 

17 to the Centers for Medicare & 

18 Medicaid Services; 

19 ‘‘(ii) the average pharmacy 

20 reimbursement amount paid by 

21 the plan for the drug in the ag22 gregate and disaggregated by dis23 pensing channel identified in item 

24 (cc); 


tkelley on DSK125TN23PROD with BILLS
10 

•S 2973 IS

1 ‘‘(jj) the average National 

2 Average Drug Acquisition Cost 

3 (NADAC) for retail community 

4 pharmacies; and 

5 ‘‘(kk) total manufacturer-de6 rived revenue, inclusive of bona 

7 fide service fees, retained by the 

8 pharmacy benefit manager and 

9 any affiliate of such pharmacy 

10 benefit manager attributable to 

11 the drug. 

12 ‘‘(II) In the case of a pharmacy 

13 benefit manager that has an affiliate 

14 that is a retail, mail order, or spe15 cialty pharmacy, with respect to drugs 

16 covered by such plan that were dis17 pensed, the following information: 

18 ‘‘(aa) The percentage of 

19 total prescriptions that were dis20 pensed by pharmacies that are an 

21 affiliate of the pharmacy benefit 

22 manager for each drug. 

23 ‘‘(bb) The interquartile 

24 range of the total combined costs 

25 paid by the plan and plan enrollVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
11 

•S 2973 IS

1 ees, per dosage unit, per course 

2 of treatment, per 30-day supply, 

3 and per 90-day supply for each 

4 drug dispensed by pharmacies 

5 that are not an affiliate of the 

6 pharmacy benefit manager and 

7 that are included in the phar8 macy network of such plan. 

9 ‘‘(cc) The interquartile 

10 range of the total combined costs 

11 paid by the plan and plan enroll12 ees, per dosage unit, per course 

13 of treatment, per 30-day supply, 

14 and per 90-day supply for each 

15 drug dispensed by pharmacies 

16 that are an affiliate of the phar17 macy benefit manager and that 

18 are included in the pharmacy 

19 network of such plan. 

20 ‘‘(dd) The lowest total com21 bined cost paid by the plan and 

22 plan enrollees, per dosage unit, 

23 per course of treatment, per 30- 

24 day supply, and per 90-day sup25 ply, for each drug that is availVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
12 

•S 2973 IS

1 able from any pharmacy included 

2 in the pharmacy network of such 

3 plan. 

4 ‘‘(ee) The difference between 

5 the average acquisition cost of 

6 the affiliate, such as a pharmacy 

7 or other entity that acquires pre8 scription drugs, that initially ac9 quires the drug and the amount 

10 reported under subclause (I)(jj) 

11 for each drug. 

12 ‘‘(ff) A list of covered part 

13 D drugs subject to an agreement 

14 with a covered entity under sec15 tion 340B of the Public Health 

16 Service Act for which the phar17 macy benefit manager or an affil18 iate of the pharmacy benefit 

19 manager had a contract or other 

20 arrangement with such a covered 

21 entity in the service area of such 

22 plan. 

23 ‘‘(III) Where a drug approved 

24 under section 505(c) of the Federal 

25 Food, Drug, and Cosmetic Act (reVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
13 

•S 2973 IS

1 ferred to in this subclause as the ‘list2 ed drug’) is covered by the plan, the 

3 following information: 

4 ‘‘(aa) A list of currently 

5 marketed generic drugs approved 

6 under section 505(j) of the Fed7 eral Food, Drug, and Cosmetic 

8 Act pursuant to an application 

9 that references such listed drug 

10 that are not covered by the plan, 

11 are covered on the same for12 mulary tier or a formulary tier 

13 typically associated with higher 

14 cost-sharing than the listed drug, 

15 or are subject to utilization man16 agement that the listed drug is 

17 not subject to. 

18 ‘‘(bb) The estimated average 

19 beneficiary cost-sharing under 

20 the plan for a 30-day supply of 

21 the listed drug. 

22 ‘‘(cc) Where a generic drug 

23 listed under item (aa) is on a for24 mulary tier typically associated 

25 with higher cost-sharing than the 


tkelley on DSK125TN23PROD with BILLS
14 

•S 2973 IS

1 listed drug, the estimated aver2 age cost-sharing that a bene3 ficiary would have paid for a 30- 

4 day supply of each of the generic 

5 drugs described in item (aa), had 

6 the plan provided coverage for 

7 such drugs on the same for8 mulary tier as the listed drug. 

9 ‘‘(dd) A written justification 

10 for providing more favorable cov11 erage of the listed drug than the 

12 generic drugs described in item 

13 (aa). 

14 ‘‘(ee) The number of cur15 rently marketed generic drugs 

16 approved under section 505(j) of 

17 the Federal Food, Drug, and 

18 Cosmetic Act pursuant to an ap19 plication that references such 

20 listed drug. 

21 ‘‘(IV) Where a reference product 

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

23 Public Health Service Act) is covered 

24 by the plan, the following information: 


tkelley on DSK125TN23PROD with BILLS
15 

•S 2973 IS

1 ‘‘(aa) A list of currently 

2 marketed biosimilar biological 

3 products licensed under section 

4 351(k) of the Public Health 

5 Service Act pursuant to an appli6 cation that refers to such ref7 erence product that are not cov8 ered by the plan, are covered on 

9 the same formulary tier or a for10 mulary tier typically associated 

11 with higher cost-sharing than the 

12 reference product, or are subject 

13 to utilization management that 

14 the reference product is not sub15 ject to. 

16 ‘‘(bb) The estimated average 

17 beneficiary cost-sharing under 

18 the plan for a 30-day supply of 

19 the reference product. 

20 ‘‘(cc) Where a biosimilar bi21 ological product listed under item 

22 (aa) is on a formulary tier typi23 cally associated with higher cost24 sharing than the listed drug, the 

25 estimated average cost-sharing 


tkelley on DSK125TN23PROD with BILLS
16 

•S 2973 IS

1 that a beneficiary would have 

2 paid for a 30-day supply of each 

3 of the biosimilar biological prod4 ucts described in item (aa), had 

5 the plan provided coverage for 

6 such products on the same for7 mulary tier as the reference prod8 uct. 

9 ‘‘(dd) A written justification 

10 for providing more favorable cov11 erage of the reference product 

12 than the biosimilar biological 

13 product described in item (aa). 

14 ‘‘(ee) The number of cur15 rently marketed biosimilar bio16 logical products licensed under 

17 section 351(k) of the Public 

18 Health Service Act, pursuant to 

19 an application that refers to such 

20 reference product. 

21 ‘‘(V) Total gross spending on 

22 covered part D drugs by the plan, not 

23 net of rebates, fees, discounts, or 

24 other direct or indirect remuneration. 


tkelley on DSK125TN23PROD with BILLS
17 

•S 2973 IS

1 ‘‘(VI) The total amount retained 

2 by the pharmacy benefit manager or 

3 an affiliate of such pharmacy benefit 

4 manager in revenue related to utiliza5 tion of prescription drugs under that 

6 plan, inclusive of bona fide service 

7 fees. 

8 ‘‘(VII) The total spending on cov9 ered part D drugs net of rebates, fees, 

10 discounts, or other direct and indirect 

11 remuneration by the plan. 

12 ‘‘(VIII) An explanation of any 

13 benefit design parameters under such 

14 plan that encourage plan enrollees to 

15 fill prescriptions at pharmacies that 

16 are an affiliate of such pharmacy ben17 efit manager, such as mail and spe18 cialty home delivery programs, and re19 tail and mail auto-refill programs. 

20 ‘‘(IX) A list of all brokers, con21 sultants, advisors, and auditors that 

22 receive compensation from the phar23 macy benefit manager or an affiliate 

24 of such pharmacy benefit manager for 

25 referrals, consulting, auditing, or 


tkelley on DSK125TN23PROD with BILLS
18 

•S 2973 IS

1 other services offered to PDP spon2 sors related to pharmacy benefit man3 agement services. 

