II 

Calendar No. 113 

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, Mr. MARSHALL, and 

Mr. BRAUN) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

JUNE 22, 2023 

Reported by Mr. SANDERS, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

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’’. 


pbinns on DSKJLVW7X2PROD with $$_JOB
2 

•S 1339 RS

1 SEC. 2. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR2 MACY BENEFIT MANAGEMENT SERVICES. 

3 (a) PHSA.—Title XXVII of the Public Health Serv4 ice Act (42 U.S.C. 300gg et seq.) is amended— 

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

6 by adding at the end the following new section: 

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

8 PHARMACY BENEFIT MANAGEMENT SERV9 ICES. 

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

11 after January 1, 2025, a group health plan or health in12 surance issuer offering group health insurance coverage 

13 or an entity providing pharmacy benefit management serv14 ices on behalf of such a plan or issuer shall not enter into 

15 a contract with an applicable entity that limits the disclo16 sure of information to plan sponsors in such a manner 

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

18 pharmacy benefit management services on behalf of a plan 

19 or issuer, from making the reports described in subsection 

20 (b). 

21 ‘‘(b) REPORTS.— 

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

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

24 than annually, an entity providing pharmacy benefit 

25 management services on behalf of a covered group 

26 health plan shall submit to the plan sponsor of such 


pbinns on DSKJLVW7X2PROD with $$_JOB
3 

•S 1339 RS

1 covered group health plan a report in accordance 

2 with this subsection and make such report available 

3 to the plan sponsor in a machine-readable format 

4 and, as the Secretary, the Secretary of Labor, and 

5 the Secretary of the Treasury may determine, other 

6 formats. Each such report shall include, with respect 

7 to the covered group health plan— 

8 ‘‘(A) as applicable, information collected 

9 from drug manufacturers by such issuer or en10 tity on the total amount of copayment assist11 ance dollars paid, or copayment cards applied, 

12 that were funded by the drug manufacturer 

13 with respect to the participants and bene14 ficiaries in such plan; 

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

16 plan or entity providing pharmacy benefit man17 agement services that was billed during the re18 porting period, including, with respect to each 

19 such drug during the reporting period— 

20 ‘‘(i) the brand name, generic or non21 proprietary name, and National Drug 

22 Code; 

23 ‘‘(ii) the number of participants and 

24 beneficiaries for whom the drug was billed 

25 during the reporting period, the total numVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
4 

•S 1339 RS

1 ber of prescription claims for the drug (in2 cluding original prescriptions and refills), 

3 and the total number of dosage units of 

4 the drug dispensed across the reporting pe5 riod; 

6 ‘‘(iii) for each claim or dosage unit de7 scribed in clause (ii), the type of dis8 pensing channel used, such as retail, mail 

9 order, or specialty pharmacy; 

10 ‘‘(iv) the wholesale acquisition cost, 

11 listed as cost per days supply, cost per dos12 age unit, and cost per typical course of 

13 treatment (as applicable); 

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

15 by participants and beneficiaries on such 

16 drug after application of any benefits 

17 under the plan or coverage, including par18 ticipant and beneficiary spending through 

19 copayments, coinsurance, and deductibles, 

20 but not including any amounts spent by 

21 participants and beneficiaries on drugs not 

22 covered under the plan or coverage or for 

23 which no claim is submitted to the plan or 

24 coverage; and 


pbinns on DSKJLVW7X2PROD with $$_JOB
5 

•S 1339 RS

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

2 spending by the plan exceeded $10,000 

3 and that is one of the 50 prescription 

4 drugs for which the group health plan 

5 spent the most on prescription drug bene6 fits during the reporting period— 

7 ‘‘(I) a list of all other drugs in 

8 the same therapeutic class, including 

9 brand name drugs and biological 

10 products and generic drugs or bio11 similar biological products that are in 

12 the same therapeutic class as such 

13 drug; and 

14 ‘‘(II) if applicable, the rationale 

15 for preferred formulary placement of 

16 such drug in that therapeutic class, 

17 selected from a list of standard ra18 tionales established by the Secretary; 

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

20 drugs that were dispensed under the health 

21 plan during the reporting period, and, with re22 spect to each such therapeutic class of drugs, 

