II 

118TH CONGRESS 

1ST SESSION S. 1339 

To provide for increased oversight of entities that provide pharmacy benefit 

management services on behalf of group health plans and health insurance coverage. 

IN THE SENATE OF THE UNITED STATES 

APRIL 27, 2023 

Mr. SANDERS (for himself, Mr. CASSIDY, Mrs. MURRAY, and Mr. MARSHALL) 

introduced the following bill; which was read twice and referred to the 

Committee on Health, Education, Labor, and Pensions 

A BILL 

To provide for increased oversight of entities that provide 

pharmacy benefit management services on behalf of 

group health plans and health insurance coverage. 

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 ‘‘Pharmacy Benefit 

5 Manager Reform Act’’. 

6 SEC. 2. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR7 MACY BENEFIT MANAGEMENT SERVICES. 

8 (a) PHSA.—Title XXVII of the Public Health Serv9 ice Act (42 U.S.C. 300gg et seq.) is amended— 


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1 (1) in part D (42 U.S.C. 300gg–111 et seq.), 

2 by adding at the end the following new section: 

3 ‘‘SEC. 2799A–11. OVERSIGHT OF ENTITIES THAT PROVIDE 

4 PHARMACY BENEFIT MANAGEMENT SERV5 ICES. 

6 ‘‘(a) IN GENERAL.—For plan years beginning on or 

7 after January 1, 2025, a group health plan or health in8 surance issuer offering group health insurance coverage 

9 or an entity providing pharmacy benefit management serv10 ices on behalf of such a plan or issuer shall not enter into 

11 a contract with an applicable entity that limits the disclo12 sure of information to plan sponsors in such a manner 

13 that prevents the plan or issuer, or an entity providing 

14 pharmacy benefit management services on behalf of a plan 

15 or issuer, from making the reports described in subsection 

16 (b). 

17 ‘‘(b) REPORTS.— 

18 ‘‘(1) IN GENERAL.—For plan years beginning 

19 on or after January 1, 2025, not less frequently 

20 than annually, an entity providing pharmacy benefit 

21 management services on behalf of a covered group 

22 health plan shall submit to the plan sponsor of such 

23 covered group health plan a report in accordance 

24 with this subsection and make such report available 

25 to the plan sponsor in a machine-readable format 


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1 and, as the Secretary, the Secretary of Labor, and 

2 the Secretary of the Treasury may determine, other 

3 formats. Each such report shall include, with respect 

4 to the covered group health plan— 

5 ‘‘(A) as applicable, information collected 

6 from drug manufacturers by such issuer or en7 tity on the total amount of copayment assist8 ance dollars paid, or copayment cards applied, 

9 that were funded by the drug manufacturer 

10 with respect to the participants and bene11 ficiaries in such plan; 

12 ‘‘(B) a list of each drug covered by such 

13 plan or entity providing pharmacy benefit man14 agement services that was billed during the re15 porting period, including, with respect to each 

16 such drug during the reporting period— 

17 ‘‘(i) the brand name, generic or non18 proprietary name, and National Drug 

19 Code; 

20 ‘‘(ii) the number of participants and 

21 beneficiaries for whom the drug was billed 

22 during the reporting period, the total num23 ber of prescription claims for the drug (in24 cluding original prescriptions and refills), 

25 and the total number of dosage units of 


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1 the drug dispensed across the reporting pe2 riod; 

3 ‘‘(iii) for each claim or dosage unit de4 scribed in clause (ii), the type of dis5 pensing channel used, such as retail, mail 

6 order, or specialty pharmacy; 

7 ‘‘(iv) the wholesale acquisition cost, 

8 listed as cost per days supply, cost per dos9 age unit, and cost per typical course of 

10 treatment (as applicable); 

11 ‘‘(v) the total out-of-pocket spending 

12 by participants and beneficiaries on such 

13 drug after application of any benefits 

14 under the plan or coverage, including par15 ticipant and beneficiary spending through 

16 copayments, coinsurance, and deductibles, 

17 but not including any amounts spent by 

18 participants and beneficiaries on drugs not 

19 covered under the plan or coverage or for 

20 which no claim is submitted to the plan or 

21 coverage; and 

22 ‘‘(vi) for any drug for which gross 

23 spending by the plan exceeded $10,000 

24 and that is one of the 50 prescription 

25 drugs for which the group health plan 


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1 spent the most on prescription drug bene2 fits during the reporting period— 

3 ‘‘(I) a list of all other drugs in 

4 the same therapeutic class, including 

5 brand name drugs and biological 

6 products and generic drugs or bio7 similar biological products that are in 

8 the same therapeutic class as such 

9 drug; and 

10 ‘‘(II) if applicable, the rationale 

11 for preferred formulary placement of 

12 such drug in that therapeutic class, 

13 selected from a list of standard ra14 tionales established by the Secretary; 

15 ‘‘(C) a list of each therapeutic class of 

16 drugs that were dispensed under the health 

17 plan during the reporting period, and, with re18 spect to each such therapeutic class of drugs, 

19 during the reporting period— 

20 ‘‘(i) total gross spending by the plan, 

21 before rebates, fees, alternative discounts, 

22 or other remuneration; 

23 ‘‘(ii) the number of participants and 

24 beneficiaries who filled a prescription for a 

25 drug in that class; 


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1 ‘‘(iii) if applicable to that class, a de2 scription of the formulary tiers and utiliza3 tion management mechanisms (such as 

4 prior authorization or step therapy) em5 ployed for drugs in that class; 

6 ‘‘(iv) the total out-of-pocket spending 

7 by participants and beneficiaries, including 

8 participant and beneficiary spending 

9 through copayments, coinsurance, and 

10 deductibles; and 

11 ‘‘(v) for each therapeutic class under 

12 which 3 or more drugs are included on the 

13 formulary of such plan— 

14 ‘‘(I) the amount received, or ex15 pected to be received, by such entity, 

16 from an applicable entity, in rebates, 

17 fees, alternative discounts, or other 

18 remuneration that— 

19 ‘‘(aa) has been paid, or will 

20 be paid, by such an applicable 

21 entity for claims incurred during 

22 the reporting period; or 

23 ‘‘(bb) is related to utilization 

24 of drugs or drug spending; 


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1 ‘‘(II) the total net spending by 

2 the health plan on that class of drugs; 

3 and 

4 ‘‘(III) the net price per typical 

5 course of treatment or 30-day supply 

6 incurred by the health plan and its 

7 participants and beneficiaries, after 

8 rebates, fees, alternative discounts, or 

9 other remuneration provided by an 

10 applicable entity, for drugs dispensed 

11 within such therapeutic class during 

12 the reporting period; 

13 ‘‘(D) total gross spending on prescription 

14 drugs by the plan during the reporting period, 

15 before rebates, fees, alternative discounts, or 

16 other remuneration provided by an applicable 

17 entity; 

18 ‘‘(E) the total amount received, or ex19 pected to be received, by the health plan, from 

20 an applicable entity, in rebates, fees, alternative 

21 discounts, and other remuneration received 

22 from any such entities, related to utilization of 

23 drug or drug spending under that health plan 

24 during the reporting period; 


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1 ‘‘(F) the total net spending on prescription 

2 drugs by the health plan during the reporting 

3 period; 

4 ‘‘(G) amounts paid directly or indirectly in 

5 rebates, fees, or any other type of compensation 

6 (as defined in section 408(b)(2)(B)(ii)(dd)(AA) 

7 of the Employee Retirement Income Security 

8 Act of 1974) to brokers, consultants, advisors, 

9 or any other individual or firm who referred the 

10 group health plan’s business to the pharmacy 

11 benefit manager; and 

12 ‘‘(H) a summary document that includes 

13 such information described in subparagraphs 

14 (A) through (G) as the Secretary determines 

15 useful for plan sponsors for purposes of select16 ing pharmacy benefit management services, 

17 such as an estimated net price to plan sponsor 

18 and participant or beneficiary, a cost per claim, 

19 the fee structure or reimbursement model, and 

20 estimated cost per participant or beneficiary. 

21 ‘‘(2) SUPPLEMENTARY REPORTING FOR INTRA22 COMPANY PRESCRIPTION DRUG TRANSACTIONS.— 

23 ‘‘(A) IN GENERAL.—A health insurance 

24 issuer offering covered group health insurance 

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1 efit management services under a covered group 

2 health plan or covered group health insurance 

3 coverage shall submit, together with the report 

4 under paragraph (1), a supplementary report 

5 every 6 months to the plan sponsor that in6 cludes— 

7 ‘‘(i) an explanation of any benefit de8 sign parameters that encourage or require 

9 participants and beneficiaries in the plan 

10 or coverage to fill prescriptions at mail 

11 order, specialty, or retail pharmacies that 

12 are wholly or partially-owned by that issuer 

13 or entity providing pharmacy benefit man14 agement services under such plan or cov15 erage, including mandatory mail and spe16 cialty home delivery programs, retail and 

17 mail auto-refill programs, and copayment 

18 incentives funded by an entity providing 

19 pharmacy benefit management services; 

20 ‘‘(ii) the percentage of total prescrip21 tions charged to the plan, coverage, or par22 ticipants and beneficiaries in the plan or 

23 coverage, that were dispensed by mail 

24 order, specialty, or retail pharmacies that 

25 are wholly or partially-owned by the issuer 


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1 or entity providing pharmacy benefit man2 agement services; and 

3 ‘‘(iii) a list of all drugs dispensed by 

4 such wholly or partially-owned pharmacy 

5 and charged to the plan or coverage, or 

6 participants and beneficiaries of the plan 

7 or coverage, during the applicable quarter, 

8 and, with respect to each drug— 

9 ‘‘(I) the amounts charged, per 

10 dosage unit, per course of treatment, 

11 per 30-day supply, and per 90-day 

12 supply, with respect to participants 

13 and beneficiaries in the plan or cov14 erage, including amounts charged to 

15 the plan or coverage and amounts 

16 charged to the participants and bene17 ficiaries; 

18 ‘‘(II) the median amount charged 

19 to the plan or coverage, per dosage 

20 unit, per course of treatment, per 30- 

21 day supply, and per 90-day supply, in22 cluding amounts paid by the partici23 pants and beneficiaries, when the 

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1 tially-owned by the issuer or entity 

2 and that are included in the pharmacy 

3 network of that plan or coverage; 

4 ‘‘(III) the interquartile range of 

5 the costs, per dosage unit, per course 

6 of treatment, per 30-day supply, and 

7 per 90-day supply, including amounts 

8 paid by the participants and bene9 ficiaries, when the same drug is dis10 pensed by other pharmacies that are 

11 not wholly or partially-owned by the 

12 issuer or entity and that are included 

13 in the pharmacy network of that plan 

14 or coverage; 

15 ‘‘(IV) the lowest cost, per dosage 

16 unit, per course of treatment, per 30- 

17 day supply, and per 90-day supply, 

18 for such drug, including amounts 

19 charged to the plan or issuer and par20 ticipants and beneficiaries, that is 

21 available from any pharmacy included 

22 in the network of the plan or cov23 erage; 

24 ‘‘(V) the net acquisition cost per 

25 dosage unit and for a 30 day-supply, 


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1 and the acquisition cost per typical 

2 course of treatment, if the drug is 

3 subject to a maximum price discount; 

4 and 

5 ‘‘(VI) other information with re6 spect to the cost of the drug, as deter7 mined by the Secretary, such as aver8 age sales price, wholesale acquisition 

9 cost, and national average drug acqui10 sition cost per dosage unit, per typical 

11 course of treatment, or per 30-day 

12 supply, for such drug, including 

13 amounts charged to the plan or issuer 

14 and participants and beneficiaries 

15 among all pharmacies included in the 

16 network of the plan or coverage. 

17 ‘‘(B) PLANS AND COVERAGE OFFERED BY

18 SMALL EMPLOYERS.—A health insurance issuer 

19 offering covered group health insurance cov20 erage that is not covered group health insur21 ance coverage or an entity providing pharmacy 

22 benefit management services under a group 

23 health plan that is not a covered group health 

24 plan or under group health insurance coverage 

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1 erage that conducts transactions with a wholly 

2 or partially-owned pharmacy shall submit, to3 gether with the report under paragraph (1), a 

4 supplementary report every 6 months to the 

5 plan sponsor that includes the information de6 scribed in clauses (i) and (ii) of subparagraph 

7 (A). 

