II 

118TH CONGRESS 

1ST SESSION S. 1217 

To prohibit the distribution and receipt of rebates for prescription drugs. 

IN THE SENATE OF THE UNITED STATES 

APRIL 19, 2023 

Mr. HAWLEY introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To prohibit the distribution and receipt of rebates for 

prescription drugs. 

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 ‘‘Ending the Prescrip5 tion Drug Kickback Act of 2023’’. 

6 SEC. 2. REQUIREMENTS FOR PRESCRIPTION DRUG BENE7 FITS. 

8 (a) REMOVAL OF SAFE HARBOR PROTECTION FOR

9 REBATES INVOLVING PRESCRIPTION DRUGS.— 

10 (1) REMOVAL OF SAFE HARBOR PROTECTION

11 FOR REBATES INVOLVING PRESCRIPTION DRUGS.— 


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1 Section 1128B(b) of the Social Security Act (42 

2 U.S.C. 1320a–7b(b)) is amended— 

3 (A) in paragraph (3)(A), by striking ‘‘a 

4 discount’’ and inserting ‘‘subject to paragraph 

5 (5), a discount’’; and 

6 (B) by adding at the end the following: 

7 ‘‘(5) REMOVAL OF SAFE HARBOR PROTECTION

8 FOR REBATES INVOLVING PRESCRIPTION DRUGS.— 

9 ‘‘(A) IN GENERAL.—The safe harbor de10 scribed in paragraph (3)(A) shall not apply to 

11 a rebate or other remuneration, including a re12 bate or other remuneration intended to influ13 ence formulary tier placement or its equivalent, 

14 from a manufacturer of prescription drugs or 

15 an entity that provides pharmacy benefits man16 agement services. 

17 ‘‘(B) DEFINITIONS.—In this paragraph: 

18 ‘‘(i) ENTITY THAT PROVIDES PHAR19 MACY BENEFITS MANAGEMENT SERV20 ICES.—The term ‘entity that provides 

21 pharmacy benefits management services’ 

22 means— 

23 ‘‘(I) any person, business, or 

24 other entity that provides, directly or 


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1 through an intermediary, the service 

2 of— 

3 ‘‘(aa) negotiating terms and 

4 conditions with respect to a pre5 scription drug on behalf of a 

6 health plan under a Federal 

7 health care program; or 

8 ‘‘(bb) managing the pre9 scription drug benefits provided 

10 by the plan, which may include 

11 formulary management, the proc12 essing and payment of claims for 

13 prescription drugs, the perform14 ance of drug utilization review, 

15 the processing of drug prior au16 thorization requests, the adju17 dication of appeals or grievances 

18 related to the prescription drug 

19 benefit, contracting with network 

20 pharmacies, or the provision of 

21 related services; or 

22 ‘‘(II) any entity that is owned, 

23 affiliated, or related under a common 

24 ownership structure with a person, 


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1 business, or entity described in sub2 clause (I). 

3 ‘‘(ii) REBATE.—The term ‘rebate’ 

4 means any discount the terms of which are 

5 fixed and disclosed in writing to the buyer 

6 at the time of the purchase to which the 

7 discount applies, but which is not given at 

8 the time of purchase.’’. 

9 (2) EFFECTIVE DATE.—The amendments made 

10 by this subsection shall take effect on January 1, 

11 2025. 

12 (b) REQUIREMENTS FOR PRIVATE INSURANCE

13 PLANS.— 

14 (1) IN GENERAL.—Part D of title XXVII of the 

15 Public Health Service Act (42 U.S.C. 300gg–111 et 

16 seq.) is amended by adding at the end the following: 

17 ‘‘SEC. 2799A–11. REQUIREMENTS WITH RESPECT TO PRE18 SCRIPTION DRUG BENEFITS. 

19 ‘‘(a) IN GENERAL.—A group health plan or a health 

20 insurance issuer offering group or individual health insur21 ance coverage shall not, and shall ensure that any entity 

22 that provides pharmacy benefits management services on 

23 its behalf does not, receive from a drug manufacturer a 

24 rebate or other remuneration, including a rebate or other 

25 remuneration intended to influence formulary tier placeVerDate Sep 11 2014 00:05 Apr 22, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1217.IS S1217

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1 ment or its equivalent, with respect to any prescription 

2 drug received by an enrollee in the plan or coverage and 

3 covered by the plan or coverage. 

4 ‘‘(b) DEFINITIONS.—For purposes of this section— 

5 ‘‘(1) the term ‘entity that provides pharmacy 

6 benefits management services’ means— 

7 ‘‘(A) any person, business, or other entity 

8 that provides, directly or through an inter9 mediary, the service of— 

10 ‘‘(i) negotiating terms and conditions 

11 with respect to a prescription drug on be12 half of a group health plan or group or in13 dividual health insurance coverage; or 

14 ‘‘(ii) managing the prescription drug 

15 benefits provided by the plan or coverage, 

16 which may include formulary management, 

17 the processing and payment of claims for 

18 prescription drugs, the performance of 

19 drug utilization review, the processing of 

20 drug prior authorization requests, the ad21 judication of appeals or grievances related 

22 to the prescription drug benefit, con23 tracting with network pharmacies, or the 

24 provision of related services; or 


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1 ‘‘(B) any entity that is owned, affiliated, or 

2 related under a common ownership structure 

3 with a person, business, or entity described in 

4 paragraph (1); and 

5 ‘‘(2) the term ‘rebate’ means any discount the 

6 terms of which are fixed and disclosed in writing to 

7 the buyer at the time of the purchase to which the 

8 discount applies, but which is not given at the time 

9 of purchase.’’. 