23 during the reporting period— 


pbinns on DSKJLVW7X2PROD with $$_JOB
6 

•S 1339 RS

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

2 before rebates, fees, alternative discounts, 

3 or other remuneration; 

4 ‘‘(ii) the number of participants and 

5 beneficiaries who filled a prescription for a 

6 drug in that class; 

7 ‘‘(iii) if applicable to that class, a de8 scription of the formulary tiers and utiliza9 tion management mechanisms (such as 

10 prior authorization or step therapy) em11 ployed for drugs in that class; 

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

13 by participants and beneficiaries, including 

14 participant and beneficiary spending 

15 through copayments, coinsurance, and 

16 deductibles; and 

17 ‘‘(v) for each therapeutic class under 

18 which 3 or more drugs are included on the 

19 formulary of such plan— 

20 ‘‘(I) the amount received, or ex21 pected to be received, by such entity, 

22 from an applicable entity, in rebates, 

23 fees, alternative discounts, or other 

24 remuneration that— 


pbinns on DSKJLVW7X2PROD with $$_JOB
7 

•S 1339 RS

1 ‘‘(aa) has been paid, or will 

2 be paid, by such an applicable 

3 entity for claims incurred during 

4 the reporting period; or 

5 ‘‘(bb) is related to utilization 

6 of drugs or drug spending; 

7 ‘‘(II) the total net spending by 

8 the health plan on that class of drugs; 

9 and 

10 ‘‘(III) the net price per typical 

11 course of treatment or 30-day supply 

12 incurred by the health plan and its 

13 participants and beneficiaries, after 

14 rebates, fees, alternative discounts, or 

15 other remuneration provided by an 

16 applicable entity, for drugs dispensed 

17 within such therapeutic class during 

18 the reporting period; 

19 ‘‘(D) total gross spending on prescription 

20 drugs by the plan during the reporting period, 

21 before rebates, fees, alternative discounts, or 

22 other remuneration provided by an applicable 

23 entity; 

24 ‘‘(E) the total amount received, or ex25 pected to be received, by the health plan, from 


pbinns on DSKJLVW7X2PROD with $$_JOB
8 

•S 1339 RS

1 an applicable entity, in rebates, fees, alternative 

2 discounts, and other remuneration received 

3 from any such entities, related to utilization of 

4 drug or drug spending under that health plan 

5 during the reporting period; 

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

7 drugs by the health plan during the reporting 

8 period; 

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

10 rebates, fees, or any other type of compensation 

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

12 of the Employee Retirement Income Security 

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

14 or any other individual or firm who referred the 

15 group health plan’s business to the pharmacy 

16 benefit manager; and 

17 ‘‘(H) a summary document that includes 

18 such information described in subparagraphs 

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

20 useful for plan sponsors for purposes of select21 ing pharmacy benefit management services, 

22 such as an estimated net price to plan sponsor 

23 and participant or beneficiary, a cost per claim, 

24 the fee structure or reimbursement model, and 

25 estimated cost per participant or beneficiary. 


pbinns on DSKJLVW7X2PROD with $$_JOB
9 

•S 1339 RS

1 ‘‘(2) SUPPLEMENTARY REPORTING FOR INTRA2 COMPANY PRESCRIPTION DRUG TRANSACTIONS.— 

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

4 issuer offering covered group health insurance 

5 coverage or an entity providing pharmacy ben6 efit management services under a covered group 

7 health plan or covered group health insurance 

8 coverage shall submit, together with the report 

9 under paragraph (1), a supplementary report 

10 every 6 months to the plan sponsor that in11 cludes— 

12 ‘‘(i) an explanation of any benefit de13 sign parameters that encourage or require 

14 participants and beneficiaries in the plan 

15 or coverage to fill prescriptions at mail 

16 order, specialty, or retail pharmacies that 

17 are wholly or partially-owned by that issuer 

18 or entity providing pharmacy benefit man19 agement services under such plan or cov20 erage, including mandatory mail and spe21 cialty home delivery programs, retail and 

22 mail auto-refill programs, and copayment 

23 incentives funded by an entity providing 

24 pharmacy benefit management services; 


pbinns on DSKJLVW7X2PROD with $$_JOB
10 

•S 1339 RS

1 ‘‘(ii) the percentage of total prescrip2 tions charged to the plan, coverage, or par3 ticipants and beneficiaries in the plan or 