8 ‘‘(3) PRIVACY REQUIREMENTS.— 

9 ‘‘(A) RELATIONSHIP TO HIPAA REGULA10 TIONS.—Nothing in this section shall be con11 strued to modify the requirements for the cre12 ation, receipt, maintenance, or transmission of 

13 protected health information under the privacy, 

14 security, breach notification, and enforcement 

15 regulations in parts 160 and 164 of title 45, 

16 Code of Federal Regulations (or successor regu17 lations). 

18 ‘‘(B) REQUIREMENT.—A report submitted 

19 under paragraph (1) or (2) shall contain only 

20 summary health information, as defined in sec21 tion 164.504(a) of title 45, Code of Federal 

22 Regulations (or successor regulations). 

23 ‘‘(C) CLARIFICATION REGARDING CERTAIN

24 DISCLOSURES OF INFORMATION.— 


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1 ‘‘(i) REASONABLE RESTRICTIONS.— 

2 Nothing in this section prevents a health 

3 insurance issuer offering group health in4 surance coverage or an entity providing 

5 pharmacy benefit management services on 

6 behalf of a group health plan or group 

7 health insurance coverage from placing 

8 reasonable restrictions on the public disclo9 sure of the information contained in a re10 port under paragraph (1) or (2). 

11 ‘‘(ii) LIMITATIONS.—A health insur12 ance issuer offering group health insurance 

13 coverage or an entity providing pharmacy 

14 benefit management services on behalf of a 

15 group health plan or group health insur16 ance coverage may not restrict disclosure 

17 of such reports to the Department of 

18 Health and Human Services, the Depart19 ment of Labor, the Department of the 

20 Treasury, or any other Federal agency re21 sponsible for enforcement activities under 

22 this section for purposes of enforcement 

23 under this section or other applicable law, 

24 or to the Comptroller General of the 


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1 United States in accordance with para2 graph (6). 

3 ‘‘(4) USE AND DISCLOSURE BY PLAN SPON4 SORS.— 

5 ‘‘(A) PROHIBITION.—A plan sponsor may 

6 not— 

7 ‘‘(i) fail or refuse to hire, or dis8 charge, any employee, or otherwise dis9 criminate against any employee with re10 spect to the compensation, terms, condi11 tions, or privileges of employment of the 

12 employee, because of information sub13 mitted under paragraph (1) or (2) attrib14 uted to the employee or a dependent of the 

15 employee; or 

16 ‘‘(ii) limit, segregate, or classify the 

17 employees of the employer in any way that 

18 would deprive or tend to deprive any em19 ployee of employment opportunities or oth20 erwise adversely affect the status of the 

21 employee as an employee, because of infor22 mation submitted under paragraph (1) or 

23 (2) attributed to the employee or a depend24 ent of the employee. 


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1 ‘‘(B) DISCLOSURE AND REDISCLOSURE.— 

2 A plan sponsor shall not disclose the informa3 tion received under paragraph (1) or (2) ex4 cept— 

5 ‘‘(i) to an occupational or other health 

6 researcher if the research is conducted in 

7 compliance with the regulations and pro8 tections provided for under part 46 of title 

9 45, Code of Federal Regulations (or suc10 cessor regulations); 

11 ‘‘(ii) in response to an order of a 

12 court, except that the plan sponsor may 

13 disclose only the information expressly au14 thorized by such order; 

15 ‘‘(iii) to the Department of Health 

16 and Human Services, the Department of 

17 Labor, the Department of the Treasury, or 

18 other Federal agency responsible for en19 forcement activities under this section; or 

20 ‘‘(iv) to a contractor or agent for pur21 poses of health plan administration, if such 

22 contractor or agent agrees, in writing, to 

23 abide by the same use and disclosure re24 strictions as the plan sponsor. 


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1 ‘‘(C) RELATIONSHIP TO HIPAA REGULA2 TIONS.—With respect to the regulations pro3 mulgated by the Secretary of Health and 

4 Human Services under part C of title XI of the 

5 Social Security Act and section 264 of the 

6 Health Insurance Portability and Accountability 

7 Act of 1996, subparagraph (B) does not pro8 hibit a covered entity (as defined for purposes 

9 of such regulations) from any use or disclosure 

10 of health information that is authorized for the 

11 covered entity under such regulations. The pre12 vious sentence does not affect the authority of 

13 such Secretary to modify such regulations. 

14 ‘‘(D) ENFORCEMENT.— 

15 ‘‘(i) IN GENERAL.—The powers, pro16 cedures, and remedies provided in section 

17 207 of the Genetic Information Non18 discrimination Act to a person alleging a 

19 violation of title II of such Act shall be the 

20 powers, procedures, and remedies this sub21 paragraph provides for any person alleging 

22 a violation of this paragraph. 

23 ‘‘(ii) PROHIBITION AGAINST RETALIA24 TION.—No person shall discriminate 

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1 vidual has opposed any act or practice 

2 made unlawful by this paragraph or be3 cause such individual made a charge, testi4 fied, assisted, or participated in any man5 ner in an investigation, proceeding, or 

6 hearing under this paragraph. The rem7 edies and procedures otherwise provided 

8 for under this subparagraph shall be avail9 able to aggrieved individuals with respect 

10 to violations of this clause. 

11 ‘‘(5) ADDITIONAL REPORTING.— 

12 ‘‘(A) REPORTING WITH RESPECT TO

13 GROUP HEALTH PLANS OFFERED BY SMALL

14 EMPLOYERS.—For plan years beginning on or 

15 after January 1, 2025, not less frequently than 

16 annually, an entity providing pharmacy benefit 

17 management services on behalf of a group 

18 health plan that is not a covered group health 

19 plan shall submit to the plan sponsor of such 

20 group health plan a report in accordance with 

21 this paragraph, and make such report available 

22 to the plan sponsor in a machine-readable for23 mat, and such other formats as the Secretary, 

24 the Secretary of Health and Human Services, 

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1 mine. Each such report shall include, with re2 spect to the applicable group health plan, the 

3 information described in subparagraphs (A), 

4 (D), (E), (F), (G), and (H) of paragraph (1). 

5 ‘‘(B) OPT-IN FOR GROUP HEALTH INSUR6 ANCE COVERAGE.— 

7 ‘‘(i) IN GENERAL.—A plan sponsor 

8 may, on an annual basis, beginning with 

9 plan years beginning on or after January 

10 1, 2025, elect to require a health insurance 

11 issuer offering group health insurance cov12 erage to submit to such plan sponsor a re13 port in accordance with this subsection. 

14 ‘‘(ii) CONTENTS OF REPORTS.— 

15 ‘‘(I) COVERED GROUP HEALTH

16 INSURANCE COVERAGE.—In the case 

17 of an issuer that offers covered group 

18 health insurance coverage, a report 

19 provided pursuant to clause (i) shall 

20 include, with respect to the applicable 

21 covered group health insurance cov22 erage, the information required under 

23 paragraph (1) for covered group 

24 health plans. 


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1 ‘‘(II) OTHER GROUP HEALTH IN2 SURANCE COVERAGE.—In the case of 

3 an issuer that offers group health in4 surance coverage that is not covered 

5 group health insurance, a report pro6 vided pursuant to clause (i) shall in7 clude, with respect to the applicable 

8 group health insurance coverage, the 

9 information described in subpara10 graphs (A), (D), (E), (F), and (G) of 

11 paragraph (1). 

12 ‘‘(iii) APPLICATION.—For purposes of 

13 reports submitted in accordance with this 

14 subparagraph, paragraph (1) shall be ap15 plied by substituting ‘group health insur16 ance coverage’ or ‘health insurance issuer’, 

17 as applicable, for ‘group health plan’, 

18 ‘group plan’, and ‘plan’ where such terms 

19 appear in such paragraph. 

20 ‘‘(iv) REQUIRED REPORTING FOR ALL

21 GROUP HEALTH INSURANCE COVERAGE.— 

22 Each health insurance issuer of health in23 surance coverage shall annually submit the 

24 information described in paragraph (1)(H), 

25 regardless of whether the plan sponsor 


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1 made the election described in clause (i) 

2 for the applicable year. 

3 ‘‘(6) SUBMISSIONS TO GAO.—A health insur4 ance issuer offering group health insurance coverage 

5 or an entity providing pharmacy benefit manage6 ment services on behalf of a group health plan shall 

7 submit to the Comptroller General of the United 

8 States each of the first 2 reports submitted to a 

9 plan sponsor under paragraph (1) or (5) with re10 spect to such coverage or plan, and other such re11 ports as requested, in accordance with the privacy 

12 requirements under paragraph (3), and such other 

13 information that the Comptroller General determines 

14 necessary to carry out the study under section 2(f) 

15 of the Pharmacy Benefit Manager Reform Act. 

16 ‘‘(7) STANDARD FORMATS.— 

17 ‘‘(A) IN GENERAL.—Not later than June 

18 1, 2024, the Secretary, the Secretary of Labor, 

19 and the Secretary of the Treasury shall specify, 

20 through rulemaking, standard formats for 

21 health insurance issuers and entities providing 

22 pharmacy benefit management services to sub23 mit reports required under this subsection. 

24 ‘‘(B) LIMITED FORM OF REPORT.—The 

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1 retary of the Treasury shall define through 

2 rulemaking a limited form of the reports under 

3 paragraphs (1) and (2) required to be sub4 mitted to plan sponsors who also are drug man5 ufacturers, drug wholesalers, entities providing 

6 pharmacy benefit management services, or 

7 other direct participants in the drug supply 

8 chain, in order to prevent anti-competitive be9 havior. 

10 ‘‘(c) LIMITATIONS ON SPREAD PRICING.— 

11 ‘‘(1) IN GENERAL.—For plan years beginning 

12 on or after January 1, 2025, a group health plan or 

13 health insurance issuer offering group or individual 

14 health insurance coverage shall not charge partici15 pants and beneficiaries, and an entity providing 

16 pharmacy benefit management services under such a 

17 plan or coverage shall not charge the plan, issuer, or 

18 participants and beneficiaries, a price for a prescrip19 tion drug that exceeds the price paid to the phar20 macy for such drug, excluding penalties paid by the 

21 pharmacy (as described in paragraph (2)) to such 

22 plan, issuer, or entity. 

23 ‘‘(2) RULE OF CONSTRUCTION.—For purposes 

24 of paragraph (1), penalties paid by pharmacies in25 clude only the following: 


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1 ‘‘(A) A penalty paid if an original claim for 

2 a prescription drug was submitted fraudulently 

3 by the pharmacy to the plan, issuer, or entity. 

4 ‘‘(B) A penalty paid if the original claim 

5 payment made by the plan, issuer, or entity to 

6 the pharmacy was inconsistent with the reim7 bursement terms in any contract between the 

8 pharmacy and the plan, issuer, or entity. 

9 ‘‘(C) A penalty paid if the pharmacist serv10 ices billed to the plan, issuer, or entity were not 

11 rendered by the pharmacy. 

12 ‘‘(d) FULL REBATE PASS-THROUGH TO PLAN.— 

13 ‘‘(1) IN GENERAL.—For plan years beginning 

14 on or after January 1, 2025, a third-party adminis15 trator of a group health plan, a health insurance 

16 issuer offering group health insurance coverage, or 

17 an entity providing pharmacy benefit management 

18 services under such health plan or health insurance 

19 coverage shall— 

20 ‘‘(A) remit 100 percent of rebates, fees, al21 ternative discounts, and other remuneration re22 ceived from any applicable entity that are re23 lated to utilization of drugs under such health 

24 plan or health insurance coverage, to the group 

25 health plan; and 


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1 ‘‘(B) ensure that any contract entered into 

2 by such third-party administrator, health insur3 ance issuer, or entity providing pharmacy ben4 efit management services with an applicable en5 tity remit 100 percent of rebates, fees, alter6 native discounts, and other remuneration re7 ceived to the third-party administrator, health 

8 insurance issuer, or entity providing pharmacy 

9 benefit management services. 

