I 

115TH CONGRESS 

1ST SESSION H. R. 1316 

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 

MARCH 2, 2017 

Mr. COLLINS of Georgia (for himself, Mr. LOEBSACK, Mr. CARTER of Georgia, 

Mr. DUNCAN of Tennessee, Mrs. MCMORRIS RODGERS, Mr. BLUM, Mr. 

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

the Committees on Ways and Means, Armed Services, and Oversight and 

Government 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 ‘‘(7) 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, unless the PBM ad22 heres to the following criteria when handling person23 ally identifiable utilization and claims data or other 

24 sensitive patient data: 

25 ‘‘(A) The PBM may not transmit any per26 sonally identifiable utilization, protected health 


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1 information, or claims data, with respect to a 

2 plan enrollee, to a pharmacy owned by a PBM 

3 if the plan enrollee has not voluntarily elected 

4 in writing or via secure electronic means to fill 

5 that particular prescription at the PBM-owned 

6 pharmacy. 

7 ‘‘(B) The PBM may not require that a 

8 plan enrollee use a retail pharmacy, mail order 

9 pharmacy, specialty pharmacy, or other phar10 macy entity providing pharmacy services in 

11 which the PBM has an ownership interest or 

12 that has an ownership interest in the PBM, or 

13 provide an incentive to a plan enrollee to en14 courage the enrollee to use a retail pharmacy, 

15 mail order pharmacy, specialty pharmacy, or 

16 other pharmacy entity providing pharmacy serv17 ices in which the PBM has an ownership inter18 est or that has an ownership interest in the 

19 PBM, if the incentive is applicable only to such 

20 pharmacies.’’. 

21 (b) REGULAR UPDATE OF PRESCRIPTION DRUG

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

23 12(b) of the Social Security Act (42 U.S.C. 1395w– 

24 112(b)) is amended to read as follows: 


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1 ‘‘(6) REGULAR UPDATE OF PRESCRIPTION

2 DRUG PRICING STANDARD.— 

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

4 a prescription drug plan (or MA organization 

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

6 reimbursement (as described in subparagraph 

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

8 each contract entered into with such sponsor 

9 under this part (or organization under part C) 

10 with respect to the plan shall provide that the 

11 sponsor (or organization) shall— 

12 ‘‘(i) update such standard not less fre13 quently than once every 7 days, beginning 

14 with an initial update on January 1 of 

15 each year, to accurately reflect the market 

16 price of acquiring the drug; 

17 ‘‘(ii) disclose to applicable pharmacies 

18 and the contracting entities of such phar19 macies the sources used for making any 

20 such update immediately without require21 ment of request; 

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

23 for reimbursement is not publicly available, 

24 disclose to the applicable pharmacies and 

25 the respective contracting entities of such 


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1 pharmacies all individual drug prices to be 

2 so updated in advance of the use of such 

3 prices for the reimbursement of claims; 

4 ‘‘(iv) establish a process to appeal, in5 vestigate, and resolve disputes regarding 

6 individual drug prices that are less than 

7 the pharmacy acquisition price for such 

8 drug, which must be adjudicated within 7 

9 days of the pharmacy filing its appeal; and 

10 ‘‘(v) provide all such pricing data in 

11 an .xml spreadsheet format or a com12 parable easily accessible and complete 

13 spreadsheet format. 

14 ‘‘(B) PRESCRIPTION DRUG PRICING

15 STANDARD DEFINED.—For purposes of sub16 paragraph (A), a standard for reimbursement 

17 of a pharmacy is any methodology or formula 

18 for varying the pricing of a drug or drugs dur19 ing the term of the pharmacy reimbursement 

20 contract that is based on the cost of the drug 

21 involved, including drug pricing references and 

22 amounts that are based upon average wholesale 

23 price, wholesale average cost, average manufac24 turer price, average sales price, maximum alVerDate Sep 11 2014 02:50 Mar 08, 2017 Jkt 069200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1316.IH H1316

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1 lowable cost (MAC), or other costs, whether 

2 publicly available or not.’’. 