4 coverage, that were dispensed by mail 

5 order, specialty, or retail pharmacies that 

6 are wholly or partially-owned by the issuer 

7 or entity providing pharmacy benefit man8 agement services; and 

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

10 such wholly or partially-owned pharmacy 

11 and charged to the plan or coverage, or 

12 participants and beneficiaries of the plan 

13 or coverage, during the applicable quarter, 

14 and, with respect to each drug— 

15 ‘‘(I) the amounts charged, per 

16 dosage unit, per course of treatment, 

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

18 supply, with respect to participants 

19 and beneficiaries in the plan or cov20 erage, including amounts charged to 

21 the plan or coverage and amounts 

22 charged to the participants and bene23 ficiaries; 

24 ‘‘(II) the median amount charged 

25 to the plan or coverage, per dosage 


pbinns on DSKJLVW7X2PROD with $$_JOB
11 

•S 1339 RS

1 unit, per course of treatment, per 30- 

2 day supply, and per 90-day supply, in3 cluding amounts paid by the partici4 pants and beneficiaries, when the 

5 same drug is dispensed by other phar6 macies that are not wholly or par7 tially-owned by the issuer or entity 

8 and that are included in the pharmacy 

9 network of that plan or coverage; 

10 ‘‘(III) the interquartile range of 

11 the costs, per dosage unit, per course 

12 of treatment, per 30-day supply, and 

13 per 90-day supply, including amounts 

14 paid by the participants and bene15 ficiaries, when the same drug is dis16 pensed by other pharmacies that are 

17 not wholly or partially-owned by the 

18 issuer or entity and that are included 

19 in the pharmacy network of that plan 

20 or coverage; 

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

22 unit, per course of treatment, per 30- 

23 day supply, and per 90-day supply, 

24 for such drug, including amounts 

25 charged to the plan or issuer and parVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
12 

•S 1339 RS

1 ticipants and beneficiaries, that is 

2 available from any pharmacy included 

3 in the network of the plan or cov4 erage; 

5 ‘‘(V) the net acquisition cost per 

6 dosage unit and for a 30 day-supply, 

7 and the acquisition cost per typical 

8 course of treatment, if the drug is 

9 subject to a maximum price discount; 

10 and 

11 ‘‘(VI) other information with re12 spect to the cost of the drug, as deter13 mined by the Secretary, such as aver14 age sales price, wholesale acquisition 

15 cost, and national average drug acqui16 sition cost per dosage unit, per typical 

17 course of treatment, or per 30-day 

18 supply, for such drug, including 

19 amounts charged to the plan or issuer 

20 and participants and beneficiaries 

21 among all pharmacies included in the 

22 network of the plan or coverage. 

23 ‘‘(B) PLANS AND COVERAGE OFFERED BY

24 SMALL EMPLOYERS.—A health insurance issuer 

25 offering covered group health insurance covVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
13 

•S 1339 RS

1 erage that is not covered group health insur2 ance coverage or an entity providing pharmacy 

3 benefit management services under a group 

4 health plan that is not a covered group health 

5 plan or under group health insurance coverage 

6 that is not covered group health insurance cov7 erage that conducts transactions with a wholly 

8 or partially-owned pharmacy shall submit, to9 gether with the report under paragraph (1), a 

10 supplementary report every 6 months to the 

11 plan sponsor that includes the information de12 scribed in clauses (i) and (ii) of subparagraph 

13 (A). 