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

5 pharmacy benefit manager. 

6 ‘‘(XI) A summary document sub7 mitted in a standardized template de8 veloped by the Secretary that includes 

9 such information described in sub10 clauses (I) through (X). 

11 ‘‘(ii) WRITTEN EXPLANATION OF CON12 TRACTS OR AGREEMENTS WITH DRUG

13 MANUFACTURERS.— 

14 ‘‘(I) IN GENERAL.—The phar15 macy benefit manager shall, not later 

16 than 30 days after the finalization of 

17 any contract or agreement between 

18 such pharmacy benefit manager or an 

19 affiliate of such pharmacy benefit 

20 manager and a drug manufacturer (or 

21 subsidiary, agent, or entity affiliated 

22 with such drug manufacturer) that 

23 makes rebates, discounts, payments, 

24 or other financial incentives related to 

25 one or more prescription drugs of the 


tkelley on DSK125TN23PROD with BILLS
19 

•S 2973 IS

1 manufacturer directly or indirectly 

2 contingent upon coverage, formulary 

3 placement, or utilization management 

4 conditions on any other prescription 

5 drugs, submit to the PDP sponsor a 

6 written explanation of such contract 

7 or agreement. 

8 ‘‘(II) REQUIREMENTS.—A writ9 ten explanation under subclause (I) 

10 shall— 

11 ‘‘(aa) include the manufac12 turer subject to the contract or 

13 agreement, all prescription drugs 

14 subject to the contract or agree15 ment and the manufacturers of 

16 such drugs, and a high-level de17 scription of the terms of such 

18 contract or agreement and how 

19 such terms apply to such drugs; 

20 and 

21 ‘‘(bb) be certified by the 

22 Chief Executive Officer, Chief Fi23 nancial Officer, or General Coun24 sel of such pharmacy benefit 

25 manager, affiliate of such pharVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
20 

•S 2973 IS

1 macy benefit manager, or an in2 dividual delegated with the au3 thority to sign on behalf of one of 

4 these officers, who reports di5 rectly to the officer. 

6 ‘‘(D) AUDIT RIGHTS.— 

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

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

9 the pharmacy benefit manager shall allow 

10 for an audit of the pharmacy benefit man11 ager to ensure compliance with all terms 

12 and conditions under the written agree13 ment and the accuracy of information re14 ported under subparagraph (C). 

15 ‘‘(ii) AUDITOR.—The PDP sponsor 

16 shall have the right to select an auditor. 

17 The pharmacy benefit manager shall not 

18 impose any limitations on the selection of 

19 such auditor. 

20 ‘‘(iii) PROVISION OF INFORMATION.— 

21 The pharmacy benefit manager shall make 

22 available to such auditor all records, data, 

23 contracts, and other information necessary 

24 to confirm the accuracy of information 

25 provided under subparagraph (C), subject 


tkelley on DSK125TN23PROD with BILLS
21 

•S 2973 IS

1 to reasonable restrictions on how such in2 formation must be reported to prevent re3 disclosure of such information. 

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

5 manager must provide information under 

6 clause (iii) and other information, data, 

7 and records relevant to the audit to such 

8 auditor within 6 months of the initiation of 

9 the audit and respond to requests for addi10 tional information from such auditor with11 in 30 days after the request for additional 

12 information. 

13 ‘‘(v) INFORMATION FROM AFFILI14 ATES.—The pharmacy benefit manager 

15 shall be responsible for providing to such 

16 auditor information required to be reported 

17 under subparagraph (C) that is owned or 

18 held by an affiliate of such pharmacy ben19 efit manager. 

20 ‘‘(E) ENFORCEMENT.—The pharmacy ben21 efit manager shall— 

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

23 a case where the PDP sponsor is an affil24 iate of such pharmacy benefit manager, to 

25 the Secretary) any payment, remuneration, 


tkelley on DSK125TN23PROD with BILLS
22 

•S 2973 IS

1 or other amount received by the pharmacy 

2 benefit manager or an affiliate of such 

3 pharmacy benefit manager in violation of 

4 subparagraph (A) or the written agreement 

5 entered into with such sponsor under this 

6 part with respect to a prescription drug 

7 plan; 

8 ‘‘(ii) reimburse the PDP sponsor for 

9 any civil money penalty imposed on the 

10 PDP sponsor as a result of the failure of 

11 the pharmacy benefit manager to meet the 

12 requirements of this paragraph that are 

13 applicable to the pharmacy benefit man14 ager under the agreement; and 

15 ‘‘(iii) be subject to punitive remedies 

16 for breach of contract for failure to comply 

17 with the requirements applicable under this 

18 paragraph. 

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

20 PDP sponsor shall furnish to the Secretary (in a 

21 time and manner specified by the Secretary) an an22 nual certification of compliance with this subsection, 

23 as well as such information as the Secretary deter24 mines necessary to carry out this subsection. 


tkelley on DSK125TN23PROD with BILLS
23 

•S 2973 IS

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

2 this subsection shall be construed as prohibiting pay3 ments related to reimbursement for ingredient costs 

4 to any entity that acquires prescription drugs, such 

5 as a pharmacy or wholesaler. 

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

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

8 machine-readable formats for pharmacy benefit 

9 managers to submit annual reports required under 

10 paragraph (1)(C)(i). 

11 ‘‘(5) CONFIDENTIALITY.— 

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

13 by a pharmacy benefit manager or PDP spon14 sor under this subsection that is not otherwise 

15 publicly available or available for purchase shall 

16 not be disclosed by the Secretary or a PDP 

17 sponsor receiving the information, except that 

18 the Secretary may disclose the information for 

19 the following purposes: 

20 ‘‘(i) As the Secretary determines nec21 essary to carry out this part. 

22 ‘‘(ii) To permit the Comptroller Gen23 eral to review the information provided. 


tkelley on DSK125TN23PROD with BILLS
24 

•S 2973 IS

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

2 Congressional Budget Office to review the 

3 information provided. 

4 ‘‘(iv) To permit the Executive Direc5 tor of the Medicare Payment Advisory 

6 Commission to review the information pro7 vided. 

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

9 purposes of conducting oversight and en10 forcement under this title. 

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

12 Department of Health and Human Serv13 ices in accordance with its authorities 

14 under the Inspector General Act of 1978 

15 (section 406 of title 5, United States 

16 Code), and other applicable statutes. 

17 ‘‘(B) RESTRICTION ON USE OF INFORMA18 TION.—The Secretary, the Comptroller General, 

19 the Director of the Congressional Budget Of20 fice, and the Executive Director of the Medicare 

21 Payment Advisory Commission shall not report 

22 on or disclose information disclosed pursuant to 

23 subparagraph (A) to the public in a manner 

24 that would identify a specific pharmacy benefit 

25 manager, affiliate, manufacturer or wholesaler, 


tkelley on DSK125TN23PROD with BILLS
25 

•S 2973 IS

1 PDP sponsor, or plan, or contract prices, re2 bates, discounts, or other remuneration for spe3 cific drugs in a manner that may allow the 

4 identification of specific contracting parties. 

5 ‘‘(6) DEFINITIONS.—For purposes of this sub6 section: 

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

8 means any entity that is owned by, controlled 

9 by, or related under a common ownership struc10 ture with a pharmacy benefit manager or PDP 

11 sponsor, or that acts as a contractor or agent 

12 to such pharmacy benefit manager or PDP 

13 sponsor, insofar as such contractor or agent 

14 performs any of the functions described under 

15 subparagraph (C). 