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

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

5 January 1, 2018. 

6 SEC. 3. REGULAR UPDATE OF PRESCRIPTION DRUG PRIC7 ING STANDARD UNDER TRICARE RETAIL 

8 PHARMACY PROGRAM. 

9 Section 1074g(d) of title 10, United States Code, is 

10 amended by adding at the end the following new para11 graph: 

12 ‘‘(3) To the extent practicable, with respect to the 

13 TRICARE retail pharmacy program described in sub14 section (a)(2)(E)(ii), the Secretary shall ensure that a con15 tract entered into with a TRICARE managed care support 

16 contractor includes requirements described in section 

17 1860D–12(b)(6) of the Social Security Act (42 U.S.C. 

18 1395w–112(b)(6)) to ensure the provision of information 

19 regarding the pricing standard for prescription drugs.’’. 

20 SEC. 4. PRESCRIPTION DRUG TRANSPARENCY IN THE FED21 ERAL EMPLOYEES HEALTH BENEFITS PRO22 GRAM. 

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

24 States Code, is amended by adding at the end the fol25 lowing new subsections: 


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

2 under this chapter under which a carrier has an agree3 ment with a pharmacy benefits manager (in this sub4 section referred to as a ‘PBM’) to manage prescription 

5 drug coverage or to control the costs of the prescription 

6 drug coverage unless the carrier and PBM adhere to the 

7 following criteria: 

8 ‘‘(1) The PBM may not transmit any personally 

9 identifiable utilization, protected health information, 

10 or claims data with respect to an individual enrolled 

11 under such contract or plan to a pharmacy owned by 

12 the PBM if the individual has not voluntarily elected 

13 in writing or via secure electronic means to fill that 

14 particular prescription at such a pharmacy. 

15 ‘‘(2) The PBM may not require that an indi16 vidual enrolled under such contract or plan use a re17 tail pharmacy, mail order pharmacy, specialty phar18 macy, or other pharmacy entity providing pharmacy 

19 services in which the PBM has an ownership interest 

20 or that has an ownership interest in the PBM or 

21 provide an incentive to a plan enrollee to encourage 

22 the enrollee to use a retail pharmacy, mail order 

23 pharmacy, specialty pharmacy, or other pharmacy 

24 entity providing pharmacy services in which the 

25 PBM has an ownership interest or that has an ownVerDate Sep 11 2014 02:50 Mar 08, 2017 Jkt 069200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1316.IH H1316

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1 ership interest in the PBM, if the incentive is appli2 cable only to such pharmacies. 

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

4 this chapter provides for a standard for reimbursement 

5 (as described in paragraph (2)) with respect to a prescrip6 tion drug plan, such contract or plan shall provide that 

7 the applicable carrier— 

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

9 than once every 7 days, beginning with an initial up10 date on January 1 of each year, to accurately reflect 

11 the market price of acquiring the drug; 

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

13 contracting entities of such pharmacies the sources 

14 used for making any such update immediately with15 out requirement of request; 

16 ‘‘(C) if the source for such a standard for reim17 bursement is not publicly available, disclose to the 

18 applicable pharmacies and contracting entities of 

19 such pharmacies all individual drug prices to be so 

20 updated in advance of the use of such prices for the 

21 reimbursement of claims; 

22 ‘‘(D) establish a process to appeal, investigate, 

23 and resolve disputes regarding individual drug prices 

24 that are less than the pharmacy acquisition price for 


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1 such drug, which must be adjudicated within 7 days 

2 of the pharmacy filing its appeal; and 

3 ‘‘(E) provide all such pricing data in an .xml 

4 spreadsheet format or a comparable easily accessible 

5 and complete spreadsheet format. 

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

7 reimbursement of a pharmacy is any methodology or for8 mula for varying the pricing of a drug or drugs during 

9 the term of the pharmacy reimbursement contract that is 

10 based on the cost of the drug involved, including drug pric11 ing references and amounts that are based upon average 

12 wholesale price, wholesale average cost, average manufac13 turer price, average sales price, maximum allowable cost, 

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

15 (b) APPLICATION.—The amendment made by sub16 section (a) shall apply to any contract entered into under 

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

18 the date of enactment of this section. 

Æ 


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