I 

112TH CONGRESS 

1ST SESSION H. R. 1946 

To ensure and foster continued safety and quality of care and a competitive 

marketplace by exempting independent pharmacies from the antitrust 

laws in their negotiations with health plans and health insurance insurers. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 23, 2011 

Mr. MARINO (for himself and Mr. GOHMERT) introduced the following bill; 

which was referred to the Committee on the Judiciary 

A BILL 

To ensure and foster continued safety and quality of care 

and a competitive marketplace by exempting independent 

pharmacies from the antitrust laws in their negotiations 

with health plans and health insurance insurers. 

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. 

4 This Act may be cited as the ‘‘Preserving Our Home5 town Independent Pharmacies Act of 2011’’. 


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1 SEC. 2. APPLICATION OF THE ANTITRUST LAWS TO INDE2 PENDENT PHARMACIES NEGOTIATING WITH 

3 HEALTH PLANS. 

4 (a) IN GENERAL.—Any independent pharmacies who 

5 are engaged in negotiations with a health plan regarding 

6 the terms of any contract under which the pharmacies pro7 vide health care items or services for which benefits are 

8 provided under such plan shall, only in connection with 

9 such negotiations, be treated under the antitrust laws as 

10 an employee engaged in concerted activities and shall not 

11 be regarded as having the status of an employer, inde12 pendent contractor, managerial employee, or supervisor. 

13 (b) PROTECTION FOR GOOD FAITH ACTIONS.—Ac14 tions taken in good faith reliance on subsection (a) shall 

15 not be the subject under the antitrust laws of criminal 

16 sanctions nor of any civil damages, fees, or penalties be17 yond actual damages incurred. 

18 (c) NO CHANGE IN NATIONAL LABOR RELATIONS

19 ACT.—Nothing in this section shall be construed as chang20 ing or amending any provision of the National Labor Rela21 tions Act, or as affecting the status of any group of per22 sons under that Act. 

23 (d) EFFECTIVE DATE.—The exemption provided in 

24 subsection (a) shall apply to conduct occurring beginning 

25 on the date of the enactment of this Act. 


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1 (e) LIMITATIONS ON EXEMPTION.—Nothing in this 

2 section shall exempt from the application of the antitrust 

3 laws any agreement or otherwise unlawful conspiracy 

4 that— 

5 (1) would have the effect of boycotting any 

6 independent pharmacy or group of independent 

7 pharmacies, or would exclude, limit the participation 

8 or reimbursement of, or otherwise limit the scope of 

9 services to be provided by, any independent phar10 macy or group of independent pharmacies with re11 spect to the performance of services that are within 

12 the scope of practice as defined or permitted by rel13 evant law or regulation; 

14 (2) allocates a market among competitors; 

15 (3) unlawfully ties the sale or purchase of one 

16 product or service to the sale or purchase of another 

17 product or service; or 

18 (4) monopolizes or attempts to monopolize a 

19 market. 

20 (f) LIMITATION BASED ON MARKET SHARE OF

21 GROUP.—This section shall not apply with respect to the 

22 negotiations of any group of independent pharmacies with 

23 a health plan regarding the terms of any contract under 

24 which such pharmacies provide health care items or serv25 ices for which benefits are provided under such plan in 


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1 a PDP region (as defined in subsection (j)(4)) if the num2 ber of pharmacy licenses of such pharmacies within such 

3 group in such region exceeds 25 percent of the total num4 ber of pharmacy licenses issued to all retail pharmacies 

5 (including both independent and other pharmacies) in 

6 such region. 

7 (g) NO EFFECT ON TITLE VI OF CIVIL RIGHTS ACT

8 OF 1964.—Nothing in this section shall be construed to 

9 affect the application of title VI of the Civil Rights Act 

10 of 1964. 

11 (h) NO APPLICATION TO SPECIFIED FEDERAL PRO12 GRAMS.—Nothing in this section shall apply to negotia13 tions between independent pharmacies and health plans 

14 pertaining to benefits provided under any of the following: 

15 (1) The Medicaid Program under title XIX of 

16 the Social Security Act (42 U.S.C. 1396 et seq.). 

17 (2) The State Children’s Health Insurance Pro18 gram (SHIP) under title XXI of the Social Security 

19 Act (42 U.S.C. 1397aa et seq.). 

20 (3) Chapter 55 of title 10, United States Code 

21 (relating to medical and dental care for members of 

22 the uniformed services). 

