I 

116TH CONGRESS 

1ST SESSION H. R. 1035 

To amend title XVIII of the Social Security Act to provide for pharmacy 

benefits manager standards under the Medicare prescription drug program and Medicare Advantage program to further transparency of payment methodologies to pharmacies, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 7, 2019 

Mr. COLLINS of Georgia (for himself, Mr. LOEBSACK, Mr. DAVID P. ROE of 

Tennessee, Mr. WESTERMAN, Miss RICE of New York, Mr. KING of Iowa, 

Ms. CLARKE of New York, Mr. AUSTIN SCOTT of Georgia, Mr. HICE of 

Georgia, Mr. VELA, Mr. RASKIN, Mrs. RODGERS of Washington, Mr. 

WELCH, Mr. CARTER of Georgia, Mr. CRAWFORD, Mr. PETERSON, and 

Mr. BYRNE) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on 

Ways and Means, and Oversight and Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such 

provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend title XVIII of the Social Security Act to provide 

for pharmacy benefits manager standards under the 

Medicare prescription drug program and Medicare Advantage program to further transparency of payment 

methodologies to pharmacies, and for other purposes. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Prescription Drug 

3 Price Transparency Act’’. 

4 SEC. 2. PHARMACY BENEFITS MANAGER STANDARDS 

5 UNDER THE MEDICARE PROGRAM FOR PRE6 SCRIPTION DRUG PLANS AND MA–PD PLANS. 

7 (a) IN GENERAL.—Section 1860D–12(b) of the So8 cial Security Act (42 U.S.C. 1395w–112(b)) is amended 

9 by adding at the end the following new paragraph: 

10 ‘‘(8) PHARMACY BENEFITS MANAGER TRANS11 PARENCY REQUIREMENTS.—Each contract entered 

12 into with a PDP sponsor under this part with re13 spect to a prescription drug plan offered by such 

14 sponsor or with an MA organization offering an 

15 MA–PD plan under part C shall provide that the 

16 sponsor or organization, respectively, may not enter 

17 into a contract with any pharmacy benefits manager 

18 (referred to in this paragraph as a ‘PBM’) to man19 age the prescription drug coverage provided under 

20 such plan, or to control the costs of the prescription 

21 drug coverage under such plan, if the PBM— 

22 ‘‘(A) requires that a plan enrollee use a re23 tail pharmacy, mail order pharmacy, specialty 

24 pharmacy, or other pharmacy entity providing 

25 pharmacy services in which the PBM has an 


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1 ownership interest or that has an ownership in2 terest in the PBM; or 

3 ‘‘(B) provides an incentive (including a re4 duced copayment or coinsurance) to a plan en5 rollee to encourage the enrollee to use a retail 

6 pharmacy, mail order pharmacy, specialty phar7 macy, or other pharmacy entity providing phar8 macy services in which the PBM has an owner9 ship interest or that has an ownership interest 

10 in the PBM, if the incentive is applicable only 

11 to such pharmacies.’’. 

12 (b) REGULAR UPDATE OF PRESCRIPTION DRUG

13 PRICING STANDARD.—Paragraph (6) of section 1860D– 

14 12(b) of the Social Security Act (42 U.S.C. 1395w– 

15 112(b)) is amended to read as follows: 

16 ‘‘(6) REGULAR UPDATE OF PRESCRIPTION

17 DRUG PRICING STANDARD.— 

18 ‘‘(A) IN GENERAL.—If the PDP sponsor of 

19 a prescription drug plan (or MA organization 

20 offering an MA–PD plan) uses a standard for 

21 reimbursement (as described in subparagraph 

22 (B)) of pharmacies based on the cost of a drug, 

23 each contract entered into with such sponsor 

24 under this part (or organization under part C) 


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1 with respect to the plan shall provide that the 

2 sponsor (or organization) shall— 

3 ‘‘(i) update such standard not less fre4 quently than once every 7 days, beginning 

5 with an initial update on January 1 of 

6 each year, to accurately reflect the market 

7 price of acquiring the drug; 

8 ‘‘(ii) disclose to applicable pharmacies 

9 and the respective contracting entities of 

10 such pharmacies the sources used for mak11 ing any such update immediately without 

12 requirement of request; 

13 ‘‘(iii) if the source for such a standard 

14 for reimbursement is not publicly available, 

15 disclose to the applicable pharmacies and 

16 the respective contracting entities of such 

17 pharmacies all individual drug prices to be 

18 so updated in advance of the use of such 

19 prices for the reimbursement of claims; 

20 ‘‘(iv) establish a process for applicable 

21 pharmacies and respective contracting enti22 ties to appeal, investigate, and resolve dis23 putes regarding individual drug prices that 

24 are less than the pharmacy acquisition 

25 price for such drug, which must be adjuVerDate Sep 11 2014 00:48 Feb 20, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1035.IH H1035

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1 dicated within 7 days of the pharmacy fil2 ing its appeal; and 

3 ‘‘(v) provide to applicable pharmacies 

4 and respective contracting entities all such 

5 pricing data in an .xml spreadsheet format 

6 or a comparable easily accessible and com7 plete spreadsheet format. 