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

17 ‘bona fide service fee’ means a fee that is reflec18 tive of the fair market value for a bona fide, 

19 itemized service actually performed on behalf of 

20 an entity, that the entity would otherwise per21 form (or contract for) in the absence of the 

22 service arrangement and that are not passed on 

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

24 whether or not the entity takes title to the 

25 drug. Such fee must be a flat dollar amount 


tkelley on DSK125TN23PROD with BILLS
26 

•S 2973 IS

1 and shall not be directly or indirectly based on, 

2 or contingent upon— 

3 ‘‘(i) drug price, such as wholesale ac4 quisition cost or drug benchmark price 

5 (such as average wholesale price); 

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

7 direct or indirect remuneration amounts 

8 with respect to covered part D drugs dis9 pensed to enrollees in a prescription drug 

10 plan, except as permitted pursuant to 

11 paragraph (1)(A)(ii); 

12 ‘‘(iii) coverage or formulary placement 

13 decisions or the volume or value of any re14 ferrals or business generated between the 

15 parties to the arrangement; or 

16 ‘‘(iv) any other amounts or meth17 odologies prohibited by the Secretary. 

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

19 term ‘pharmacy benefit manager’ means any 

20 person or entity that, either directly or through 

21 an intermediary, acts as a price negotiator or 

22 group purchaser on behalf of a PDP sponsor or 

23 prescription drug plan, or manages the pre24 scription drug benefits provided by such spon25 sor or plan, including the processing and payVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
27 

•S 2973 IS

1 ment of claims for prescription drugs, the per2 formance of drug utilization review, the proc3 essing of drug prior authorization requests, the 

4 adjudication of appeals or grievances related to 

5 the prescription drug benefit, contracting with 

6 network pharmacies, controlling the cost of cov7 ered part D drugs, or the provision of related 

8 services. Such term includes any person or enti9 ty that carries out one or more of the activities 

10 described in the preceding sentence, irrespective 

11 of whether such person or entity calls itself a 

12 ‘pharmacy benefit manager’.’’. 

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

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

15 amended by adding at the end the following new 

16 subparagraph: 

17 ‘‘(F) REQUIREMENTS RELATING TO PHAR18 MACY BENEFIT MANAGERS.—For plan years be19 ginning on or after January 1, 2026, section 

20 1860D–12(h).’’. 

21 (3) FUNDING.— 

22 (A) SECRETARY.—In addition to amounts 

23 otherwise available, there is appropriated to the 

24 Centers for Medicare & Medicaid Services Pro25 gram Management Account, out of any money 


tkelley on DSK125TN23PROD with BILLS
28 

•S 2973 IS

1 in the Treasury not otherwise appropriated, 

2 $20,000,000 for fiscal year 2026, to remain 

3 available until expended, to carry out the 

4 amendments made by this subsection. 

5 (B) OIG.—In addition to amounts other6 wise available, there is appropriated to the In7 spector General of the Department of Health 

8 and Human Services, out of any money in the 

9 Treasury not otherwise appropriated, 

10 $5,000,000 for fiscal year 2026, to remain 

11 available until expended, to carry out the 

12 amendments made by this subsection. 

13 (b) GAO STUDY AND REPORT ON CERTAIN REPORT14 ING REQUIREMENTS.— 

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

16 United States (in this subsection referred to as the 

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

18 Federal and State reporting requirements for health 

19 plans and pharmacy benefit managers related to the 

20 transparency of prescription drug costs and prices. 

21 Such study shall include an analysis of the following: 

22 (A) Federal statutory and regulatory re23 porting requirements for health plans and phar24 macy benefit managers related to prescription 

25 drug costs and prices. 


tkelley on DSK125TN23PROD with BILLS
29 

•S 2973 IS

1 (B) Selected States’ statutory and regu2 latory reporting requirements for health plans 

3 and pharmacy benefit managers related to pre4 scription drug costs and prices. 

5 (C) The extent to which the statutory and 

6 regulatory reporting requirements identified in 

7 subparagraphs (A) and (B) overlap and con8 flict. 

9 (D) The resources required by health plans 

10 and pharmacy benefit managers to comply with 

11 the reporting requirements described in sub12 paragraphs (A) and (B). 

13 (E) Other items determined appropriate by 

14 the Comptroller General. 

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

16 date on which information is first required to be re17 ported under section 1860D–12(h)(1)(C) of the So18 cial Security Act, as added by subsection (a)(1), the 

19 Comptroller General shall submit to Congress a re20 port containing the results of the study conducted 

21 under paragraph (1), together with recommenda22 tions for legislation and administrative actions that 

23 would streamline and reduce the burden associated 

24 with the reporting requirements for health plans and 


tkelley on DSK125TN23PROD with BILLS
30 

•S 2973 IS

1 pharmacy benefit managers described in paragraph 

2 (1). 

3 (c) MEDPAC REPORTS ON AGREEMENTS WITH

4 PHARMACY BENEFIT MANAGERS WITH RESPECT TO PRE5 SCRIPTION DRUG PLANS AND MA–PD PLANS.—The 

6 Medicare Payment Advisory Commission shall submit to 

7 Congress the following reports: 

8 (1) Not later than March 31, 2027, a report re9 garding agreements with pharmacy benefit managers 

10 with respect to prescription drug plans and MA–PD 

11 plans. Such report shall include— 

12 (A) a description of trends and patterns, 

13 including relevant averages, totals, and other 

14 figures for each of the types of information sub15 mitted; 

16 (B) an analysis of any differences in agree17 ments and their effects on plan enrollee out-of18 pocket spending and average pharmacy reim19 bursement, and any other impacts; and 

20 (C) any recommendations the Commission 

21 determines appropriate. 

22 (2) Not later than March 31, 2029, a report de23 scribing any changes with respect to the information 

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


tkelley on DSK125TN23PROD with BILLS
31 

•S 2973 IS

1 any recommendations the Commission determines 

2 appropriate. 

3 SEC. 3. ENSURING FAIR ASSESSMENT OF PHARMACY PER4 FORMANCE AND QUALITY UNDER MEDICARE 

5 PART D. 

6 (a) STANDARDIZED PHARMACY PERFORMANCE

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

8 (42 U.S.C. 1395w–102) is amended by adding at the end 

9 the following new subsection: 

10 ‘‘(f) APPLICATION OF STANDARDIZED PHARMACY

11 PERFORMANCE MEASURES.— 

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

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

14 a prescription drug plan and an MA organization of15 fering an MA–PD plan shall, for purposes of incen16 tive payments, price concessions, or any fees or 

17 other remuneration paid or charged to a pharmacy 

18 based on performance measures, only use measures 

19 that are— 

20 ‘‘(A) established or adopted by the Sec21 retary under paragraph (2) and included on the 

22 list described in subparagraph (B) of such 

23 paragraph; and 

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

25 pharmacy based on the type of pharmacy (inVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
32 

•S 2973 IS

1 cluding retail, mail order, specialty, long term 

2 care, and home infusion or other types of phar3 macies), drugs dispensed by such pharmacy, 

4 and pharmacy services used to dispense and 

5 manage drugs by such pharmacy. 

6 ‘‘(2) STANDARDIZED PHARMACY PERFORMANCE

7 MEASURES.— 

8 ‘‘(A) MEASURES.— 

9 ‘‘(i) IN GENERAL.—Notwithstanding 

10 any other provision of law, the Secretary 

11 shall establish (or adopt pursuant to clause 

12 (iii)) standardized pharmacy performance 

13 measures that may be used by a PDP 

14 sponsor offering a prescription drug plan 

15 and an MA organization offering an MA– 

16 PD plan for the purpose of determining in17 centive payments, price concessions, or fees 

18 or other remuneration described in para19 graph (1). 

20 ‘‘(ii) REQUIREMENTS.—The measures 

21 under clause (i) shall focus on pharmacy 

22 performance and quality of care based on 

23 the type of pharmacy, as determined by 

24 the Secretary. Such measures shall be eviVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
33 

•S 2973 IS

1 dence-based, feasible, appropriate and rea2 sonable. 