10 ‘‘(2) FORM AND MANNER OF REMITTANCE.— 

11 Such rebates, fees, alternative discounts, and other 

12 remuneration shall be— 

13 ‘‘(A) remitted to the group health plan or 

14 group health insurance coverage in a timely 

15 fashion after the period for which such rebates, 

16 fees, alternative discounts, or other remunera17 tion is calculated, and in no case later than 90 

18 days after the end of such period; 

19 ‘‘(B) fully disclosed and enumerated to the 

20 group health plan sponsor, as described in para21 graphs (1) and (4) of subsection (b); 

22 ‘‘(C) available for audit by the plan spon23 sor, or a third-party designated by a plan spon24 sor not less than once per plan year; and 


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1 ‘‘(D) returned to the issuer or entity pro2 viding pharmaceutical benefit management 

3 services by the group health plan if audits by 

4 such issuer or entity indicate that the amounts 

5 received are incorrect after such amounts have 

6 been paid to the group health plan. 

7 ‘‘(3) AUDIT OF REBATE CONTRACTS.—A third8 party administrator of a group health plan, a health 

9 insurance issuer offering group health insurance cov10 erage, or an entity providing pharmacy benefit man11 agement services under such health plan or health 

12 insurance coverage shall make rebate contracts with 

13 rebate aggregators or drug manufacturers available 

14 for audit by such plan sponsor or designated third15 party, subject to confidentiality agreements to pre16 vent re-disclosure of such contracts. 

17 ‘‘(4) AUDITORS.—The applicable plan sponsor 

18 may select an auditor for purposes of carrying out 

19 audits under paragraphs (2)(C) and (3). 

20 ‘‘(5) RULE OF CONSTRUCTION.—Nothing in 

21 this subsection shall be construed to prohibit pay22 ments to entities offering pharmacy benefit manage23 ment services for bona fide services using a fee 

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1 vided that such fees are transparent to group health 

2 plans and health insurance issuers. 

3 ‘‘(e) ENFORCEMENT.— 

4 ‘‘(1) IN GENERAL.—The Secretary, in consulta5 tion with the Secretary of Labor and the Secretary 

6 of the Treasury, shall enforce this section. 

7 ‘‘(2) FAILURE TO PROVIDE TIMELY INFORMA8 TION.—A health insurance issuer or an entity pro9 viding pharmacy benefit management services that 

10 violates subsection (a) or fails to provide information 

11 required under subsection (b); a group health plan, 

12 health insurance issuer, or entity providing phar13 macy benefit management services that violates sub14 section (c); or a third-party administrator of a group 

15 health plan, a health insurance issuer offering group 

16 health insurance coverage, or an entity providing 

17 pharmacy benefit management services that violates 

18 subsection (d) shall be subject to a civil monetary 

19 penalty in the amount of $10,000 for each day dur20 ing which such violation continues or such informa21 tion is not disclosed or reported. 

22 ‘‘(3) FALSE INFORMATION.—A health insurance 

23 issuer, entity providing pharmacy benefit manage24 ment services, or drug manufacturer that knowingly 

25 provides false information under this section shall be 


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•S 1339 IS

1 subject to a civil money penalty in an amount not 

2 to exceed $100,000 for each item of false informa3 tion. Such civil money penalty shall be in addition to 

4 other penalties as may be prescribed by law. 

5 ‘‘(4) PROCEDURE.—The provisions of section 

6 1128A of the Social Security Act, other than sub7 sections (a) and (b) and the first sentence of sub8 section (c)(1) of such section shall apply to civil 

9 monetary penalties under this subsection in the 

10 same manner as such provisions apply to a penalty 

11 or proceeding under section 1128A of the Social Se12 curity Act. 

13 ‘‘(5) WAIVERS.—The Secretary may waive pen14 alties under paragraph (2), or extend the period of 

15 time for compliance with a requirement of this sec16 tion, for an entity in violation of this section that 

17 has made a good-faith effort to comply with this sec18 tion. 

19 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec20 tion shall be construed to permit a health insurance issuer, 

21 group health plan, or other entity to restrict disclosure to, 

22 or otherwise limit the access of, the Department of Health 

23 and Human Services to a report described in subsection 

24 (b)(1) or information related to compliance with sub25 section (a) by such issuer, plan, or entity. 


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1 ‘‘(g) DEFINITIONS.—In this section— 

2 ‘‘(1) the term ‘applicable entity’ means— 

3 ‘‘(A) a drug manufacturer, distributor, 

4 wholesaler, rebate aggregator (or other pur5 chasing entity designed to aggregate rebates), 

6 group purchasing organization, or associated 

7 third party; 

8 ‘‘(B) any subsidiary, parent, affiliate, or 

9 subcontractor of a group health plan, health in10 surance issuer, entity that provides pharmacy 

11 benefit management services on behalf of such 

12 a plan or issuer, or any entity described in sub13 paragraph (A); or 

14 ‘‘(C) such other entity as the Secretary, 

15 the Secretary of Labor, and the Secretary of 

16 the Treasury may specify through rulemaking; 

17 ‘‘(2) the term ‘covered group health insurance 

18 coverage’ means health insurance coverage offered in 

19 connection with a group health plan maintained by 

20 a large employer; 

21 ‘‘(3) the term ‘covered group health plan’ 

22 means a group health plan maintained by a large 

23 employer; 

24 ‘‘(4) the term ‘gross spending’, with respect to 

25 prescription drug benefits under a group health plan 


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1 or health insurance coverage, means the amount 

2 spent by a group health plan or health insurance 

3 issuer on prescription drug benefits, calculated be4 fore the application of manufacturer rebates, fees, 

5 alternative discounts, or other remuneration; 

6 ‘‘(5) the term ‘large employer’ means, in con7 nection with a group health plan with respect to a 

8 calendar year and a plan year, an employer who em9 ployed an average of at least 50 employees on busi10 ness days during the preceding calendar year and 

11 who employs at least 1 employee on the first day of 

12 the plan year; 

13 ‘‘(6) the term ‘net spending’, with respect to 

14 prescription drug benefits under a group health plan 

15 or health insurance coverage, means the amount 

16 spent by a group health plan or health insurance 

17 issuer on prescription drug benefits, calculated after 

18 the application of manufacturer rebates, fees, alter19 native discounts, or other remuneration; 

20 ‘‘(7) the term ‘plan sponsor’ has the meaning 

21 given such term in section 3(16)(B) of the Employee 

22 Retirement Income Security Act of 1974; 

23 ‘‘(8) the term ‘remuneration’ has the meaning 

24 given such term by the Secretary, the Secretary of 


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•S 1339 IS

1 Labor, and the Secretary of the Treasury, through 

2 notice and comment rulemaking; 

3 ‘‘(9) the term ‘small employer’ means, in con4 nection with a group health plan with respect to a 

5 calendar year and a plan year, an employer who em6 ployed an average of at least 1 but not more than 

7 49 employees on business days during the preceding 

8 calendar year and who employs at least 1 employee 

9 on the first day of the plan year; and 

10 ‘‘(10) the term ‘wholesale acquisition cost’ has 

11 the meaning given such term in section 

12 1847A(c)(6)(B) of the Social Security Act.’’; and 

13 (2) in section 2723 (42 U.S.C. 300gg–22)— 

14 (A) in subsection (a)— 

15 (i) in paragraph (1), by inserting 

16 ‘‘(other than section 2799A–11)’’ after 

17 ‘‘part D’’; and 

18 (ii) in paragraph (2), by inserting 

19 ‘‘(other than section 2799A–11)’’ after 

20 ‘‘part D’’; 

21 (B) in subsection (b)— 

22 (i) in paragraph (1), by inserting 

23 ‘‘(other than section 2799A–11)’’ after 

24 ‘‘part D’’; 


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1 (ii) in paragraph (2)(A), by inserting 

2 ‘‘(other than section 2799A–11)’’ after 

3 ‘‘part D’’; and 

4 (iii) in paragraph (2)(C)(ii), by insert5 ing ‘‘(other than section 2799A–11)’’ after 

6 ‘‘part D’’. 

7 (b) ERISA.— 

8 (1) IN GENERAL.—Subtitle B of title I of the 

9 Employee Retirement Income Security Act of 1974 

10 (29 U.S.C. 1021 et seq.) is amended— 

11 (A) in subpart B of part 7 (29 U.S.C. 

12 1185 et seq.), by adding at the end the fol13 lowing: 

14 ‘‘SEC. 726. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR15 MACY BENEFIT MANAGEMENT SERVICES. 

16 ‘‘(a) IN GENERAL.—For plan years beginning on or 

17 after January 1, 2025, a group health plan (or health in18 surance issuer offering group health insurance coverage 

19 in connection with such a plan) or an entity providing 

20 pharmacy benefit management services on behalf of such 

21 a plan or issuer shall not enter into a contract with an 

22 applicable entity that limits the disclosure of information 

23 to plan sponsors in such a manner that prevents the plan 

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1 ment services on behalf of a plan or issuer, from making 

2 the reports described in subsection (b). 

3 ‘‘(b) REPORTS.— 

4 ‘‘(1) IN GENERAL.—For plan years beginning 

5 on or after January 1, 2025, not less frequently 

6 than annually, an entity providing pharmacy benefit 

7 management services on behalf of a covered group 

8 health plan shall submit to the plan sponsor of such 

9 covered group health plan a report in accordance 

10 with this subsection and make such report available 

11 to the plan sponsor in a machine-readable format 

12 and, as the Secretary may determine, other formats. 

13 Each such report shall include, with respect to the 

14 covered group health plan— 

15 ‘‘(A) as applicable, information collected 

16 from drug manufacturers by such issuer or en17 tity on the total amount of copayment assist18 ance dollars paid, or copayment cards applied, 

19 that were funded by the drug manufacturer 

20 with respect to the participants and bene21 ficiaries in such plan; 

22 ‘‘(B) a list of each drug covered by such 

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1 porting period, including, with respect to each 

2 such drug during the reporting period— 

3 ‘‘(i) the brand name, generic or non4 proprietary name, and National Drug 

5 Code; 

6 ‘‘(ii) the number of participants and 

7 beneficiaries for whom the drug was billed 

8 during the reporting period, the total num9 ber of prescription claims for the drug (in10 cluding original prescriptions and refills), 

11 and the total number of dosage units of 

12 the drug dispensed across the reporting pe13 riod; 

14 ‘‘(iii) for each claim or dosage unit de15 scribed in clause (ii), the type of dis16 pensing channel used, such as retail, mail 

17 order, or specialty pharmacy; 

18 ‘‘(iv) the wholesale acquisition cost, 

19 listed as cost per days supply, cost per dos20 age unit, and cost per typical course of 

21 treatment (as applicable); 

22 ‘‘(v) the total out-of-pocket spending 

23 by participants and beneficiaries on such 

24 drug after application of any benefits 

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1 ticipant and beneficiary spending through 

2 copayments, coinsurance, and deductibles, 

3 but not including any amounts spent by 

4 participants and beneficiaries on drugs not 

5 covered under the plan or coverage or for 

6 which no claim is submitted to the plan or 

7 coverage; and 

8 ‘‘(vi) for any drug for which gross 

9 spending by the plan exceeded $10,000 

10 and that is one of the 50 prescription 

11 drugs for which the group health plan 

12 spent the most on prescription drug bene13 fits during the reporting period— 

14 ‘‘(I) a list of all other drugs in 

15 the same therapeutic class, including 

16 brand name drugs and biological 

17 products and generic drugs or bio18 similar biological products that are in 

19 the same therapeutic class as such 

20 drug; and 

21 ‘‘(II) if applicable, the rationale 

22 for preferred formulary placement of 

23 such drug in that therapeutic class, 

24 selected from a list of standard ra25 tionales established by the Secretary; 


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1 ‘‘(C) a list of each therapeutic class of 

2 drugs that were dispensed under the health 

3 plan during the reporting period, and, with re4 spect to each such therapeutic class of drugs, 

5 during the reporting period— 

6 ‘‘(i) total gross spending by the plan, 

7 before rebates, fees, alternative discounts, 

8 or other remuneration; 

9 ‘‘(ii) the number of participants and 

10 beneficiaries who filled a prescription for a 

11 drug in that class; 

12 ‘‘(iii) if applicable to that class, a de13 scription of the formulary tiers and utiliza14 tion management mechanisms (such as 

15 prior authorization or step therapy) em16 ployed for drugs in that class; 