14 ‘‘(3) PRIVACY REQUIREMENTS.— 

15 ‘‘(A) RELATIONSHIP TO HIPAA REGULA16 TIONS.—Nothing in this section shall be con17 strued to modify the requirements for the cre18 ation, receipt, maintenance, or transmission of 

19 protected health information under the privacy, 

20 security, breach notification, and enforcement 

21 regulations in parts 160 and 164 of title 45, 

22 Code of Federal Regulations (or successor regu23 lations). 

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

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


pbinns on DSKJLVW7X2PROD with $$_JOB
14 

•S 1339 RS

1 summary health information, as defined in sec2 tion 164.504(a) of title 45, Code of Federal 

3 Regulations (or successor regulations). 

4 ‘‘(C) CLARIFICATION REGARDING CERTAIN

5 DISCLOSURES OF INFORMATION.— 

6 ‘‘(i) REASONABLE RESTRICTIONS.— 

7 Nothing in this section prevents a health 

8 insurance issuer offering group health in9 surance coverage or an entity providing 

10 pharmacy benefit management services on 

11 behalf of a group health plan or group 

12 health insurance coverage from placing 

13 reasonable restrictions on the public disclo14 sure of the information contained in a re15 port under paragraph (1) or (2). 

16 ‘‘(ii) LIMITATIONS.—A health insur17 ance issuer offering group health insurance 

18 coverage or an entity providing pharmacy 

19 benefit management services on behalf of a 

20 group health plan or group health insur21 ance coverage may not restrict disclosure 

22 of such reports to the Department of 

23 Health and Human Services, the Depart24 ment of Labor, the Department of the 

25 Treasury, or any other Federal agency reVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
15 

•S 1339 RS

1 sponsible for enforcement activities under 

2 this section for purposes of enforcement 

3 under this section or other applicable law, 

4 or to the Comptroller General of the 

5 United States in accordance with para6 graph (6). 

7 ‘‘(4) USE AND DISCLOSURE BY PLAN SPON8 SORS.— 

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

10 not— 

11 ‘‘(i) fail or refuse to hire, or dis12 charge, any employee, or otherwise dis13 criminate against any employee with re14 spect to the compensation, terms, condi15 tions, or privileges of employment of the 

16 employee, because of information sub17 mitted under paragraph (1) or (2) attrib18 uted to the employee or a dependent of the 

19 employee; or 

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

21 employees of the employer in any way that 

22 would deprive or tend to deprive any em23 ployee of employment opportunities or oth24 erwise adversely affect the status of the 

25 employee as an employee, because of inforVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
16 

•S 1339 RS

1 mation submitted under paragraph (1) or 

2 (2) attributed to the employee or a depend3 ent of the employee. 

4 ‘‘(B) DISCLOSURE AND REDISCLOSURE.— 

5 A plan sponsor shall not disclose the informa6 tion received under paragraph (1) or (2) ex7 cept— 

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

9 researcher if the research is conducted in 

10 compliance with the regulations and pro11 tections provided for under part 46 of title 

12 45, Code of Federal Regulations (or suc13 cessor regulations); 

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

15 court, except that the plan sponsor may 

16 disclose only the information expressly au17 thorized by such order; 

18 ‘‘(iii) to the Department of Health 

19 and Human Services, the Department of 

20 Labor, the Department of the Treasury, or 

21 other Federal agency responsible for en22 forcement activities under this section; or 

23 ‘‘(iv) to a contractor or agent for pur24 poses of health plan administration, if such 

25 contractor or agent agrees, in writing, to 


pbinns on DSKJLVW7X2PROD with $$_JOB
17 

•S 1339 RS

1 abide by the same use and disclosure re2 strictions as the plan sponsor. 

3 ‘‘(C) RELATIONSHIP TO HIPAA REGULA4 TIONS.—With respect to the regulations pro5 mulgated by the Secretary of Health and 

6 Human Services under part C of title XI of the 

7 Social Security Act and section 264 of the 

8 Health Insurance Portability and Accountability 

9 Act of 1996, subparagraph (B) does not pro10 hibit a covered entity (as defined for purposes 

11 of such regulations) from any use or disclosure 

12 of health information that is authorized for the 

13 covered entity under such regulations. The pre14 vious sentence does not affect the authority of 

15 such Secretary to modify such regulations. 