3 ‘‘(iii) ADOPTION OF MEASURE.—In 

4 lieu of establishing some or all of the 

5 measures under this paragraph, the Sec6 retary may adopt measures that are en7 dorsed by one or more multi-stakeholder 

8 consensus organizations (such as the Phar9 macy Quality Alliance), that has participa10 tion from pharmacies (including retail and 

11 specialty pharmacies not owned or affili12 ated with a plan, pharmacy benefit man13 ager, or other pharmacy), health plans, 

14 pharmacy benefit managers, and the Cen15 ters for Medicare & Medicaid Services. Any 

16 measure adopted under this clause shall be 

17 deemed to meet the requirements under 

18 clause (ii). 

19 ‘‘(B) MAINTENANCE OF LIST.— 

20 ‘‘(i) IN GENERAL.—The Secretary 

21 shall maintain, and publish on a publicly 

22 available internet website, a list of meas23 ures established or adopted under this 

24 paragraph. Such list shall initially be pub25 lished no later than June 1, 2024. 


tkelley on DSK125TN23PROD with BILLS
34 

•S 2973 IS

1 ‘‘(ii) UPDATE.—The Secretary shall 

2 periodically evaluate measures, and how 

3 measures are applied by type of pharmacy 

4 and update the measures on the list under 

5 clause (i) so that such measures meet the 

6 requirements under subparagraph (A)(ii). 

7 ‘‘(3) NONAPPLICATION OF PAPERWORK REDUC8 TION ACT.—Chapter 35 of title 44, United States 

9 Code, shall not apply to any data collection under10 taken by the Secretary under this subsection.’’. 

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

12 available, there is appropriated to the Centers for Medi13 care & Medicaid Services Program Management Account, 

14 out of any money in the Treasury not otherwise appro15 priated, $4,000,000 for fiscal year 2025, to remain avail16 able until expended, to carry out the amendment made 

17 by subsection (a). 

18 SEC. 4. PROMOTING TRANSPARENCY FOR PHARMACIES 

19 UNDER MEDICARE PART D. 

20 (a) TRANSPARENCY FOR PHARMACIES.—Section 

21 1860D–2(f) of the Social Security Act (42 U.S.C. 1395w– 

22 102(f)), as added by section 3, is amended by adding at 

23 the end the following new paragraph: 

24 ‘‘(4) TRANSPARENCY FOR PHARMACIES.— 


tkelley on DSK125TN23PROD with BILLS
35 

•S 2973 IS

1 ‘‘(A) IN GENERAL.—For plan years begin2 ning on or after January 1, 2025, a PDP spon3 sor offering a prescription drug plan and an 

4 MA organization offering an MA–PD plan, with 

5 respect to payment made by such PDP sponsor 

6 or such MA organization to a pharmacy for a 

7 covered part D drug dispensed by such phar8 macy during a plan year, shall promptly fur9 nish, upon paying a claim for a covered part D 

10 drug from a pharmacy, to such pharmacy infor11 mation related to such claim, such as the Net12 work Reimbursement ID, fees, pharmacy price 

13 concessions, discounts, incentives, or any other 

14 forms of remuneration that affect payment and 

15 pricing of the claim. 

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

17 sponsor and the MA organization shall furnish 

18 the information described in subparagraph (A) 

19 in a standardized format (as specified by the 

20 Secretary) that includes all fields needed to 

21 price the claim for a covered part D drug dis22 pensed by such pharmacy. 

23 ‘‘(C) AVAILABILITY OF INFORMATION TO

24 THE SECRETARY.—A PDP sponsor offering a 

25 prescription drug plan or an MA organization 


tkelley on DSK125TN23PROD with BILLS
36 

•S 2973 IS

1 offering an MA–PD plan shall make the infor2 mation described in subparagraph (A) available 

3 to the Secretary upon request. 

4 ‘‘(D) IMPLEMENTATION.—Notwithstanding 

5 any other provision of law, the Secretary shall 

6 implement this paragraph by program instruc7 tion or otherwise.’’. 

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

9 available, there is appropriated to the Centers for Medi10 care & Medicaid Services Program Management Account, 

11 out of any money in the Treasury not otherwise appro12 priated, $2,000,000 for fiscal year 2025, to remain avail13 able until expended, to carry out the amendment made 

14 by subsection (a). 

15 SEC. 5. PREVENTING THE USE OF ABUSIVE SPREAD PRIC16 ING IN MEDICAID. 

17 (a) IN GENERAL.—Section 1927(e) of the Social Se18 curity Act (42 U.S.C. 1396r–8(e)) is amended by adding 

19 at the end the following: 

20 ‘‘(6) TRANSPARENT PRESCRIPTION DRUG PASS21 THROUGH PRICING REQUIRED.—A contract between 

22 the State and a pharmacy benefit manager (referred 

23 to in this paragraph as a ‘PBM’), or a contract be24 tween the State and a managed care entity or other 

25 specified entity (as such terms are defined in section 


tkelley on DSK125TN23PROD with BILLS
37 

•S 2973 IS

1 1903(m)(9)(D) and collectively referred to in this 

2 paragraph as the ‘entity’) that includes provisions 

3 making the entity responsible for coverage of covered 

4 outpatient drugs dispensed to individuals enrolled 

5 with the entity, shall require that payment for such 

6 drugs and related administrative services (as appli7 cable), including payments made by a PBM on be8 half of the State or entity, is based on a transparent 

9 prescription drug pass-through pricing model under 

10 which— 

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

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

13 ‘‘(i) is limited to— 

14 ‘‘(I) ingredient cost; and 

15 ‘‘(II) a professional dispensing 

16 fee that is not less than the profes17 sional dispensing fee that the State 

18 plan or waiver would pay if the plan 

19 or waiver was making the payment di20 rectly; 

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

22 by the entity or PBM to the pharmacy or 

23 provider that dispenses the drug (and shall 

24 not be reduced or denied retroactively 

25 under post-adjudication processes); and 


tkelley on DSK125TN23PROD with BILLS
38 

•S 2973 IS

1 ‘‘(iii) is made in a manner that is con2 sistent with sections 447.502, 447.512, 

3 447.514, and 447.518 of title 42, Code of 

4 Federal Regulations (or any successor reg5 ulation) as if such requirements applied di6 rectly to the entity or the PBM, except 

7 that any payment by the entity or the 

8 PBM for the ingredient cost of such drug 

9 purchased by a covered entity (as defined 

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

11 actual acquisition cost (as defined in 

12 447.502 of title 42, Code of Federal Regu13 lations, or any successor regulation) for 

14 such drug if— 

15 ‘‘(I) such drug was subject to an 

16 agreement under section 340B of the 

17 Public Health Service Act; 

18 ‘‘(II) such payment for the ingre19 dient cost of such drug does not ex20 ceed the maximum payment that 

21 would have been made by the entity or 

22 the PBM for the ingredient cost of 

23 such drug if such drug had not been 

24 purchased by such covered entity; and 


tkelley on DSK125TN23PROD with BILLS
39 

•S 2973 IS

1 ‘‘(III) such covered entity reports 

2 to the Secretary (in a form and man3 ner specified by the Secretary), on an 

4 annual basis and with respect to pay5 ments for the ingredient costs of such 

6 drugs so purchased by such covered 

7 entity that are in excess of the actual 

8 acquisition costs for such drugs, the 

9 aggregate amount of such excess; 

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

11 (as applicable) for administrative services per12 formed by the entity or PBM is limited to the 

13 fair market value of such services; 

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

15 shall make available to the State, and the Sec16 retary upon request, all costs and payments re17 lated to covered outpatient drugs and accom18 panying administrative services incurred, re19 ceived, or made by the entity or the PBM, in20 cluding ingredient costs, professional dispensing 

21 fees, administrative fees, post-sale and post-in22 voice fees, discounts, or related adjustments 

23 such as direct and indirect remuneration fees, 

24 and any and all other remuneration; and 


tkelley on DSK125TN23PROD with BILLS
40 

•S 2973 IS

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

2 any amount charged or claimed by the entity or 

3 the PBM (as applicable) that exceeds the 

4 amount paid to the pharmacies or providers on 

5 behalf of the State or entity, including any 

6 post-sale or post-invoice fees, discounts, or re7 lated adjustments such as direct and indirect 

8 remuneration fees or assessments (after allow9 ing for an administrative fee as described in 

10 subparagraph (B)) is not allowable for purposes 

11 of claiming Federal matching payments under 

12 this title.’’. 