17 ‘‘(iv) the total out-of-pocket spending 

18 by participants and beneficiaries, including 

19 participant and beneficiary spending 

20 through copayments, coinsurance, and 

21 deductibles; and 

22 ‘‘(v) for each therapeutic class under 

23 which 3 or more drugs are included on the 

24 formulary of such plan— 


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•S 1339 IS

1 ‘‘(I) the amount received, or ex2 pected to be received, by such entity, 

3 from an applicable entity, in rebates, 

4 fees, alternative discounts, or other 

5 remuneration that— 

6 ‘‘(aa) has been paid, or will 

7 be paid, by such an applicable 

8 entity for claims incurred during 

9 the reporting period; or 

10 ‘‘(bb) is related to utilization 

11 of drugs or drug spending; 

12 ‘‘(II) the total net spending by 

13 the health plan on that class of drugs; 

14 and 

15 ‘‘(III) the net price per typical 

16 course of treatment or 30-day supply 

17 incurred by the health plan and its 

18 participants and beneficiaries, after 

19 rebates, fees, alternative discounts, or 

20 other remuneration provided by an 

21 applicable entity, for drugs dispensed 

22 within such therapeutic class during 

23 the reporting period; 

24 ‘‘(D) total gross spending on prescription 

25 drugs by the plan during the reporting period, 


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•S 1339 IS

1 before rebates, fees, alternative discounts, or 

2 other remuneration provided by an applicable 

3 entity; 

4 ‘‘(E) the total amount received, or ex5 pected to be received, by the health plan, from 

6 an applicable entity, in rebates, fees, alternative 

7 discounts, and other remuneration received 

8 from any such entities, related to utilization of 

9 drug or drug spending under that health plan 

10 during the reporting period; 

11 ‘‘(F) the total net spending on prescription 

12 drugs by the health plan during the reporting 

13 period; 

14 ‘‘(G) amounts paid directly or indirectly in 

15 rebates, fees, or any other type of compensation 

16 (as defined in section 408(b)(2)(B)(ii)(dd)(AA)) 

17 to brokers, consultants, advisors, or any other 

18 individual or firm who referred the group health 

19 plan’s business to the pharmacy benefit man20 ager; and 

21 ‘‘(H) a summary document that includes 

22 such information described in subparagraphs 

23 (A) through (G) as the Secretary determines 

24 useful for plan sponsors for purposes of select25 ing pharmacy benefit management services, 


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•S 1339 IS

1 such as an estimated net price to plan sponsor 

2 and participant or beneficiary, a cost per claim, 

3 the fee structure or reimbursement model, and 

4 estimated cost per participant or beneficiary. 

5 ‘‘(2) SUPPLEMENTARY REPORTING FOR INTRA6 COMPANY PRESCRIPTION DRUG TRANSACTIONS.— 

7 ‘‘(A) IN GENERAL.—A health insurance 

8 issuer offering covered group health insurance 

9 coverage or an entity providing pharmacy ben10 efit management services under a covered group 

11 health plan or covered group health insurance 

12 coverage shall submit, together with the report 

13 under paragraph (1), a supplementary report 

14 every 6 months to the plan sponsor that in15 cludes— 

16 ‘‘(i) an explanation of any benefit de17 sign parameters that encourage or require 

18 participants and beneficiaries in the plan 

19 or coverage to fill prescriptions at mail 

20 order, specialty, or retail pharmacies that 

21 are wholly or partially-owned by that issuer 

22 or entity providing pharmacy benefit man23 agement services under such plan or cov24 erage, including mandatory mail and spe25 cialty home delivery programs, retail and 


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•S 1339 IS

1 mail auto-refill programs, and copayment 

2 incentives funded by an entity providing 

3 pharmacy benefit management services; 

4 ‘‘(ii) the percentage of total prescrip5 tions charged to the plan, coverage, or par6 ticipants and beneficiaries in the plan or 

7 coverage, that were dispensed by mail 

8 order, specialty, or retail pharmacies that 

9 are wholly or partially-owned by the issuer 

10 or entity providing pharmacy benefit man11 agement services; and 

12 ‘‘(iii) a list of all drugs dispensed by 

13 such wholly or partially-owned pharmacy 

14 and charged to the plan or coverage, or 

15 participants and beneficiaries of the plan 

16 or coverage, during the applicable quarter, 

17 and, with respect to each drug— 

18 ‘‘(I) the amounts charged, per 

19 dosage unit, per course of treatment, 

20 per 30-day supply, and per 90-day 

21 supply, with respect to participants 

22 and beneficiaries in the plan or cov23 erage, including amounts charged to 

24 the plan or coverage and amounts 


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•S 1339 IS

1 charged to the participants and bene2 ficiaries; 

3 ‘‘(II) the median amount charged 

4 to the plan or coverage, per dosage 

5 unit, per course of treatment, per 30- 

6 day supply, and per 90-day supply, in7 cluding amounts paid by the partici8 pants and beneficiaries, when the 

9 same drug is dispensed by other phar10 macies that are not wholly or par11 tially-owned by the issuer or entity 

12 and that are included in the pharmacy 

13 network of that plan or coverage; 

14 ‘‘(III) the interquartile range of 

15 the costs, per dosage unit, per course 

16 of treatment, per 30-day supply, and 

17 per 90-day supply, including amounts 

18 paid by the participants and bene19 ficiaries, when the same drug is dis20 pensed by other pharmacies that are 

21 not wholly or partially-owned by the 

22 issuer or entity and that are included 

23 in the pharmacy network of that plan 

24 or coverage; 


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•S 1339 IS

1 ‘‘(IV) the lowest cost, per dosage 

2 unit, per course of treatment, per 30- 

3 day supply, and per 90-day supply, 

4 for such drug, including amounts 

5 charged to the plan or issuer and par6 ticipants and beneficiaries, that is 

7 available from any pharmacy included 

8 in the network of the plan or cov9 erage; 

10 ‘‘(V) the net acquisition cost per 

11 dosage unit and for a 30 day-supply, 

12 and the acquisition cost per typical 

13 course of treatment, if the drug is 

14 subject to a maximum price discount; 

15 and 

16 ‘‘(VI) other information with re17 spect to the cost of the drug, as deter18 mined by the Secretary, such as aver19 age sales price, wholesale acquisition 

20 cost, and national average drug acqui21 sition cost per dosage unit, per typical 

22 course of treatment, or per 30-day 

23 supply, for such drug, including 

24 amounts charged to the plan or issuer 

25 and participants and beneficiaries 


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•S 1339 IS

1 among all pharmacies included in the 

2 network of the plan or coverage. 

3 ‘‘(B) PLANS AND COVERAGE OFFERED BY

4 SMALL EMPLOYERS.—A health insurance issuer 

5 offering covered group health insurance cov6 erage that is not covered group health insur7 ance coverage or an entity providing pharmacy 

8 benefit management services under a group 

9 health plan that is not a covered group health 

10 plan or under group health insurance coverage 

11 that is not covered group health insurance cov12 erage that conducts transactions with a wholly 

13 or partially-owned pharmacy shall submit, to14 gether with the report under paragraph (1), a 

15 supplementary report every 6 months to the 

16 plan sponsor that includes the information de17 scribed in clauses (i) and (ii) of subparagraph 

18 (A). 

19 ‘‘(3) PRIVACY REQUIREMENTS.— 

20 ‘‘(A) RELATIONSHIP TO HIPAA REGULA21 TIONS.—Nothing in this section shall be con22 strued to modify the requirements for the cre23 ation, receipt, maintenance, or transmission of 

24 protected health information under the privacy, 

25 security, breach notification, and enforcement 


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1 regulations in parts 160 and 164 of title 45, 

2 Code of Federal Regulations (or successor regu3 lations). 

4 ‘‘(B) REQUIREMENT.—A report submitted 

5 under paragraph (1) or (2) shall contain only 

6 summary health information, as defined in sec7 tion 164.504(a) of title 45, Code of Federal 

8 Regulations (or successor regulations). 

9 ‘‘(C) CLARIFICATION REGARDING CERTAIN

10 DISCLOSURES OF INFORMATION.— 

11 ‘‘(i) REASONABLE RESTRICTIONS.— 

12 Nothing in this section prevents a health 

13 insurance issuer offering group health in14 surance coverage or an entity providing 

15 pharmacy benefit management services on 

16 behalf of a group health plan or group 

17 health insurance coverage from placing 

18 reasonable restrictions on the public disclo19 sure of the information contained in a re20 port under paragraph (1) or (2). 

21 ‘‘(ii) LIMITATIONS.—A health insur22 ance issuer offering group health insurance 

23 coverage or an entity providing pharmacy 

24 benefit management services on behalf of a 

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1 ance coverage may not restrict disclosure 

2 of such reports to the Department of 

3 Health and Human Services, the Depart4 ment of Labor, the Department of the 

5 Treasury, or any other Federal agency re6 sponsible for enforcement activities under 

7 this section for purposes of enforcement 

8 under this section or other applicable law, 

9 or to the Comptroller General of the 

10 United States in accordance with para11 graph (6). 

12 ‘‘(4) USE AND DISCLOSURE BY PLAN SPON13 SORS.— 

14 ‘‘(A) PROHIBITION.—A plan sponsor may 

15 not— 

16 ‘‘(i) fail or refuse to hire, or dis17 charge, any employee, or otherwise dis18 criminate against any employee with re19 spect to the compensation, terms, condi20 tions, or privileges of employment of the 

21 employee, because of information sub22 mitted under paragraph (1) or (2) attrib23 uted to the employee or a dependent of the 

24 employee; or 


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•S 1339 IS

1 ‘‘(ii) limit, segregate, or classify the 

2 employees of the employer in any way that 

3 would deprive or tend to deprive any em4 ployee of employment opportunities or oth5 erwise adversely affect the status of the 

6 employee as an employee, because of infor7 mation submitted under paragraph (1) or 

8 (2) attributed to the employee or a depend9 ent of the employee. 

10 ‘‘(B) DISCLOSURE AND REDISCLOSURE.— 

11 A plan sponsor shall not disclose the informa12 tion received under paragraph (1) or (2) ex13 cept— 

14 ‘‘(i) to an occupational or other health 

15 researcher if the research is conducted in 

16 compliance with the regulations and pro17 tections provided for under part 46 of title 

18 45, Code of Federal Regulations (or suc19 cessor regulations); 

20 ‘‘(ii) in response to an order of a 

21 court, except that the plan sponsor may 

22 disclose only the information expressly au23 thorized by such order; 

24 ‘‘(iii) to the Department of Health 

25 and Human Services, the Department of 


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•S 1339 IS

1 Labor, the Department of the Treasury, or 

2 other Federal agency responsible for en3 forcement activities under this section; or 

4 ‘‘(iv) to a contractor or agent for pur5 poses of health plan administration, if such 

6 contractor or agent agrees, in writing, to 

7 abide by the same use and disclosure re8 strictions as the plan sponsor. 

9 ‘‘(C) RELATIONSHIP TO HIPAA REGULA10 TIONS.—With respect to the regulations pro11 mulgated by the Secretary of Health and 

12 Human Services under part C of title XI of the 

13 Social Security Act (42 U.S.C. 1320d et seq.) 

14 and section 264 of the Health Insurance Port15 ability and Accountability Act of 1996 (42 

16 U.S.C. 1320d–2), subparagraph (B) does not 

17 prohibit a covered entity (as defined for pur18 poses of such regulations) from any use or dis19 closure of health information that is authorized 

20 for the covered entity under such regulations. 

21 The previous sentence does not affect the au22 thority of such Secretary to modify such regula23 tions. 

24 ‘‘(D) ENFORCEMENT.— 


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1 ‘‘(i) IN GENERAL.—The powers, pro2 cedures, and remedies provided in section 

3 207 of the Genetic Information Non4 discrimination Act (42 U.S.C. 2000ff–6) to 

5 a person alleging a violation of title II of 

6 such Act shall be the powers, procedures, 

7 and remedies this subparagraph provides 

8 for any person alleging a violation of this 

9 paragraph. 

10 ‘‘(ii) PROHIBITION AGAINST RETALIA11 TION.—No person shall discriminate 

12 against any individual because such indi13 vidual has opposed any act or practice 

14 made unlawful by this paragraph or be15 cause such individual made a charge, testi16 fied, assisted, or participated in any man17 ner in an investigation, proceeding, or 

18 hearing under this paragraph. The rem19 edies and procedures otherwise provided 

20 for under this subparagraph shall be avail21 able to aggrieved individuals with respect 

22 to violations of this clause. 