10 (2) ERISA.— 

11 (A) IN GENERAL.—Subpart B of part 7 of 

12 subtitle B of title I of the Employee Retirement 

13 Income Security Act of 1974 (29 U.S.C. 1185 

14 et seq.) is amended by adding at the end the 

15 following: 

16 ‘‘SEC. 726. REQUIREMENTS WITH RESPECT TO PRESCRIP17 TION DRUG BENEFITS. 

18 ‘‘(a) IN GENERAL.—A group health plan or a health 

19 insurance issuer offering group health insurance coverage 

20 shall not, and shall ensure that any entity that provides 

21 pharmacy benefits management services on its behalf does 

22 not, receive from a drug manufacturer a rebate or other 

23 remuneration, including a rebate or other remuneration 

24 intended to influence formulary tier placement or its 

25 equivalent, with respect to any prescription drug received 


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1 by an enrollee in the plan or coverage and covered by the 

2 plan or coverage. 

3 ‘‘(b) DEFINITIONS.—For purposes of this section— 

4 ‘‘(1) the term ‘entity that provides pharmacy 

5 benefits management services’ means— 

6 ‘‘(A) any person, business, or other entity 

7 that provides, directly or through an inter8 mediary, the service of— 

9 ‘‘(i) negotiating terms and conditions 

10 with respect to a prescription drug on be11 half of a group health plan or group health 

12 insurance coverage; or 

13 ‘‘(ii) managing the prescription drug 

14 benefits provided by the plan or coverage, 

15 which may include formulary management, 

16 the processing and payment of claims for 

17 prescription drugs, the performance of 

18 drug utilization review, the processing of 

19 drug prior authorization requests, the ad20 judication of appeals or grievances related 

21 to the prescription drug benefit, con22 tracting with network pharmacies, or the 

23 provision of related services; or 

24 ‘‘(B) any entity that is owned, affiliated, or 

25 related under a common ownership structure 


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1 with a person, business, or entity described in 

2 paragraph (1); and 

3 ‘‘(2) the term ‘rebate’ means any discount the 

4 terms of which are fixed and disclosed in writing to 

5 the buyer at the time of the purchase to which the 

6 discount applies, but which is not given at the time 

7 of purchase.’’. 

8 (B) CLERICAL AMENDMENT.—The table of 

9 contents of the Employee Retirement Income 

10 Security Act of 1974 is amended by inserting 

11 after the item relating to section 725 the fol12 lowing: 

‘‘Sec. 726. Requirements with respect to prescription drug benefits.’’. 

13 (3) IRC.— 

14 (A) IN GENERAL.—Subchapter B of chap15 ter 100 of the Internal Revenue Code of 1986 

16 is amended by adding at the end the following: 

17 ‘‘SEC. 9826. REQUIREMENTS WITH RESPECT TO PRESCRIP18 TION DRUG BENEFITS. 

19 ‘‘(a) IN GENERAL.—A group health plan shall not, 

20 and shall ensure that any entity that provides pharmacy 

21 benefits management services on its behalf does not, re22 ceive from a drug manufacturer a rebate or other remu23 neration with respect to any prescription drug received by 

24 an enrollee in the plan and covered by the plan. 

25 ‘‘(b) DEFINITIONS.—For purposes of this section— 


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1 ‘‘(1) the term ‘entity that provides pharmacy 

2 benefits management services’ means— 

3 ‘‘(A) any person, business, or other entity 

4 that provides, directly or through an inter5 mediary, the service of— 

6 ‘‘(i) negotiating terms and conditions 

7 with respect to a prescription drug on be8 half of a group health plan; or 

9 ‘‘(ii) managing the prescription drug 

10 benefits provided by the plan, which may 

11 include formulary management, the proc12 essing and payment of claims for prescrip13 tion drugs, the performance of drug utili14 zation review, the processing of drug prior 

15 authorization requests, the adjudication of 

16 appeals or grievances related to the pre17 scription drug benefit, contracting with 

18 network pharmacies, or the provision of re19 lated services; or 

20 ‘‘(B) any entity that is owned, affiliated, or 

21 related under a common ownership structure 

22 with a person, business, or entity described in 

23 paragraph (1); and 

24 ‘‘(2) the term ‘rebate’ means any discount the 

25 terms of which are fixed and disclosed in writing to 


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1 the buyer at the time of the purchase to which the 

2 discount applies, but which is not given at the time 

3 of purchase.’’. 

4 (B) CLERICAL AMENDMENT.—The table of 

5 sections for subchapter B of chapter 100 of the 

6 Internal Revenue Code of 1986 is amended by 

7 adding at the end the following: 

‘‘Sec. 9826. Requirements with respect to prescription drug benefits.’’. 

8 (4) EFFECTIVE DATE.—The amendments made 

9 by paragraphs (1), (2), and (3) shall take effect on 

10 January 1, 2025. 

Æ 


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