13 (b) DEFINITION OF PHARMACY BENEFIT MAN14 AGER.—Section 1927(k) of the Social Security Act (42 

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

16 following new paragraph: 

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

18 term ‘pharmacy benefit manager’ means any person 

19 or entity that, either directly or through an inter20 mediary, acts as a price negotiator or group pur21 chaser on behalf of a State, managed care entity or 

22 other specified entity (as such terms are defined in 

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

24 drug benefits provided by such State, managed care 

25 entity, or other specified entity, including the procVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
41 

•S 2973 IS

1 essing and payment of claims for prescription drugs, 

2 the performance of drug utilization review, the proc3 essing of drug prior authorization requests, the man4 aging of appeals or grievances related to the pre5 scription drug benefits, contracting with pharmacies, 

6 controlling the cost of covered outpatient drugs, or 

7 the provision of services related thereto. Such term 

8 includes any person or entity that carries out 1 or 

9 more of the activities described in the preceding sen10 tence, irrespective of whether such person or entity 

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

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

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

14 (1) in paragraph (2)(A)(xiii)— 

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

16 ‘‘(III)’’; 

17 (B) by inserting before the period at the 

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

19 a pharmacy benefit manager acting on behalf of 

20 the entity under a contract or other arrange21 ment between the entity and the pharmacy ben22 efit manager, performs any of the activities de23 scribed in section 1927(k)(12), such activities 

24 shall comply with the requirements of section 

25 1927(e)(6)’’; and 


tkelley on DSK125TN23PROD with BILLS
42 

•S 2973 IS

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

2 left; and 

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

4 paragraph: 

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

6 a State with respect to expenditures incurred by the State 

7 for payment for services provided by an other specified 

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

9 services are provided in accordance with a contract be10 tween the State and such entity which satisfies the re11 quirements of paragraph (2)(A)(xiii).’’. 

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

13 this section apply to contracts between States and man14 aged care entities, other specified entities, or pharmacy 

15 benefit managers that have an effective date beginning on 

16 or after the date that is 18 months after the date of enact17 ment of this Act. 

18 SEC. 6. ENSURING ACCURATE PAYMENTS TO PHARMACIES 

19 UNDER MEDICAID. 

20 (a) IN GENERAL.—Section 1927(f) of the Social Se21 curity Act (42 U.S.C. 1396r–8(f)) is amended— 

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

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

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


tkelley on DSK125TN23PROD with BILLS
43 

•S 2973 IS

1 ‘‘(1) DETERMINING PHARMACY ACTUAL ACQUI2 SITION COSTS.—The Secretary shall conduct a sur3 vey of retail community pharmacy drug prices to de4 termine the national average drug acquisition cost as 

5 follows: 

6 ‘‘(A) USE OF VENDOR.—The Secretary 

7 may contract services for— 

8 ‘‘(i) with respect to retail community 

9 pharmacies, the determination of retail 

10 survey prices of the national average drug 

11 acquisition cost for covered outpatient 

12 drugs that represent a nationwide average 

13 of consumer purchase prices for such 

14 drugs, net of all discounts and rebates (to 

15 the extent any information with respect to 

16 such discounts and rebates is available) 

17 based on a monthly survey of such phar18 macies; and’’; 

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

20 following: 

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

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

23 State shall require that any retail community 

24 pharmacy in the State that receives any pay25 ment, reimbursement, administrative fee, disVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
44 

•S 2973 IS

1 count, or rebate related to the dispensing of 

2 covered outpatient drugs to individuals receiv3 ing benefits under this title, regardless of 

4 whether such payment, reimbursement, admin5 istrative fee, discount, or rebate is received 

6 from the State or a managed care entity or 

7 other specified entity (as such terms are defined 

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

9 pharmacy benefit manager or another entity 

10 that has a contract with the State or a man11 aged care entity or other specified entity (as so 

12 defined), shall respond to surveys of retail 

13 prices conducted under this paragraph. 

14 ‘‘(G) SURVEY INFORMATION.—Information 

15 on national drug acquisition prices obtained 

16 under this paragraph shall be made publicly 

17 available and shall include at least the fol18 lowing: 

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

20 survey including a list of pharmacies not in 

21 compliance with subparagraph (F). 

22 ‘‘(ii) The sampling frame and number 

23 of pharmacies sampled monthly. 

24 ‘‘(iii) Information on price concessions 

25 to the pharmacy, including discounts, reVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
45 

•S 2973 IS

1 bates, and other price concessions, to the 

2 extent that such information may be pub3 licly released and has been collected by the 

4 Secretary as part of the survey. 

5 ‘‘(H) PENALTIES.—The Secretary may en6 force non-compliance with this paragraph by a 

7 pharmacy through the establishment of pen8 alties or the suspension of payments under this 

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

10 this paragraph has been completed.’’; 

11 (3) in paragraph (2)— 

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

13 including payment rates under Medicaid man14 aged care entities or other specified entities (as 

15 such terms are defined in section 

16 1903(m)(9)(D)),’’ after ‘‘under this title’’; and 

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

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

19 the semicolon; and 

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

21 $5,000,000 for fiscal year 2024 and each fiscal year 

22 thereafter,’’ after ‘‘2010’’. 

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

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


tkelley on DSK125TN23PROD with BILLS
46 

•S 2973 IS

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

2 the date of enactment of this Act. 

3 SEC. 7. OIG STUDY AND REPORT ON DRUG PRICE MARK4 UPS IN MEDICARE PART D. 

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

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

7 following new subsection: 

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

9 MARK-UPS UNDER THIS PART.— 

10 ‘‘(1) STUDY.—The Inspector General of the De11 partment of Health and Human Services (in this 

12 subsection referred to as the ‘Inspector General’) 

13 shall conduct a study on the impact of related party 

14 transactions within select vertically integrated enti15 ties on the negotiated price (as defined in section 

16 1860D–2(d)(1)(B)) paid by part D plan sponsors 

17 for covered part D drugs. Such study may include 

18 an analysis of the following: 

19 ‘‘(A) Acquisition costs by the affiliate with20 in such vertically integrated entities that ini21 tially acquires the prescription drug for a sam22 ple of covered part D drugs, including at least 

23 5 generic drugs, brand drugs, specialty brand 

24 drugs, and specialty generic drugs. 


tkelley on DSK125TN23PROD with BILLS
47 

•S 2973 IS

1 ‘‘(B) The methodologies and negotiation 

2 processes used to calculate transfer prices or 

3 other transactions between related parties with 

4 respect to such covered part D drugs. 

5 ‘‘(C) The impact of the transactions de6 scribed in subparagraph (B) on the negotiated 

7 price, net of direct and indirect remuneration, 

8 for such covered part D drugs. 

9 ‘‘(D) The margin captured by different af10 filiates within such vertically integrated entities 

11 through the transactions described in subpara12 graph (B). 

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

14 transactions described in subparagraph (B) on 

15 costs to individuals enrolled in a prescription 

16 drug plan or an MA–PD plan and program 

17 spending on prescription drugs under this part. 

18 ‘‘(F) Other issues determined to be rel19 evant and appropriate by the Inspector General. 

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

21 date of enactment of this subsection, the Inspector 

22 General shall submit to the Committee on Finance 

23 of the Senate and the Committee on Energy and 

24 Commerce and the Committee on Ways and Means 

25 of the House of Representatives a report containing 


tkelley on DSK125TN23PROD with BILLS
48 

•S 2973 IS

1 the results of the study conducted under paragraph 

2 (1), together with recommendations for such legisla3 tion and administrative action as the Inspector Gen4 eral determines appropriate. 