23 ‘‘(5) ADDITIONAL REPORTING.— 

24 ‘‘(A) REPORTING WITH RESPECT TO

25 GROUP HEALTH PLANS OFFERED BY SMALL


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•S 1339 IS

1 EMPLOYERS.—For plan years beginning on or 

2 after January 1, 2025, not less frequently than 

3 annually, an entity providing pharmacy benefit 

4 management services on behalf of a group 

5 health plan that is not a covered group health 

6 plan shall submit to the plan sponsor of such 

7 group health plan a report in accordance with 

8 this paragraph, and make such report available 

9 to the plan sponsor in a machine-readable for10 mat, and such other formats as the Secretary, 

11 the Secretary of Health and Human Services, 

12 and the Secretary of Labor may determine. 

13 Each such report shall include, with respect to 

14 the applicable group health plan, the informa15 tion described in subparagraphs (A), (D), (E), 

16 (F), (G), and (H) of paragraph (1). 

17 ‘‘(B) OPT-IN FOR GROUP HEALTH INSUR18 ANCE COVERAGE.— 

19 ‘‘(i) IN GENERAL.—A plan sponsor 

20 may, on an annual basis, beginning with 

21 plan years beginning on or after January 

22 1, 2025, elect to require a health insurance 

23 issuer offering group health insurance cov24 erage to submit to such plan sponsor a re25 port in accordance with this subsection. 


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•S 1339 IS

1 ‘‘(ii) CONTENTS OF REPORTS.— 

2 ‘‘(I) COVERED GROUP HEALTH

3 INSURANCE COVERAGE.—In the case 

4 of an issuer that offers covered group 

5 health insurance coverage, a report 

6 provided pursuant to clause (i) shall 

7 include, with respect to the applicable 

8 covered group health insurance cov9 erage, the information required under 

10 paragraph (1) for covered group 

11 health plans. 

12 ‘‘(II) OTHER GROUP HEALTH IN13 SURANCE COVERAGE.—In the case of 

14 an issuer that offers group health in15 surance coverage that is not covered 

16 group health insurance, a report pro17 vided pursuant to clause (i) shall in18 clude, with respect to the applicable 

19 group health insurance coverage, the 

20 information described in subpara21 graphs (A), (D), (E), (F), and (G) of 

22 paragraph (1). 

23 ‘‘(iii) APPLICATION.—For purposes of 

24 reports submitted in accordance with this 

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•S 1339 IS

1 plied by substituting ‘group health insur2 ance coverage’ or ‘health insurance issuer’, 

3 as applicable, for ‘group health plan’, 

4 ‘group plan’, and ‘plan’ where such terms 

5 appear in such paragraph. 

6 ‘‘(iv) REQUIRED REPORTING FOR ALL

7 GROUP HEALTH INSURANCE COVERAGE.— 

8 Each health insurance issuer of health in9 surance coverage shall annually submit the 

10 information described in paragraph (1)(H), 

11 regardless of whether the plan sponsor 

12 made the election described in clause (i) 

13 for the applicable year. 

14 ‘‘(6) SUBMISSIONS TO GAO.—A health insur15 ance issuer offering group health insurance coverage 

16 or an entity providing pharmacy benefit manage17 ment services on behalf of a group health plan shall 

18 submit to the Comptroller General of the United 

19 States each of the first 2 reports submitted to a 

20 plan sponsor under paragraph (1) or (5) with re21 spect to such coverage or plan, and other such re22 ports as requested, in accordance with the privacy 

23 requirements under paragraph (3), and such other 

24 information that the Comptroller General determines 


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•S 1339 IS

1 necessary to carry out the study under section 2(f) 

2 of the Pharmacy Benefit Manager Reform Act. 

3 ‘‘(7) STANDARD FORMATS.— 

4 ‘‘(A) IN GENERAL.—Not later than June 

5 1, 2024, the Secretary, the Secretary of Health 

6 and Human Services, and the Secretary of the 

7 Treasury shall specify, through rulemaking, 

8 standard formats for health insurance issuers 

9 and entities providing pharmacy benefit man10 agement services to submit reports required 

11 under this subsection. 

12 ‘‘(B) LIMITED FORM OF REPORT.—The 

13 Secretary, the Secretary of Health and Human 

14 Services, and the Secretary of the Treasury 

15 shall define through rulemaking a limited form 

16 of the reports under paragraphs (1) and (2) re17 quired to be submitted to plan sponsors who 

18 also are drug manufacturers, drug wholesalers, 

19 entities providing pharmacy benefit manage20 ment services, or other direct participants in 

21 the drug supply chain, in order to prevent anti22 competitive behavior. 

23 ‘‘(c) LIMITATIONS ON SPREAD PRICING.— 

24 ‘‘(1) IN GENERAL.—For plan years beginning 

25 on or after January 1, 2025, a group health plan or 


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1 health insurance issuer offering group health insur2 ance coverage shall not charge participants and 

3 beneficiaries, and an entity providing pharmacy ben4 efit management services under such a plan or cov5 erage shall not charge the plan, issuer, or partici6 pants and beneficiaries, a price for a prescription 

7 drug that exceeds the price paid to the pharmacy for 

8 such drug, excluding penalties paid by the pharmacy 

9 (as described in paragraph (2)) to such plan, issuer, 

10 or entity. 

11 ‘‘(2) RULE OF CONSTRUCTION.—For purposes 

12 of paragraph (1), penalties paid by pharmacies in13 clude only the following: 

14 ‘‘(A) A penalty paid if an original claim for 

15 a prescription drug was submitted fraudulently 

16 by the pharmacy to the plan, issuer, or entity. 

17 ‘‘(B) A penalty paid if the original claim 

18 payment made by the plan, issuer, or entity to 

19 the pharmacy was inconsistent with the reim20 bursement terms in any contract between the 

21 pharmacy and the plan, issuer, or entity. 

22 ‘‘(C) A penalty paid if the pharmacist serv23 ices billed to the plan, issuer, or entity were not 

24 rendered by the pharmacy. 

25 ‘‘(d) FULL REBATE PASS-THROUGH TO PLAN.— 


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1 ‘‘(1) IN GENERAL.—For plan years beginning 

2 on or after January 1, 2025, a third-party adminis3 trator of a group health plan, a health insurance 

4 issuer offering group health insurance coverage, or 

5 an entity providing pharmacy benefit management 

6 services under such health plan or health insurance 

7 coverage shall— 

8 ‘‘(A) remit 100 percent of rebates, fees, al9 ternative discounts, and other applicable remu10 neration received from any applicable entity 

11 that are related to utilization of drugs under 

12 such health plan or health insurance coverage, 

13 to the group health plan; and 

14 ‘‘(B) ensure that any contract entered into 

15 by such third-party administrator, health insur16 ance issuer, or entity providing pharmacy ben17 efit management services with an applicable en18 tity remit 100 percent of rebates, fees, alter19 native discounts, and other remuneration re20 ceived to the third-party administrator, health 

21 insurance issuer, or entity providing pharmacy 

22 benefit management services. 

23 ‘‘(2) FORM AND MANNER OF REMITTANCE.— 

24 Such rebates, fees, alternative discounts, and other 

25 remuneration shall be— 


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1 ‘‘(A) remitted to the group health plan or 

2 group health insurance coverage in a timely 

3 fashion after the period for which such rebates, 

4 fees, alternative discounts, or other remunera5 tion is calculated, and in no case later than 90 

6 days after the end of such period; 

7 ‘‘(B) fully disclosed and enumerated to the 

8 group health plan sponsor, as described in para9 graphs (1) and (4) of subsection (b); 

10 ‘‘(C) available for audit by the plan spon11 sor, or a third-party designated by a plan spon12 sor not less than once per plan year; and 

13 ‘‘(D) returned to the issuer or entity pro14 viding pharmaceutical benefit management 

15 services by the group health plan if audits by 

16 such issuer or entity indicate that the amounts 

17 received are incorrect after such amounts have 

18 been paid to the group health plan. 

19 ‘‘(3) AUDIT OF REBATE CONTRACTS.—A third20 party administrator of a group health plan, a health 

21 insurance issuer offering group health insurance cov22 erage, or an entity providing pharmacy benefit man23 agement services under such health plan or health 

24 insurance coverage shall make rebate contracts with 

25 rebate aggregators or drug manufacturers available 


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•S 1339 IS

1 for audit by such plan sponsor or designated third2 party, subject to confidentiality agreements to pre3 vent re-disclosure of such contracts. 

4 ‘‘(4) AUDITORS.—The applicable plan sponsor 

5 may select an auditor for purposes of carrying out 

6 audits under paragraphs (2)(C) and (3). 

7 ‘‘(5) RULE OF CONSTRUCTION.—Nothing in 

8 this subsection shall be construed to prohibit pay9 ments to entities offering pharmacy benefit manage10 ment services for bona fide services using a fee 

11 structure not contemplated by this subsection, pro12 vided that such fees are transparent to group health 

13 plans and health insurance issuers. 

14 ‘‘(e) ENFORCEMENT.— 

15 ‘‘(1) IN GENERAL.—The Secretary, in consulta16 tion with the Secretary of Health and Human Serv17 ices and the Secretary of the Treasury, shall enforce 

18 this section. 

19 ‘‘(2) FAILURE TO PROVIDE TIMELY INFORMA20 TION.—A health insurance issuer or an entity pro21 viding pharmacy benefit management services that 

22 violates subsection (a) or fails to provide information 

23 required under subsection (b); a group health plan, 

24 health insurance issuer, or entity providing phar25 macy benefit management services that violates subVerDate Sep 11 2014 22:24 Apr 27, 2023 Jkt 039200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 E:\BILLS\S1339.IS S1339

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1 section (c); or a third-party administrator of a group 

2 health plan, a health insurance issuer offering group 

3 health insurance coverage, or an entity providing 

4 pharmacy benefit management services that violates 

5 subsection (d) shall be subject to a civil monetary 

6 penalty in the amount of $10,000 for each day dur7 ing which such violation continues or such informa8 tion is not disclosed or reported. 

9 ‘‘(3) FALSE INFORMATION.—A health insurance 

10 issuer, entity providing pharmacy benefit manage11 ment services, or drug manufacturer that knowingly 

12 provides false information under this section shall be 

13 subject to a civil money penalty in an amount not 

14 to exceed $100,000 for each item of false informa15 tion. Such civil money penalty shall be in addition to 

16 other penalties as may be prescribed by law. 

17 ‘‘(4) PROCEDURE.—The provisions of section 

18 1128A of the Social Security Act, other than sub19 sections (a) and (b) and the first sentence of sub20 section (c)(1) of such section shall apply to civil 

21 monetary penalties under this subsection in the 

22 same manner as such provisions apply to a penalty 

23 or proceeding under section 1128A of the Social Se24 curity Act. 


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1 ‘‘(5) WAIVERS.—The Secretary may waive pen2 alties under paragraph (2), or extend the period of 

3 time for compliance with a requirement of this sec4 tion, for an entity in violation of this section that 

5 has made a good-faith effort to comply with this sec6 tion. 

7 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec8 tion shall be construed to permit a health insurance issuer, 

9 group health plan, or other entity to restrict disclosure to, 

10 or otherwise limit the access of, the Department of Labor 

11 to a report described in subsection (b)(1) or information 

12 related to compliance with subsection (a) by such issuer, 

13 plan, or entity. 