8 ‘‘(B) PRESCRIPTION DRUG PRICING

9 STANDARD DEFINED.—For purposes of sub10 paragraph (A), a standard for reimbursement 

11 of a pharmacy is any methodology or formula 

12 for varying the pricing of a drug or drugs dur13 ing the term of the pharmacy reimbursement 

14 contract that is based on the cost of the drug 

15 involved, including drug pricing references and 

16 amounts that are based upon average wholesale 

17 price, wholesale average cost, average manufac18 turer price, average sales price, maximum al19 lowable cost (MAC), or other costs, whether 

20 publicly available or not.’’. 

21 (c) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to plan years beginning on or after 

23 January 1, 2020. 


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1 SEC. 3. PRESCRIPTION DRUG TRANSPARENCY IN THE FED2 ERAL EMPLOYEES HEALTH BENEFITS PRO3 GRAM. 

4 (a) IN GENERAL.—Section 8902 of title 5, United 

5 States Code, is amended by adding at the end the fol6 lowing new subsections: 

7 ‘‘(p) A contract may not be made or a plan approved 

8 under this chapter under which a carrier has an agree9 ment with a pharmacy benefits manager (in this sub10 section referred to as a ‘PBM’) to manage prescription 

11 drug coverage or to control the costs of the prescription 

12 drug coverage if the PBM— 

13 ‘‘(1) requires that an individual enrolled under 

14 such contract or plan use a retail pharmacy, mail 

15 order pharmacy, specialty pharmacy, or other phar16 macy entity providing pharmacy services in which 

17 the PBM has an ownership interest or that has an 

18 ownership interest in the PBM; or 

19 ‘‘(2) provides an incentive (including a reduced 

20 copayment or coinsurance) to a plan enrollee to en21 courage the enrollee to use a retail pharmacy, mail 

22 order pharmacy, specialty pharmacy, or other phar23 macy entity providing pharmacy services in which 

24 the PBM has an ownership interest or that has an 

25 ownership interest in the PBM, if the incentive is 

26 applicable only to such pharmacies. 


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1 ‘‘(q)(1) If a contract made or plan approved under 

2 this chapter provides for a standard for reimbursement 

3 (as described in paragraph (2)) with respect to a prescrip4 tion drug plan, such contract or plan shall provide that 

5 the applicable carrier— 

6 ‘‘(A) update such standard not less frequently 

7 than once every 7 days, beginning with an initial up8 date on January 1 of each year, to accurately reflect 

9 the market price of acquiring the drug; 

10 ‘‘(B) disclose to applicable pharmacies and the 

11 respective contracting entities of such pharmacies 

12 the sources used for making any such update imme13 diately without requirement of request; 

14 ‘‘(C) if the source for such a standard for reim15 bursement is not publicly available, disclose to the 

16 applicable pharmacies and respective contracting en17 tities of such pharmacies all individual drug prices 

18 to be so updated in advance of the use of such prices 

19 for the reimbursement of claims; 

20 ‘‘(D) establish a process for applicable phar21 macies and respective contracting entities to appeal, 

22 investigate, and resolve disputes regarding individual 

23 drug prices that are less than the pharmacy acquisi24 tion price for such drug, which must be adjudicated 

25 within 7 days of the pharmacy filing its appeal; and 


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1 ‘‘(E) provide to applicable pharmacies and re2 spective contracting entities all such pricing data in 

3 an .xml spreadsheet format or a comparable easily 

4 accessible and complete spreadsheet format. 

5 ‘‘(2) For purposes of paragraph (1), a standard for 

6 reimbursement of a pharmacy is any methodology or for7 mula for varying the pricing of a drug or drugs during 

8 the term of the pharmacy reimbursement contract that is 

9 based on the cost of the drug involved, including drug pric10 ing references and amounts that are based upon average 

11 wholesale price, wholesale average cost, average manufac12 turer price, average sales price, maximum allowable cost, 

13 or other costs, whether publicly available or not.’’. 

14 (b) APPLICATION.—The amendment made by sub15 section (a) shall apply to any contract entered into under 

16 section 8902 of title 5, United States Code, on or after 

17 the date of enactment of this section. 

Æ 


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