5 ‘‘(3) FUNDING.—In addition to amounts other6 wise available, there is appropriated to the Inspector 

7 General, out of any money in the Treasury not oth8 erwise appropriated, $5,200,000 for fiscal year 

9 2024, to remain available until expended, to carry 

10 out this subsection.’’. 

11 SEC. 8. RESOLVING P&T COMMITTEE CONFLICTS OF INTER12 EST. 

13 Section 1860D–4(b)(3)(A)(ii)(I) of the Social Secu14 rity Act (42 U.S.C. 1395w–104(b)(3)(A)(ii)(I)) is amend15 ed by inserting the following before the semicolon: ‘‘(and, 

16 for 2025 and each subsequent year, any pharmacy benefit 

17 manager acting under contract with such sponsor offering 

18 such plan)’’. 

19 SEC. 9. ENHANCING PBM TRANSPARENCY REQUIREMENTS. 

20 (a) IN GENERAL.—Section 1150A of the Social Secu21 rity Act (42 U.S.C. 1320b–23) is amended— 

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

23 following: 

24 ‘‘(a) PROVISION OF INFORMATION.— 


tkelley on DSK125TN23PROD with BILLS
49 

•S 2973 IS

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

2 provide the information described in subsection (b) 

3 to the Secretary and, in the case of an entity de4 scribed in subparagraph (B) or an affiliate of such 

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

6 benefits plan with which the entity is under contract, 

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

8 Secretary shall specify: 

9 ‘‘(A) A health benefits plan. 

10 ‘‘(B) Any entity that provides pharmacy 

11 benefits management services on behalf of a 

12 health benefits plan (in this section referred to 

13 as a ‘PBM’) that manages prescription drug 

14 coverage under a contract with— 

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

16 drug plan or an MA organization offering 

17 an MA–PD plan under part D of title 

18 XVIII; or 

19 ‘‘(ii) a qualified health benefits plan 

20 offered through an exchange established by 

21 a State under section 1311 of the Patient 

22 Protection and Affordable Care Act. 

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

24 subparagraph (B) that acts as a price nego25 tiator or group purchaser on behalf of such 


tkelley on DSK125TN23PROD with BILLS
50 

•S 2973 IS

1 PBM, PDP sponsor, MA organization, or quali2 fied health benefits plan. 

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

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

5 controlled by, or related under a common ownership 

6 structure with a PBM (including an entity owned or 

7 controlled by the PDP sponsor of a prescription 

8 drug plan, MA organization offering an MA–PD 

9 plan, or qualified health benefits plan for which such 

10 entity is acting as a price negotiator or group pur11 chaser).’’; 

12 (2) in subsection (b)— 

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

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

15 and 

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

17 paragraph: 

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

19 disaggregated by type) of all fees the PBM or an af20 filiate of the PBM receives from all pharmaceutical 

21 manufacturers in connection with patient utilization 

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

23 the aggregate and disaggregated by type) of such 

24 fees that are passed through to the plan sponsor or 

25 issuer.’’; and 


tkelley on DSK125TN23PROD with BILLS
51 

•S 2973 IS

1 (3) by adding at the end the following new sub2 section: 

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

4 publicly available on the internet website of the Centers 

5 for Medicare & Medicaid Services an annual report that 

6 summarizes the trends observed with respect to data re7 ported under subsection (b).’’. 

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

9 this section shall apply to plan or contract years beginning 

10 on or after January 1, 2027. 

11 (c) IMPLEMENTATION.—Notwithstanding any other 

12 provision of law, the Secretary may implement the amend13 ments made by this section by program instruction or oth14 erwise. 

15 (d) NON-APPLICATION OF THE PAPERWORK REDUC16 TION ACT.—Chapter 35 of title 44, United States Code 

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

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

19 amendments made by this section. 

20 SEC. 10. FACILITATING MIDYEAR FORMULARY CHANGES 

21 FOR BIOSIMILARS. 

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

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

24 adding at the end the following new paragraph: 


tkelley on DSK125TN23PROD with BILLS
52 

•S 2973 IS

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

2 PERMITTED FOR CERTAIN BIOSIMILAR BIOLOGICAL

3 PRODUCTS AND THE REFERENCE PRODUCT OF SUCH

4 BIOSIMILARS.—If a PDP sponsor of a prescription 

5 drug plan uses a formulary (including the use of 

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

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

8 and subsequent plan years, in the case of a cov9 ered part D drug that is the reference biological 

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

11 Public Health Service Act) with respect to a 

12 biosimilar biological product (defined as a bio13 logical product licensed under section 351(k) of 

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

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

16 days of the plan year, subject to paragraph 

17 (3)(E), change the preferred or tiered cost-shar18 ing status of such reference biological product 

19 if such PDP sponsor adds, before or at the 

20 same time, to such formulary such biosimilar 

21 biological product at the same or a higher pre22 ferred status, or to the same or lower cost-shar23 ing tier, as that of such reference biological 

24 product immediately prior to such change. 


tkelley on DSK125TN23PROD with BILLS
53 

•S 2973 IS

1 ‘‘(B) REQUEST FOR APPROVAL OF

2 CHANGE.—Prior to making a change described 

3 in subparagraph (A), the PDP sponsor shall 

4 submit to the Secretary a request to make such 

5 change. If the Secretary approves the request 

6 or has not provided a decision to the PDP 

7 sponsor regarding such request within 30 days 

8 of receiving such request, such PDP sponsor 

9 may make such change.’’. 

10 (b) ADMINISTRATION.— 

11 (1) IMPLEMENTATION.—Notwithstanding any 

12 other provision of law, the Secretary of Health and 

13 Human Services may implement the amendment 

14 made by subsection (a) by program instruction or 

15 otherwise. 

16 (2) NON-APPLICATION OF THE PAPERWORK RE17 DUCTION ACT.—Chapter 35 of title 44, United 

18 States Code (commonly referred to as the ‘‘Paper19 work Reduction Act of 1995’’), shall not apply to the 

20 implementation of the amendment made by sub21 section (a). 


tkelley on DSK125TN23PROD with BILLS
54 

•S 2973 IS

1 SEC. 11. STRENGTHENING PHARMACY ACCESS FOR SEN2 IORS. 

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

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

5 end the following new subparagraph: 

6 ‘‘(F) LIMITED ACCESS DRUGS.— 

7 ‘‘(i) LIMITATION ON RESTRICTIONS OR

8 LIMITS ON ACCESS.—For each plan year 

9 (beginning with plan year 2026), a PDP 

10 sponsor offering a prescription drug plan— 

11 ‘‘(I) may not restrict or limit ac12 cess to any covered part D drug to a 

13 subset of their network pharmacies, 

14 other than with respect to a limited 

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

16 and 

17 ‘‘(II) shall document the ration18 ale for why a covered part D drug 

19 meets the definition of a limited ac20 cess drug under clause (v), if such 

21 plan restricts or limits access to a lim22 ited access drug to a subset of net23 work pharmacies. 

24 ‘‘(ii) ANNUAL SUBMISSION OF INFOR25 MATION TO THE SECRETARY ON LIMITED

26 ACCESS DRUGS.—For each plan year (beVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
55 

•S 2973 IS

1 ginning with plan year 2026), each PDP 

2 sponsor offering a prescription drug plan 

3 shall submit to the Secretary, at a time 

4 and in a manner specified by the Sec5 retary, with respect to each prescription 

6 drug plan offered by the sponsor during 

7 such plan year— 

8 ‘‘(I) a list of all covered part D 

9 drugs that the PDP sponsor des10 ignated as a limited access drug; 

11 ‘‘(II) for each covered part D 

12 drug included in the list described in 

13 subclause (I), a written rationale for 

14 why such drug meets the definition of 

15 a limited access drug; 

16 ‘‘(III) a summary of the require17 ments imposed on network pharmacies 

18 (including all accreditation require19 ments, if any) to ensure appropriate 

20 handling and dispensing of each cov21 ered part D drug included in the list 

22 described in subclause (I); 

23 ‘‘(IV) the percentages of each 

24 covered part D drug included in the 

25 list described in subclause (I) that is 


tkelley on DSK125TN23PROD with BILLS
56 

•S 2973 IS

1 dispensed through retail pharmacies, 

2 specialty pharmacies, mail order phar3 macies, or other dispensing channels 

4 as defined by the PDP sponsor, re5 spectively; 

6 ‘‘(V) the annual percentage of 

7 each covered part D drug included in 

8 the list described in subclause (I) that 

9 is dispensed through a pharmacy that 

10 is affiliated with the plan or is an af11 filiate (as defined in section 1860D– 

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

13 manager acting on behalf of such 

14 sponsor or such plan; and 

15 ‘‘(VI) any other information de16 termined appropriate by the Sec17 retary. 