14 ‘‘(g) DEFINITIONS.—In this section— 

15 ‘‘(1) the term ‘applicable entity’ means— 

16 ‘‘(A) a drug manufacturer, distributor, 

17 wholesaler, rebate aggregator (or other pur18 chasing entity designed to aggregate rebates), 

19 group purchasing organization, or associated 

20 third party; 

21 ‘‘(B) any subsidiary, parent, affiliate, or 

22 subcontractor of a group health plan, health in23 surance issuer, entity that provides pharmacy 

24 benefit management services on behalf of such 


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1 a plan or issuer, or any entity described in sub2 paragraph (A); or 

3 ‘‘(C) such other entity as the Secretary, 

4 the Secretary of Health and Human Services, 

5 and the Secretary of the Treasury may specify 

6 through rulemaking; 

7 ‘‘(2) the term ‘covered group health insurance 

8 coverage’ means health insurance coverage offered in 

9 connection with a group health plan maintained by 

10 a large employer; 

11 ‘‘(3) the term ‘covered group health plan’ 

12 means a group health plan maintained by a large 

13 employer; 

14 ‘‘(4) the term ‘gross spending’, with respect to 

15 prescription drug benefits under a group health plan 

16 or health insurance coverage, means the amount 

17 spent by a group health plan or health insurance 

18 issuer on prescription drug benefits, calculated be19 fore the application of manufacturer rebates, fees, 

20 alternative discounts, or other remuneration; 

21 ‘‘(5) the term ‘large employer’ means, in con22 nection with a group health plan with respect to a 

23 calendar year and a plan year, an employer who em24 ployed an average of at least 50 employees on busi25 ness days during the preceding calendar year and 


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1 who employs at least 1 employee on the first day of 

2 the plan year; 

3 ‘‘(6) the term ‘net spending’, with respect to 

4 prescription drug benefits under a group health plan 

5 or health insurance coverage, means the amount 

6 spent by a group health plan or health insurance 

7 issuer on prescription drug benefits, calculated after 

8 the application of manufacturer rebates, fees, alter9 native discounts, or other remuneration; 

10 ‘‘(7) the term ‘plan sponsor’ has the meaning 

11 given such term in section 3(16)(B); 

12 ‘‘(8) the term ‘remuneration’ has the meaning 

13 given such term by the Secretary, the Secretary of 

14 Health and Human Services, and the Secretary of 

15 the Treasury, through notice and comment rule16 making; 

17 ‘‘(9) the term ‘small employer’ means, in con18 nection with a group health plan with respect to a 

19 calendar year and a plan year, an employer who em20 ployed an average of at least 1 but not more than 

21 49 employees on business days during the preceding 

22 calendar year and who employs at least 1 employee 

23 on the first day of the plan year; and 

24 ‘‘(10) the term ‘wholesale acquisition cost’ has 

25 the meaning given such term in section 


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1 1847A(c)(6)(B) of the Social Security Act (42 

2 U.S.C. 1395w–3a(c)(6)(B)).’’; and 

3 (B) in section 502(b)(3) (29 U.S.C. 

4 1132(b)(3)), by inserting ‘‘(other than section 

5 726)’’ after ‘‘part 7’’. 

6 (2) CLERICAL AMENDMENT.—The table of con7 tents in section 1 of the Employee Retirement In8 come Security Act of 1974 (29 U.S.C. 1001 et seq.) 

9 is amended by inserting after the item relating to 

10 section 725 the following new item: 

‘‘Sec. 726. Oversight of entities that provide pharmacy benefit management 

services.’’. 

11 (c) INTERNAL REVENUE CODE.— 

12 (1) IN GENERAL.—Subchapter B of chapter 

13 100 of the Internal Revenue Code of 1986 is amend14 ed by adding at the end the following: 

15 ‘‘SEC. 9826. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR16 MACY BENEFIT MANAGEMENT SERVICES. 

17 ‘‘(a) IN GENERAL.—For plan years beginning on or 

18 after January 1, 2025, a group health plan or an entity 

19 providing pharmacy benefit management services on be20 half of such a plan shall not enter into a contract with 

21 an applicable entity that limits the disclosure of informa22 tion to plan sponsors in such a manner that prevents the 

23 plan, or an entity providing pharmacy benefit management 


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1 services on behalf of a plan, from making the reports de2 scribed in subsection (b). 

3 ‘‘(b) REPORTS.— 

4 ‘‘(1) IN GENERAL.—For plan years beginning 

5 on or after January 1, 2025, not less frequently 

6 than annually, an entity providing pharmacy benefit 

7 management services on behalf of a covered group 

8 health plan shall submit to the plan sponsor of such 

9 covered group health plan a report in accordance 

10 with this subsection and make such report available 

11 to the plan sponsor in a machine-readable format 

12 and, as the Secretary may determine, other formats. 

13 Each such report shall include, with respect to the 

14 covered group health plan— 

15 ‘‘(A) as applicable, information collected 

16 from drug manufacturers by such entity on the 

17 total amount of copayment assistance dollars 

18 paid, or copayment cards applied, that were 

19 funded by the drug manufacturer with respect 

20 to the participants and beneficiaries in such 

21 plan; 

22 ‘‘(B) a list of each drug covered by such 

23 plan or entity providing pharmacy benefit man24 agement services that was billed during the reVerDate Sep 11 2014 22:24 Apr 27, 2023 Jkt 039200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\S1339.IS S1339

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1 porting period, including, with respect to each 

2 such drug during the reporting period— 

3 ‘‘(i) the brand name, generic or non4 proprietary name, and National Drug 

5 Code; 

6 ‘‘(ii) the number of participants and 

7 beneficiaries for whom the drug was billed 

8 during the reporting period, the total num9 ber of prescription claims for the drug (in10 cluding original prescriptions and refills), 

11 and the total number of dosage units of 

12 the drug dispensed across the reporting pe13 riod; 

14 ‘‘(iii) for each claim or dosage unit de15 scribed in clause (ii), the type of dis16 pensing channel used, such as retail, mail 

17 order, or specialty pharmacy; 

18 ‘‘(iv) the wholesale acquisition cost, 

19 listed as cost per days supply, cost per dos20 age unit, and cost per typical course of 

21 treatment (as applicable); 

22 ‘‘(v) the total out-of-pocket spending 

23 by participants and beneficiaries on such 

24 drug after application of any benefits 

25 under the plan, including participant and 


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1 beneficiary spending through copayments, 

2 coinsurance, and deductibles, but not in3 cluding any amounts spent by participants 

4 and beneficiaries on drugs not covered 

5 under the plan or for which no claim is 

6 submitted to the plan; and 

7 ‘‘(vi) for any drug for which gross 

8 spending by the plan exceeded $10,000 

9 and that is one of the 50 prescription 

10 drugs for which the group health plan 

11 spent the most on prescription drug bene12 fits during the reporting period— 

13 ‘‘(I) a list of all other drugs in 

14 the same therapeutic class, including 

15 brand name drugs and biological 

16 products and generic drugs or bio17 similar biological products that are in 

18 the same therapeutic class as such 

19 drug; and 

20 ‘‘(II) if applicable, the rationale 

21 for preferred formulary placement of 

22 such drug in that therapeutic class, 

23 selected from a list of standard ra24 tionales established by the Secretary; 


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1 ‘‘(C) a list of each therapeutic class of 

2 drugs that were dispensed under the health 

3 plan during the reporting period, and, with re4 spect to each such therapeutic class of drugs, 

5 during the reporting period— 

6 ‘‘(i) total gross spending by the plan, 

7 before rebates, fees, alternative discounts, 

8 or other remuneration; 

9 ‘‘(ii) the number of participants and 

10 beneficiaries who filled a prescription for a 

11 drug in that class; 

12 ‘‘(iii) if applicable to that class, a de13 scription of the formulary tiers and utiliza14 tion management mechanisms (such as 

15 prior authorization or step therapy) em16 ployed for drugs in that class; 

17 ‘‘(iv) the total out-of-pocket spending 

18 by participants and beneficiaries, including 

19 participant and beneficiary spending 

20 through copayments, coinsurance, and 

21 deductibles; and 

22 ‘‘(v) for each therapeutic class under 

23 which 3 or more drugs are included on the 

24 formulary of such plan— 


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1 ‘‘(I) the amount received, or ex2 pected to be received, by such entity, 

3 from an applicable entity, in rebates, 

4 fees, alternative discounts, or other 

5 remuneration that— 

6 ‘‘(aa) has been paid, or will 

7 be paid, by such an applicable 

8 entity for claims incurred during 

9 the reporting period; or 

10 ‘‘(bb) is related to utilization 

11 of drugs or drug spending; 

12 ‘‘(II) the total net spending by 

13 the health plan on that class of drugs; 

14 and 

15 ‘‘(III) the net price per typical 

16 course of treatment or 30-day supply 

17 incurred by the health plan and its 

18 participants and beneficiaries, after 

19 rebates, fees, alternative discounts, or 

20 other remuneration provided by an 

21 applicable entity, for drugs dispensed 

22 within such therapeutic class during 

23 the reporting period; 

24 ‘‘(D) total gross spending on prescription 

25 drugs by the plan during the reporting period, 


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1 before rebates, fees, alternative discounts, or 

2 other remuneration provided by an applicable 

3 entity; 

4 ‘‘(E) the total amount received, or ex5 pected to be received, by the health plan, from 

6 an applicable entity, in rebates, fees, alternative 

7 discounts, and other remuneration received 

8 from any such entities, related to utilization of 

9 drug or drug spending under that health plan 

10 during the reporting period; 

11 ‘‘(F) the total net spending on prescription 

12 drugs by the health plan during the reporting 

13 period; 

14 ‘‘(G) amounts paid directly or indirectly in 

15 rebates, fees, or any other type of compensation 

16 (as defined in section 408(b)(2)(B)(ii)(dd)(AA) 

17 of the Employee Retirement Income Security 

18 Act of 1974 (29 U.S.C. 

19 1108(b)(2)(B)(ii)(dd)(A))) to brokers, consult20 ants, advisors, or any other individual or firm 

21 who referred the group health plan’s business to 

22 the pharmacy benefit manager; and 

23 ‘‘(H) a summary document that includes 

24 such information described in subparagraphs 

25 (A) through (G) as the Secretary determines 


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1 useful for plan sponsors for purposes of select2 ing pharmacy benefit management services, 

3 such as an estimated net price to plan sponsor 

4 and participant or beneficiary, a cost per claim, 

5 the fee structure or reimbursement model, and 

6 estimated cost per participant or beneficiary. 

7 ‘‘(2) SUPPLEMENTARY REPORTING FOR INTRA8 COMPANY PRESCRIPTION DRUG TRANSACTIONS.— 

9 ‘‘(A) IN GENERAL.—An entity providing 

10 pharmacy benefit management services under a 

11 covered group health plan shall submit, to12 gether with the report under paragraph (1), a 

13 supplementary report every 6 months to the 

14 plan sponsor that includes— 

15 ‘‘(i) an explanation of any benefit de16 sign parameters that encourage or require 

17 participants and beneficiaries in the plan 

18 to fill prescriptions at mail order, specialty, 

19 or retail pharmacies that are wholly or 

20 partially-owned by that entity providing 

21 pharmacy benefit management services 

22 under such plan, including mandatory mail 

23 and specialty home delivery programs, re24 tail and mail auto-refill programs, and co25 payment incentives funded by an entity 


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1 providing pharmacy benefit management 

2 services; 

3 ‘‘(ii) the percentage of total prescrip4 tions charged to the plan or participants 

5 and beneficiaries in the plan, that were 

6 dispensed by mail order, specialty, or retail 

7 pharmacies that are wholly or partially8 owned by the entity providing pharmacy 

9 benefit management services; and 

10 ‘‘(iii) a list of all drugs dispensed by 

11 such wholly or partially-owned pharmacy 

12 and charged to the plan, or participants 

13 and beneficiaries of the plan, during the 

14 applicable quarter, and, with respect to 

15 each drug— 

16 ‘‘(I) the amounts charged, per 

17 dosage unit, per course of treatment, 

18 per 30-day supply, and per 90-day 

19 supply, with respect to participants 

20 and beneficiaries in the plan, includ21 ing amounts charged to the plan and 

22 amounts charged to the participants 

23 and beneficiaries; 

24 ‘‘(II) the median amount charged 

25 to the plan, per dosage unit, per 


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1 course of treatment, per 30-day sup2 ply, and per 90-day supply, including 

3 amounts paid by the participants and 

4 beneficiaries, when the same drug is 

5 dispensed by other pharmacies that 

6 are not wholly or partially-owned by 

7 the entity and that are included in the 

8 pharmacy network of that plan; 

9 ‘‘(III) the interquartile range of 

10 the costs, per dosage unit, per course 

11 of treatment, per 30-day supply, and 

12 per 90-day supply, including amounts 

13 paid by the participants and bene14 ficiaries, when the same drug is dis15 pensed by other pharmacies that are 

16 not wholly or partially-owned by the 

17 entity and that are included in the 

18 pharmacy network of that plan; 

19 ‘‘(IV) the lowest cost, per dosage 

20 unit, per course of treatment, per 30- 

21 day supply, and per 90-day supply, 

22 for such drug, including amounts 

23 charged to the plan and participants 

24 and beneficiaries, that is available 


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1 from any pharmacy included in the 

2 network of the plan; 

3 ‘‘(V) the net acquisition cost per 

4 dosage unit and for a 30 day-supply, 

5 and the acquisition cost per typical 

6 course of treatment, if the drug is 

7 subject to a maximum price discount; 

8 and 

9 ‘‘(VI) other information with re10 spect to the cost of the drug, as deter11 mined by the Secretary, such as aver12 age sales price, wholesale acquisition 

13 cost, and national average drug acqui14 sition cost per dosage unit, per typical 

15 course of treatment, or per 30-day 

16 supply, for such drug, including 

17 amounts charged to the plan and par18 ticipants and beneficiaries among all 

19 pharmacies included in the network of 

20 the plan. 