23 (4) Chapter 17 of title 38, United States Code 

24 (relating to Veterans’ medical care). 


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1 (5) Chapter 89 of title 5, United States Code 

2 (relating to the Federal employees’ health benefits 

3 program). 

4 (6) The Indian Health Care Improvement Act 

5 (25 U.S.C. 1601 et seq.). 

6 (7) Part C or D of title XVIII of the Social Se7 curity Act. 

8 (i) DEFINITIONS.—For purposes of this section: 

9 (1) ANTITRUST LAWS.—The term ‘‘antitrust 

10 laws’’— 

11 (A) has the meaning given it in subsection 

12 (a) of the first section of the Clayton Act (15 

13 U.S.C. 12(a)), except that such term includes 

14 section 5 of the Federal Trade Commission Act 

15 (15 U.S.C. 45) to the extent such section 5 ap16 plies to unfair methods of competition; and 

17 (B) includes any State law similar to the 

18 laws referred to in subparagraph (A). 

19 (2) HEALTH PLAN AND RELATED TERMS.— 

20 (A) IN GENERAL.—The term ‘‘health 

21 plan’’— 

22 (i) means a group health plan or a 

23 health insurance issuer that is offering 

24 health insurance coverage; 


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1 (ii) includes any entity that con2 tracts with such a plan or issuer for the 

3 administering of services under the plan or 

4 coverage; and 

5 (iii) does not include a Medicare Ad6 vantage plan offered under part C of title 

7 XVIII of the Social Security Act or a pre8 scription drug plan offered under part D of 

9 such title. 

10 (B) HEALTH INSURANCE COVERAGE; 

11 HEALTH INSURANCE ISSUER.—The terms 

12 ‘‘health insurance coverage’’ and ‘‘health insur13 ance issuer’’ have the meanings given such 

14 terms under paragraphs (1) and (2), respec15 tively, of section 733(b) of the Employee Retire16 ment Income Security Act of 1974 (29 U.S.C. 

17 1191b(b)). 

18 (C) GROUP HEALTH PLAN.—The term 

19 ‘‘group health plan’’ has the meaning given that 

20 term in section 733(a)(1) of the Employee Re21 tirement Income Security Act of 1974 (29 

22 U.S.C. 1191b(a)(1)). 

23 (3) INDEPENDENT PHARMACY.—The term 

24 ‘‘independent pharmacy’’ means a pharmacy that 

25 has a market share of— 


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1 (A) less than 10 percent in any PDP re2 gion; and 

3 (B) less than 1 percent in the United 

4 States. 

5 For purposes of the preceding sentence, all phar6 macies that are members of the same controlled 

7 group of corporations (within the meaning of section 

8 267(f) of the Internal Revenue Code of 1986) and 

9 all pharmacies under common control (within the 

10 meaning of section 52(b) of such Code but deter11 mined by treating an interest of more than 50 per12 cent as a controlling interest) shall be treated as 1 

13 pharmacy. 

14 (4) PDP REGION.—The term ‘‘PDP region’’ 

15 has the meaning given such term in section 1860D– 

16 11(a)(2) of the Social Security Act (42 U.S.C. 

17 1395w–111(a)(2)). 

18 (j) 5-YEAR SUNSET.—The exemption provided in 

19 subsection (a) shall only apply to conduct occurring during 

20 the 5-year period beginning on the date of the enactment 

21 of this Act and shall continue to apply for 1 year after 

22 the end of such period to contracts entered into before 

23 the end of such period. 

24 (k) GENERAL ACCOUNTABILITY OFFICE STUDY AND

25 REPORT.—The Comptroller General of the United States 


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1 shall conduct a study on the impact of enactment of this 

2 section during the 6-month period beginning with the 5th 

3 year of the 5-year period described in subsection (j). Not 

4 later than the end of such 6-month period, the Comptroller 

5 General shall submit to Congress a report on such study 

6 and shall include in the report such recommendations on 

7 the extension of this section (and changes that should be 

8 made in making such extension) as the Comptroller Gen9 eral deems appropriate. 

10 (l) OVERSIGHT.—Nothing in this section shall pre11 clude the Federal Trade Commission or the Department 

12 of Justice from overseeing the conduct of independent 

13 pharmacies covered under this section. 

Æ 


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