18 ‘‘(iii) PHARMACY ACCESS TO LIMITED

19 ACCESS DRUG INFORMATION.—For plan 

20 years beginning with plan year 2026, upon 

21 the request of a network pharmacy, a PDP 

22 sponsor of a prescription drug plan shall 

23 provide such pharmacy, not later than 14 

24 days after receiving such request, with the 


tkelley on DSK125TN23PROD with BILLS
57 

•S 2973 IS

1 information described in subclauses (I), 

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

3 ‘‘(iv) HHS ANNUAL REPORT ON LIM4 ITED ACCESS DRUGS.—Not later than De5 cember 31, 2028, and annually thereafter, 

6 the Secretary shall submit to the Com7 mittee on Finance of the Senate, and the 

8 Committee on Ways and Means and the 

9 Committee on Energy and Commerce of 

10 the House of Representatives a report on 

11 compliance by PDP sponsors with the re12 quirements under this subparagraph. Each 

13 such report shall include— 

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

15 trends, variations, and rationales for 

16 the designation by PDP sponsors of 

17 certain covered part D drugs as lim18 ited access drugs, and the implications 

19 of such designations on beneficiary ac20 cess to such covered part D drugs; 

21 ‘‘(II) a description of the infor22 mation submitted to the Secretary 

23 under clause (ii) (in a manner that 

24 does not disclose the identity of a 

25 pharmacy, a PDP sponsor, a prescripVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
58 

•S 2973 IS

1 tion drug plan, or pharmacy benefit 

2 manager, or any proprietary pricing 

3 information); and 

4 ‘‘(III) any other information de5 termined appropriate by the Sec6 retary. 

7 ‘‘(v) LIMITED ACCESS DRUG DE8 FINED.—In this subparagraph, the term 

9 ‘limited access drug’ means a covered part 

10 D drug that meets at least one of the fol11 lowing: 

12 ‘‘(I) The Food and Drug Admin13 istration has restricted distribution of 

14 such covered part D drug to certain 

15 facilities or physicians. 

16 ‘‘(II) The dispensing of such cov17 ered part D drug requires extraor18 dinary special handling, provider co19 ordination, or patient education that 

20 cannot be met by a network phar21 macy.’’. 

22 ‘‘(vii) IMPLEMENTATION.—Notwith23 standing any other provision of law, the 

24 Secretary shall implement this subpara25 graph by program instruction or otherwise. 


tkelley on DSK125TN23PROD with BILLS
59 

•S 2973 IS

1 ‘‘(viii) NONAPPLICATION OF PAPER2 WORK REDUCTION ACT.—Chapter 35 of 

3 title 44, United States Code, shall not 

4 apply to any data collection undertaken by 

5 the Secretary under this subparagraph.’’. 

6 SEC. 12. BENEFICIARY-FOCUSED LISTENING SESSIONS TO 

7 IMPROVE PRESCRIPTION DRUG PLAN TRANS8 PARENCY, ACCESS, AND CHOICE. 

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

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

11 by adding at the end the following new subsection: 

12 ‘‘(f) BENEFICIARY-FOCUSED LISTENING SESSIONS

13 TO IMPROVE PRESCRIPTION DRUG PLAN TRANS14 PARENCY, ACCESS, AND CHOICE.— 

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

16 31, 2024, the Secretary shall hold at least one bene17 ficiary-focused listening session to receive input on 

18 potential improvements to the experience with, and 

19 transparency of, prescription drug plans under this 

20 part, as described in paragraph (2). 

21 ‘‘(2) BENEFICIARY-FOCUSED LISTENING SES22 SIONS.—Any beneficiary-focused listening session 

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

24 including beneficiaries, caregivers of beneficiaries, 

25 consumer and patient advocacy organizations, health 


tkelley on DSK125TN23PROD with BILLS
60 

•S 2973 IS

1 care providers, and other interested parties. Any 

2 such listening sessions may include an opportunity 

3 for the public to provide input to the Secretary on 

4 potential improvements to— 

5 ‘‘(A) the information made available by 

6 prescription drug plans to individuals; 

7 ‘‘(B) tools and mechanisms to assist enroll8 ees of prescription drug plans in navigating 

9 plan complaint systems, as well as the efficiency 

10 and effectiveness of such systems; 

11 ‘‘(C) tools and mechanisms to assist bene12 ficiaries in selecting a prescription drug plan; 

13 ‘‘(D) tools and mechanisms to assist en14 rollees of prescription drug plans in navigating 

15 utilization management requirements of such 

16 plans, such as step therapy and prior authoriza17 tion; 

18 ‘‘(E) access to, and effectiveness and utili19 zation of, electronic real-time benefit tools (as 

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

21 Code of Federal Regulations, or any successor 

22 regulation) and beneficiary real-time benefit 

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

24 title 42, Code of Federal Regulations, or any 

25 successor regulation); 


tkelley on DSK125TN23PROD with BILLS
61 

•S 2973 IS

1 ‘‘(F) formulary management and oversight 

2 by prescription drug plans; and 

3 ‘‘(G) other subjects, as determined appro4 priate by the Secretary.’’. 

5 SEC. 13. REPORTING ON ENFORCEMENT AND OVERSIGHT 

6 OF PHARMACY ACCESS REQUIREMENTS. 

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

8 U.S.C. 1395w–152), as amended by section 12, is amend9 ed by adding at the end the following new subsection: 

10 ‘‘(g) BIENNIAL REPORT ON ENFORCEMENT AND

11 OVERSIGHT OF PHARMACY ACCESS REQUIREMENTS.— 

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

13 after the date of enactment of this subsection, and 

14 at least once every 2 years thereafter, the Secretary 

15 shall publish a report on enforcement and oversight 

16 actions and activities undertaken by the Secretary 

17 with respect to the requirements under section 

18 1860D–4(b)(1). 

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

20 (1) shall not disclose— 

21 ‘‘(A) identifiable information about individ22 uals or entities unless such information is oth23 erwise publicly available; or 

24 ‘‘(B) trade secrets with respect to any enti25 ties.’’. 


tkelley on DSK125TN23PROD with BILLS
62 

•S 2973 IS

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

2 ACROSS THE SUPPLY CHAIN. 

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

4 U.S.C. 1395w–152), as amended by section 13, is amend5 ed by adding at the end the following new subsection: 

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

7 COMPENSATION AND PAYMENT STRUCTURES IN THE

8 PRESCRIPTION DRUG SUPPLY CHAIN.— 

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

10 United States (in this subsection referred to as the 

11 ‘Comptroller General’) shall conduct a study describ12 ing the use of compensation and payment structures 

13 related to a prescription drug’s price within the re14 tail prescription drug supply chain in this part. Such 

15 study shall summarize information from Federal 

16 agencies and industry experts, to the extent avail17 able, with respect to the following: 

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

19 (such as the pricing benchmarks used), and 

20 prevalence of compensation and payment struc21 tures related to a prescription drug’s price, 

22 such as calculating fee amounts as a percentage 

23 of a prescription drug’s price, between inter24 mediaries in the prescription drug supply chain, 

25 including— 

26 ‘‘(i) pharmacy benefit managers; 


tkelley on DSK125TN23PROD with BILLS
63 

•S 2973 IS

1 ‘‘(ii) part D plan sponsors; 

2 ‘‘(iii) drug wholesalers; 

3 ‘‘(iv) pharmacies; 

4 ‘‘(v) manufacturers; 

5 ‘‘(vi) pharmacy services administrative 

6 organizations; 

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

8 and other entities that advise part D plan 

9 sponsors about pharmacy benefits or re10 view part D plan sponsor contracts with 

11 pharmacy benefit managers; and 

12 ‘‘(viii) other service providers that 

13 contract with any of the entities described 

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

15 price-related compensation and payment 

16 structures, such as rebate aggregators (or 

17 other entities that negotiate or process 

18 price concessions on behalf of pharmacy 

19 benefit managers, plan sponsors, or phar20 macies). 