21 ‘‘(B) PLANS OFFERED BY SMALL EMPLOY22 ERS.—An entity providing pharmacy benefit 

23 management services under a group health plan 

24 that is not a covered group health plan that 

25 conducts transactions with a wholly or partiallyVerDate Sep 11 2014 22:24 Apr 27, 2023 Jkt 039200 PO 00000 Frm 00070 Fmt 6652 Sfmt 6201 E:\BILLS\S1339.IS S1339

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1 owned pharmacy shall submit, together with the 

2 report under paragraph (1), a supplementary 

3 report every 6 months to the plan sponsor that 

4 includes the information described in clauses (i) 

5 and (ii) of subparagraph (A). 

6 ‘‘(3) PRIVACY REQUIREMENTS.— 

7 ‘‘(A) RELATIONSHIP TO HIPAA REGULA8 TIONS.—Nothing in this section shall be con9 strued to modify the requirements for the cre10 ation, receipt, maintenance, or transmission of 

11 protected health information under the privacy, 

12 security, breach notification, and enforcement 

13 regulations in parts 160 and 164 of title 45, 

14 Code of Federal Regulations (or successor regu15 lations). 

16 ‘‘(B) REQUIREMENT.—A report submitted 

17 under paragraph (1) or (2) shall contain only 

18 summary health information, as defined in sec19 tion 164.504(a) of title 45, Code of Federal 

20 Regulations (or successor regulations). 

21 ‘‘(C) CLARIFICATION REGARDING CERTAIN

22 DISCLOSURES OF INFORMATION.— 

23 ‘‘(i) REASONABLE RESTRICTIONS.— 

24 Nothing in this section prevents an entity 

25 providing pharmacy benefit management 


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1 services on behalf of a group health plan 

2 from placing reasonable restrictions on the 

3 public disclosure of the information con4 tained in a report under paragraph (1) or 

5 (2). 

6 ‘‘(ii) LIMITATIONS.—An entity pro7 viding pharmacy benefit management serv8 ices on behalf of a group health plan or 

9 group health insurance coverage may not 

10 restrict disclosure of such reports to the 

11 Department of Health and Human Serv12 ices, the Department of Labor, the Depart13 ment of the Treasury, or any other Federal 

14 agency responsible for enforcement activi15 ties under this section for purposes of en16 forcement under this section or other ap17 plicable law, or to the Comptroller General 

18 of the United States in accordance with 

19 paragraph (6). 

20 ‘‘(4) USE AND DISCLOSURE BY PLAN SPON21 SORS.— 

22 ‘‘(A) PROHIBITION.—A plan sponsor may 

23 not— 

24 ‘‘(i) fail or refuse to hire, or dis25 charge, any employee, or otherwise disVerDate Sep 11 2014 22:24 Apr 27, 2023 Jkt 039200 PO 00000 Frm 00072 Fmt 6652 Sfmt 6201 E:\BILLS\S1339.IS S1339

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1 criminate against any employee with re2 spect to the compensation, terms, condi3 tions, or privileges of employment of the 

4 employee, because of information sub5 mitted under paragraph (1) or (2) attrib6 uted to the employee or a dependent of the 

7 employee; or 

8 ‘‘(ii) limit, segregate, or classify the 

9 employees of the employer in any way that 

10 would deprive or tend to deprive any em11 ployee of employment opportunities or oth12 erwise adversely affect the status of the 

13 employee as an employee, because of infor14 mation submitted under paragraph (1) or 

15 (2) attributed to the employee or a depend16 ent of the employee. 

17 ‘‘(B) DISCLOSURE AND REDISCLOSURE.— 

18 A plan sponsor shall not disclose the informa19 tion received under paragraph (1) or (2) ex20 cept— 

21 ‘‘(i) to an occupational or other health 

22 researcher if the research is conducted in 

23 compliance with the regulations and pro24 tections provided for under part 46 of title 


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1 45, Code of Federal Regulations (or suc2 cessor regulations); 

3 ‘‘(ii) in response to an order of a 

4 court, except that the plan sponsor may 

5 disclose only the information expressly au6 thorized by such order; 

7 ‘‘(iii) to the Department of Health 

8 and Human Services, the Department of 

9 Labor, the Department of the Treasury, or 

10 other Federal agency responsible for en11 forcement activities under this section; or 

12 ‘‘(iv) to a contractor or agent for pur13 poses of health plan administration, if such 

14 contractor or agent agrees, in writing, to 

15 abide by the same use and disclosure re16 strictions as the plan sponsor. 

17 ‘‘(C) RELATIONSHIP TO HIPAA REGULA18 TIONS.—With respect to the regulations pro19 mulgated by the Secretary of Health and 

20 Human Services under part C of title XI of the 

21 Social Security Act (42 U.S.C. 1320d et seq.) 

22 and section 264 of the Health Insurance Port23 ability and Accountability Act of 1996 (42 

24 U.S.C. 1320d–2), subparagraph (B) does not 

25 prohibit a covered entity (as defined for purVerDate Sep 11 2014 22:24 Apr 27, 2023 Jkt 039200 PO 00000 Frm 00074 Fmt 6652 Sfmt 6201 E:\BILLS\S1339.IS S1339

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1 poses of such regulations) from any use or dis2 closure of health information that is authorized 

3 for the covered entity under such regulations. 

4 The previous sentence does not affect the au5 thority of such Secretary to modify such regula6 tions. 

7 ‘‘(D) ENFORCEMENT.— 

8 ‘‘(i) IN GENERAL.—The powers, pro9 cedures, and remedies provided in section 

10 207 of the Genetic Information Non11 discrimination Act (42 U.S.C. 2000ff–6) to 

12 a person alleging a violation of title II of 

13 such Act shall be the powers, procedures, 

14 and remedies this subparagraph provides 

15 for any person alleging a violation of this 

16 paragraph. 

17 ‘‘(ii) PROHIBITION AGAINST RETALIA18 TION.—No person shall discriminate 

19 against any individual because such indi20 vidual has opposed any act or practice 

21 made unlawful by this paragraph or be22 cause such individual made a charge, testi23 fied, assisted, or participated in any man24 ner in an investigation, proceeding, or 

25 hearing under this paragraph. The remVerDate Sep 11 2014 22:24 Apr 27, 2023 Jkt 039200 PO 00000 Frm 00075 Fmt 6652 Sfmt 6201 E:\BILLS\S1339.IS S1339

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1 edies and procedures otherwise provided 

2 for under this subparagraph shall be avail3 able to aggrieved individuals with respect 

4 to violations of this clause. 

5 ‘‘(5) REPORTING WITH RESPECT TO GROUP

6 HEALTH PLANS OFFERED BY SMALL EMPLOYERS.— 

7 For plan years beginning on or after January 1, 

8 2025, not less frequently than annually, an entity 

9 providing pharmacy benefit management services on 

10 behalf of a group health plan that is not a covered 

11 group health plan shall submit to the plan sponsor 

12 of such group health plan a report in accordance 

13 with this paragraph, and make such report available 

14 to the plan sponsor in a machine-readable format. 

15 Each such report shall include, with respect to the 

16 applicable group health plan, the information de17 scribed in subparagraphs (A), (D), (E), (F), (G), 

18 and (H) of paragraph (1). 

19 ‘‘(6) SUBMISSIONS TO GAO.—An entity pro20 viding pharmacy benefit management services on be21 half of a group health plan shall submit to the 

22 Comptroller General of the United States each of 

23 the first 2 reports submitted to a plan sponsor under 

24 paragraph (1) or (5) with respect to such plan, and 

25 other such reports as requested, in accordance with 


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1 the privacy requirements under paragraph (3), and 

2 such other information that the Comptroller General 

3 determines necessary to carry out the study under 

4 section 2(f) of the Pharmacy Benefit Manager Re5 form Act. 

6 ‘‘(7) STANDARD FORMATS.— 

7 ‘‘(A) IN GENERAL.—Not later than June 

8 1, 2024, the Secretary, the Secretary of Health 

9 and Human Services, and the Secretary of 

10 Labor shall specify, through rulemaking, stand11 ard formats for health insurance issuers and 

12 entities providing pharmacy benefit manage13 ment services to submit reports required under 

14 this subsection. 

15 ‘‘(B) LIMITED FORM OF REPORT.—The 

16 Secretary, the Secretary of Health and Human 

17 Services, and the Secretary of Labor shall de18 fine through rulemaking a limited form of the 

19 reports under paragraphs (1) and (2) required 

20 to be submitted to plan sponsors who also are 

21 drug manufacturers, drug wholesalers, entities 

22 providing pharmacy benefit management serv23 ices, or other direct participants in the drug 

24 supply chain, in order to prevent anti-competi25 tive behavior. 


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1 ‘‘(c) LIMITATIONS ON SPREAD PRICING.— 

2 ‘‘(1) IN GENERAL.—A group health plan shall 

3 not charge participants and beneficiaries, and an en4 tity providing pharmacy benefit management serv5 ices under such a plan shall not charge the plan or 

6 participants and beneficiaries, a price for a prescrip7 tion drug that exceeds the price paid to the phar8 macy for such drug, excluding penalties paid by the 

9 pharmacy (as described in paragraph (2)) to such 

10 plan or entity. 

11 ‘‘(2) RULE OF CONSTRUCTION.—For purposes 

12 of paragraph (1), penalties paid by pharmacies in13 clude only the following: 

14 ‘‘(A) A penalty paid if an original claim for 

15 a prescription drug was submitted fraudulently 

16 by the pharmacy to the plan or entity. 

17 ‘‘(B) A penalty paid if the original claim 

18 payment made by the plan, issuer, or entity to 

19 the pharmacy was inconsistent with the reim20 bursement terms in any contract between the 

21 pharmacy and the plan or entity. 

22 ‘‘(C) A penalty paid if the pharmacist serv23 ices billed to the plan or entity were not ren24 dered by the pharmacy. 

25 ‘‘(d) FULL REBATE PASS-THROUGH TO PLAN.— 


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1 ‘‘(1) IN GENERAL.—For plan years beginning 

2 on or after January 1, 2025, a third-party adminis3 trator of a group health plan or an entity providing 

4 pharmacy benefit management services under such 

5 health plan shall— 

6 ‘‘(A) remit 100 percent of rebates, fees, al7 ternative discounts, and other remuneration re8 ceived from any applicable entity that are re9 lated to utilization of drugs under such health 

10 plan, to the group health plan; and 

11 ‘‘(B) ensure that any contract entered into 

12 by such third-party administrator or entity pro13 viding pharmacy benefit management services 

14 with an applicable entity remit 100 percent of 

15 rebates, fees, alternative discounts, and other 

16 remuneration received to the third-party admin17 istrator or entity providing pharmacy benefit 

18 management services. 

19 ‘‘(2) FORM AND MANNER OF REMITTANCE.— 

20 Such rebates, fees, alternative discounts, and other 

21 remuneration shall be— 

22 ‘‘(A) remitted to the group health plan in 

23 a timely fashion after the period for which such 

24 rebates, fees, alternative discounts, or other reVerDate Sep 11 2014 22:24 Apr 27, 2023 Jkt 039200 PO 00000 Frm 00079 Fmt 6652 Sfmt 6201 E:\BILLS\S1339.IS S1339

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1 muneration is calculated, and in no case later 

2 than 90 days after the end of such period; 

3 ‘‘(B) fully disclosed and enumerated to the 

4 group health plan sponsor, as described in para5 graphs (1) and (4) of subsection (b); 

6 ‘‘(C) available for audit by the plan spon7 sor, or a third-party designated by a plan spon8 sor not less than once per plan year; and 

9 ‘‘(D) returned to the issuer or entity pro10 viding pharmaceutical benefit management 

11 services by the group health plan if audits by 

12 such entity indicate that the amounts received 

13 are incorrect after such amounts have been paid 

14 to the group health plan. 