21 ‘‘(B) The primary business models and 

22 compensation structures for each category of 

23 intermediary described in subparagraph (A). 

24 ‘‘(C) Variation in price-related compensa25 tion structures between affiliated entities (such 


tkelley on DSK125TN23PROD with BILLS
64 

•S 2973 IS

1 as entities with common ownership, either full 

2 or partial, and subsidiary relationships) and un3 affiliated entities. 

4 ‘‘(D) Potential conflicts of interest among 

5 contracting entities related to the use of pre6 scription drug price-related compensation struc7 tures, such as the potential for fees or other 

8 payments set as a percentage of a prescription 

9 drug’s price to advantage formulary selection, 

10 distribution, or purchasing of prescription drugs 

11 with higher prices. 

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

13 and level of price-based compensation struc14 tures over time and between different market 

15 segments, such as under this part and the Med16 icaid program under title XIX. 

17 ‘‘(F) The effects of drug price-related com18 pensation structures and alternative compensa19 tion structures on Federal health care programs 

20 and program beneficiaries, including with re21 spect to cost-sharing, premiums, Federal out22 lays, biosimilar and generic drug adoption and 

23 utilization, drug shortage risks, and the poten24 tial for fees set as a percentage of a drug’s 

25 price to advantage the formulary selection, disVerDate Sep 11 2014 21:50 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00064 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

tkelley on DSK125TN23PROD with BILLS
65 

•S 2973 IS

1 tribution, or purchasing of drugs with higher 

2 prices. 

3 ‘‘(G) Other issues determined to be rel4 evant and appropriate by the Comptroller Gen5 eral. 

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

7 date of enactment of this subsection, the Comp8 troller General shall submit to Congress a report 

9 containing the results of the study conducted under 

10 paragraph (1), together with recommendations for 

11 such legislation and administrative action as the 

12 Comptroller General determines appropriate.’’. 

13 SEC. 15. REPORTS ON INAPPROPRIATE PHARMACY REJEC14 TIONS. 

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

16 U.S.C. 1395w–152), as amended by section 14, is amend17 ed by adding at the end the following new subsection: 

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

19 INAPPROPRIATE PHARMACY REJECTIONS AND INAPPRO20 PRIATE COVERAGE DENIALS UNDER MEDICARE PART

21 D.— 

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

23 2026, and at least once every 4 years thereafter, the 

24 Secretary, in consultation with the Office of the In25 spector General of the Department of Health and 


tkelley on DSK125TN23PROD with BILLS
66 

•S 2973 IS

1 Human Services, shall post, on a publicly available 

2 website, a report related to preventing, identifying, 

3 or addressing inappropriate pharmacy rejections (as 

4 defined in paragraph (2)(B)) and inappropriate cov5 erage denials (as defined in paragraph (2)(A)) under 

6 this part. Such reports shall include— 

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

8 initiatives underway to prevent, identify, or ad9 dress such rejections and denials, in accordance 

10 with existing authorities; 

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

12 information available with respect to such rejec13 tions and denials, including— 

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

15 have been adopted) used by the Secretary 

16 for identifying PDP sponsors and MA or17 ganizations with relatively high rates of 

18 such rejections or denials; and 

19 ‘‘(ii) notable longitudinal trends or 

20 other patterns, as determined appropriate 

21 by the Secretary; 

22 ‘‘(C) an overview of corrective actions 

23 taken and technical assistance provided by the 

24 Secretary in response to violations of existing 


tkelley on DSK125TN23PROD with BILLS
67 

•S 2973 IS

1 requirements with respect to such rejections 

2 and denials; and 

3 ‘‘(D) a description of barriers, if any, pre4 venting the Secretary from taking administra5 tive actions sufficient to identify and address 

6 such rejections and denials. 

7 ‘‘(2) DEFINITIONS.—For purposes of this sub8 section: 

9 ‘‘(A) INAPPROPRIATE COVERAGE DE10 NIAL.—The term ‘inappropriate coverage de11 nial’ means a denial of coverage of a covered 

12 part D drug claim that violates the require13 ments of this part. 

14 ‘‘(B) INAPPROPRIATE PHARMACY REJEC15 TIONS.—The term ‘inappropriate pharmacy re16 jection’ means a rejection of a covered part D 

17 drug claim that violates the requirements of 

18 this part, such as through the application of 

19 utilization management requirements that the 

20 Secretary has not approved.’’. 

21 SEC. 16. GAO STUDY ON DRUG SHORTAGES. 

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

23 U.S.C. 1395w–152), as amended by section 15, is amend24 ed by adding at the end the following new subsection: 


tkelley on DSK125TN23PROD with BILLS
68 

•S 2973 IS

1 ‘‘(j) GAO STUDY AND REPORT ON DRUG SHORT2 AGES.— 

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

4 United States (in this subsection referred to as the 

5 ‘Comptroller General’) shall conduct a study on fac6 tors contributing to shortages of covered part D 

7 drugs across the outpatient prescription drug supply 

8 chain. Such study shall include analysis of— 

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

10 covered part D drugs that have experienced at 

11 least 1 shortage (as defined under section 506C 

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

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

14 the duration of shortages experienced by cov15 ered part D drugs; 

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

17 proximate causes and other potential causes of 

18 shortages experienced by covered part D drugs; 

19 ‘‘(D) effects of such shortages on bene20 ficiaries enrolled in prescription drug plans 

21 under this part, including with respect to access 

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

23 costs; and 

24 ‘‘(E) other issues determined appropriate 

25 by the Comptroller General. 


tkelley on DSK125TN23PROD with BILLS
69 

•S 2973 IS

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

2 date of enactment of this subsection, the Comp3 troller General shall submit to Congress a report 

4 containing the results of the study conducted under 

5 paragraph (1), together with recommendations for 

6 such legislation and administrative action as the 

7 Comptroller General determines appropriate.’’. 

8 SEC. 17. REPORT ON BIOSIMILAR AND GENERIC ACCESS 

9 UNDER MEDICARE PART D. 

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

11 U.S.C. 1395w–152), as amended by section 16, is amend12 ed by adding at the end the following new subsection: 

13 ‘‘(k) OIG REPORT ON BIOSIMILAR AND GENERIC AC14 CESS UNDER PART D.— 

15 ‘‘(1) STUDY.—The Office of the Inspector Gen16 eral of the Department of Health and Human Serv17 ices (referred to in this subsection as the ‘Office of 

18 the Inspector General’) shall conduct a study on bio19 similar and generic drug access and adoption under 

20 prescription drug plans offered under this part, in21 cluding with respect to barriers to increased adop22 tion and utilization of lower-priced biosimilar and 

23 generic utilization, plan features that discourage or 

24 encourage the utilization of these products, and the 


tkelley on DSK125TN23PROD with BILLS
70 

•S 2973 IS

1 gross and net spending effects of policies that in2 creased adoption of these products under this part. 

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

4 date of enactment of this subsection, the Office of 

5 the Inspector General shall publish a report on the 

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

7 SEC. 18. MEDICARE IMPROVEMENT FUND. 

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

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

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

11 following: ‘‘during and after— 

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

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

Æ 


tkelley on DSK125TN23PROD with BILLS