15 ‘‘(3) AUDIT OF REBATE CONTRACTS.—A third16 party administrator of a group health plan or an en17 tity providing pharmacy benefit management serv18 ices under such health plan shall make rebate con19 tracts with rebate aggregators or drug manufactur20 ers available for audit by such plan sponsor or des21 ignated third-party, subject to confidentiality agree22 ments to prevent re-disclosure of such contracts. 

23 ‘‘(4) AUDITORS.—The applicable plan sponsor 

24 may select an auditor for purposes of carrying out 

25 audits under paragraphs (2)(C) and (3). 


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

2 this subsection shall be construed to prohibit pay3 ments to entities offering pharmacy benefit manage4 ment services for bona fide services using a fee 

5 structure not contemplated by this subsection, pro6 vided that such fees are transparent to group health 

7 plans. 

8 ‘‘(e) ENFORCEMENT.— 

9 ‘‘(1) IN GENERAL.—The Secretary, in consulta10 tion with the Secretary of Labor and the Secretary 

11 of Health and Human Services, shall enforce this 

12 section. 

13 ‘‘(2) FAILURE TO PROVIDE TIMELY INFORMA14 TION.—A health insurance issuer or an entity pro15 viding pharmacy benefit management services that 

16 violates subsection (a) or fails to provide information 

17 required under subsection (b); a group health plan 

18 or entity providing pharmacy benefit management 

19 services that violates subsection (c); or a third-party 

20 administrator of a group health plan or an entity 

21 providing pharmacy benefit management services 

22 that violates subsection (d) shall be subject to a civil 

23 monetary penalty in the amount of $10,000 for each 

24 day during which such violation continues or such 

25 information is not disclosed or reported. 


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1 ‘‘(3) FALSE INFORMATION.—An entity pro2 viding pharmacy benefit management services, or 

3 drug manufacturer that knowingly provides false in4 formation under this section shall be subject to a 

5 civil money penalty in an amount not to exceed 

6 $100,000 for each item of false information. Such 

7 civil money penalty shall be in addition to other pen8 alties as may be prescribed by law. 

9 ‘‘(4) PROCEDURE.—The provisions of section 

10 1128A of the Social Security Act, other than sub11 sections (a) and (b) and the first sentence of sub12 section (c)(1) of such section shall apply to civil 

13 monetary penalties under this subsection in the 

14 same manner as such provisions apply to a penalty 

15 or proceeding under section 1128A of the Social Se16 curity Act. 

17 ‘‘(5) WAIVERS.—The Secretary may waive pen18 alties under paragraph (2), or extend the period of 

19 time for compliance with a requirement of this sec20 tion, for an entity in violation of this section that 

21 has made a good-faith effort to comply with this sec22 tion. 

23 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec24 tion shall be construed to permit a group health plan or 

25 other entity to restrict disclosure to, or otherwise limit the 


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1 access of, the Department of the Treasury to a report de2 scribed in subsection (b)(1) or information related to com3 pliance with subsection (a) by such plan or entity. 

4 ‘‘(g) DEFINITIONS.—In this section— 

5 ‘‘(1) the term ‘applicable entity’ means— 

6 ‘‘(A) a drug manufacturer, distributor, 

7 wholesaler, rebate aggregator (or other pur8 chasing entity designed to aggregate rebates), 

9 group purchasing organization, or associated 

10 third party; 

11 ‘‘(B) any subsidiary, parent, affiliate, or 

12 subcontractor of a group health plan, health in13 surance issuer, entity that provides pharmacy 

14 benefit management services on behalf of such 

15 a plan or issuer, or any entity described in sub16 paragraph (A); or 

17 ‘‘(C) such other entity as the Secretary, 

18 the Secretary of Health and Human Services, 

19 and the Secretary of Labor may specify through 

20 rulemaking; 

21 ‘‘(2) the term ‘covered group health insurance 

22 coverage’ means health insurance coverage offered in 

23 connection with a group health plan maintained by 

24 a large employer; 


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1 ‘‘(3) the term ‘covered group health plan’ 

2 means a group health plan maintained by a large 

3 employer; 

4 ‘‘(4) the term ‘gross spending’, with respect to 

5 prescription drug benefits under a group health plan 

6 or health insurance coverage, means the amount 

7 spent by a group health plan or health insurance 

8 issuer on prescription drug benefits, calculated be9 fore the application of manufacturer rebates, fees, 

10 alternative discounts, or other remuneration; 

11 ‘‘(5) the term ‘large employer’ means, in con12 nection with a group health plan with respect to a 

13 calendar year and a plan year, an employer who em14 ployed an average of at least 50 employees on busi15 ness days during the preceding calendar year and 

16 who employs at least 1 employee on the first day of 

17 the plan year; 

18 ‘‘(6) the term ‘net spending’, with respect to 

19 prescription drug benefits under a group health plan 

20 or health insurance coverage, means the amount 

21 spent by a group health plan or health insurance 

22 issuer on prescription drug benefits, calculated after 

23 the application of manufacturer rebates, fees, alter24 native discounts, or other remuneration; 


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1 ‘‘(7) the term ‘plan sponsor’ has the meaning 

2 given such term in section 3(16)(B) of the Employee 

3 Retirement Income Security Act of 1974 (29 U.S.C. 

4 1002(16)(B)); 

5 ‘‘(8) the term ‘remuneration’ has the meaning 

6 given such term by the Secretary, the Secretary of 

7 Labor, and the Secretary of Health and Human 

8 Services, through notice and comment rulemaking; 

9 ‘‘(9) the term ‘small employer’ means, in con10 nection with a group health plan with respect to a 

11 calendar year and a plan year, an employer who em12 ployed an average of at least 1 but not more than 

13 49 employees on business days during the preceding 

14 calendar year and who employs at least 1 employee 

15 on the first day of the plan year; and 

16 ‘‘(10) the term ‘wholesale acquisition cost’ has 

17 the meaning given such term in section 

18 1847A(c)(6)(B) of the Social Security Act (42 

19 U.S.C. 1395w–3a(c)(6)(B)).’’. 

20 (2) CLERICAL AMENDMENT.—The table of sec21 tions for subchapter B of chapter 100 of the Inter22 nal Revenue Code of 1986 is amended by adding at 

23 the end the following new item: 

‘‘Sec. 9826. Oversight of entities that provide pharmacy benefit management 

services.’’. 

24 (d) FUNDING.— 


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1 (1) For purposes of carrying out the amend2 ments made by subsection (a), there are appro3 priated to the Centers for Medicare & Medicaid 

4 Services, out of amounts in the Treasury not other5 wise appropriated, $80,000,000 for fiscal year 2024. 

6 (2) For purposes of carrying out the amend7 ments made by subsection (b), there are appro8 priated to the Department of Labor, out of amounts 

9 in the Treasury not otherwise appropriated, 

10 $43,750,000 for fiscal year 2024. 

11 (e) ASPE STUDY.—The Assistant Secretary for 

12 Planning and Evaluation of the Department of Health and 

13 Human Services shall conduct or commission a study on 

14 how the United States health care market would be im15 pacted by potential regulatory changes disallowing manu16 facturer rebates in the manner and to the extent allowed 

17 on the date of enactment of this Act, with a focus on the 

18 impact to stakeholders in the commercial insurance mar19 ket, and, not later than 1 year after the date of enactment 

20 of this Act, submit a report to Congress on the results 

21 of such study. Such study and report shall consider the 

22 following: 

23 (1) The impact on the impact of making no 

24 such regulatory changes, as well as potential behav25 ioral changes by plan sponsors, members, and pharVerDate Sep 11 2014 22:24 Apr 27, 2023 Jkt 039200 PO 00000 Frm 00086 Fmt 6652 Sfmt 6201 E:\BILLS\S1339.IS S1339

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1 maceutical manufacturers, such as tighter 

2 formularies, changes to price concessions, changes in 

3 utilization, if such regulatory changes are made. 

4 (2) The mechanics needed in the pharma5 ceutical supply chain (whether existing or not) to 

6 move a manufacturer rebate to the point of sale. 

7 (3) The feasibility of a partial point-of-sale 

8 manufacturer rebate versus a full point-of-sale man9 ufacturer rebate. 

10 (4) The impact on patient out-of-pocket costs, 

11 premiums, and other cost-sharing. 

12 (5) Possible behavioral changes by other third 

13 parties in the pharmaceutical supply chain including 

14 drug manufacturer, distributor, wholesaler, rebate 

15 aggregators, pharmacy services administrative orga16 nizations, or group purchasing organizations. 

17 (6) Behavioral changes between entities that 

18 contract with pharmaceutical manufacturers and 

19 pharmaceutical supply chain. 

20 (7) Alternative price negotiation mechanisms, 

21 including the impact of the Act of June 19, 1936 

22 (commonly known as the ‘‘Robinson–Patman Act’’; 

23 49 Stat. 1526, chapter 592; 15 U.S.C. 13a et seq.), 

24 and the amendments made by that Act, on drug 

25 pricing negotiations. 


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1 (8) The impact on pharmacies, including phar2 macy rebates, pharmacy fees, and dispensing chan3 nels. 

4 (f) GAO STUDY.— 

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

6 2029, the Comptroller General of the United States 

7 shall report to Congress on— 

8 (A) pharmacy networks of group health 

9 plans, health insurance issuers, and entities 

10 providing pharmacy benefit management serv11 ices under such group health plan or group or 

12 individual health insurance coverage, including 

13 networks that have pharmacies that are under 

14 common ownership (in whole or part) with 

15 group health plans, health insurance issuers, or 

16 entities providing pharmacy benefit manage17 ment services or pharmacy benefit administra18 tive services under group health plan or group 

19 or individual health insurance coverage; 

20 (B) as it relates to pharmacy networks 

21 that include pharmacies under common owner22 ship described in subparagraph (A)— 

23 (i) whether such networks are de24 signed to encourage participants and bene25 ficiaries of a plan or coverage to use such 


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1 pharmacies over other network pharmacies 

2 for specific services or drugs, and if so, the 

3 reasons the networks give for encouraging 

4 use of such pharmacies; and 

5 (ii) whether such pharmacies are used 

6 by participants and beneficiaries dispropor7 tionately more in the aggregate or for spe8 cific services or drugs compared to other 

9 network pharmacies; 

10 (C) whether group health plans and health 

11 insurance issuers offering group or individual 

12 health insurance coverage have options to elect 

13 different network pricing arrangements in the 

14 marketplace with entities that provide phar15 macy benefit management services, the preva16 lence of electing such different network pricing 

17 arrangements; 

18 (D) pharmacy network design parameters 

19 that encourage participants and beneficiaries in 

20 the plan or coverage to fill prescriptions at mail 

21 order, specialty, or retail pharmacies that are 

22 wholly or partially-owned by that issuer or enti23 ty; and 

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1 scription drugs to participants and beneficiaries 

2 in a group health plan or health insurance cov3 erage that are under common ownership (in 

4 whole or part) with group health plans, health 

5 insurance issuers, or entities providing phar6 macy benefit management services or pharmacy 

7 benefit administrative services under group 

8 health plan or group or individual health insur9 ance coverage receive reimbursement that is 

10 greater than the median price charged to the 

11 group health plan or health insurance issuer 

12 when the same drug is dispensed to participants 

13 and beneficiaries in the plan or coverage by 

14 other pharmacies included in the pharmacy net15 work of that plan, issuer, or entity that are not 

16 wholly or partially owned by the health insur17 ance issuer or entity providing pharmacy ben18 efit management services. 

19 (2) REQUIREMENT.—In carrying out paragraph 

20 (1), the Comptroller General of the United States 

21 shall not disclose— 

22 (A) information that would allow for iden23 tification of a specific individual, plan sponsor, 

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1 viding pharmacy benefit management services; 

2 or 

3 (B) commercial or financial information 

4 that is privileged or confidential. 

5 (3) DEFINITIONS.—In this subsection, the 

6 terms ‘‘group health plan’’, ‘‘health insurance cov7 erage’’, and ‘‘health insurance issuer’’ have the 

8 meanings given such terms in section 2791 of the 

9 Public Health Service Act (42 U.S.C. 300gg–91). 

Æ 


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