16 ‘‘(D) ENFORCEMENT.— 

17 ‘‘(i) IN GENERAL.—The powers, pro18 cedures, and remedies provided in section 

19 207 of the Genetic Information Non20 discrimination Act to a person alleging a 

21 violation of title II of such Act shall be the 

22 powers, procedures, and remedies this sub23 paragraph provides for any person alleging 

24 a violation of this paragraph. 


pbinns on DSKJLVW7X2PROD with $$_JOB
18 

•S 1339 RS

1 ‘‘(ii) PROHIBITION AGAINST RETALIA2 TION.—No person shall discriminate 

3 against any individual because such indi4 vidual has opposed any act or practice 

5 made unlawful by this paragraph or be6 cause such individual made a charge, testi7 fied, assisted, or participated in any man8 ner in an investigation, proceeding, or 

9 hearing under this paragraph. The rem10 edies and procedures otherwise provided 

11 for under this subparagraph shall be avail12 able to aggrieved individuals with respect 

13 to violations of this clause. 

14 ‘‘(5) ADDITIONAL REPORTING.— 

15 ‘‘(A) REPORTING WITH RESPECT TO

16 GROUP HEALTH PLANS OFFERED BY SMALL

17 EMPLOYERS.—For plan years beginning on or 

18 after January 1, 2025, not less frequently than 

19 annually, an entity providing pharmacy benefit 

20 management services on behalf of a group 

21 health plan that is not a covered group health 

22 plan shall submit to the plan sponsor of such 

23 group health plan a report in accordance with 

24 this paragraph, and make such report available 

25 to the plan sponsor in a machine-readable forVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
19 

•S 1339 RS

1 mat, and such other formats as the Secretary, 

2 the Secretary of Health and Human Services, 

3 and the Secretary of the Treasury may deter4 mine. Each such report shall include, with re5 spect to the applicable group health plan, the 

6 information described in subparagraphs (A), 

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

8 ‘‘(B) OPT-IN FOR GROUP HEALTH INSUR9 ANCE COVERAGE.— 

10 ‘‘(i) IN GENERAL.—A plan sponsor 

11 may, on an annual basis, beginning with 

12 plan years beginning on or after January 

13 1, 2025, elect to require a health insurance 

14 issuer offering group health insurance cov15 erage to submit to such plan sponsor a re16 port in accordance with this subsection. 

17 ‘‘(ii) CONTENTS OF REPORTS.— 

18 ‘‘(I) COVERED GROUP HEALTH

19 INSURANCE COVERAGE.—In the case 

20 of an issuer that offers covered group 

21 health insurance coverage, a report 

22 provided pursuant to clause (i) shall 

23 include, with respect to the applicable 

24 covered group health insurance cov25 erage, the information required under 


pbinns on DSKJLVW7X2PROD with $$_JOB
20 

•S 1339 RS

1 paragraph (1) for covered group 

2 health plans. 

3 ‘‘(II) OTHER GROUP HEALTH IN4 SURANCE COVERAGE.—In the case of 

5 an issuer that offers group health in6 surance coverage that is not covered 

7 group health insurance, a report pro8 vided pursuant to clause (i) shall in9 clude, with respect to the applicable 

10 group health insurance coverage, the 

11 information described in subpara12 graphs (A), (D), (E), (F), and (G) of 

13 paragraph (1). 

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

15 reports submitted in accordance with this 

16 subparagraph, paragraph (1) shall be ap17 plied by substituting ‘group health insur18 ance coverage’ or ‘health insurance issuer’, 

19 as applicable, for ‘group health plan’, 

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

21 appear in such paragraph. 

22 ‘‘(iv) REQUIRED REPORTING FOR ALL

23 GROUP HEALTH INSURANCE COVERAGE.— 

24 Each health insurance issuer of health in25 surance coverage shall annually submit the 


pbinns on DSKJLVW7X2PROD with $$_JOB
21 

•S 1339 RS

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

2 regardless of whether the plan sponsor 

3 made the election described in clause (i) 

4 for the applicable year. 

5 ‘‘(6) SUBMISSIONS TO GAO.—A health insur6 ance issuer offering group health insurance coverage 

7 or an entity providing pharmacy benefit manage8 ment services on behalf of a group health plan shall 

9 submit to the Comptroller General of the United 

10 States each of the first 2 reports submitted to a 

11 plan sponsor under paragraph (1) or (5) with re12 spect to such coverage or plan, and other such re13 ports as requested, in accordance with the privacy 

14 requirements under paragraph (3), and such other 

15 information that the Comptroller General determines 

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

17 of the Pharmacy Benefit Manager Reform Act. 

18 ‘‘(7) STANDARD FORMATS.— 

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

20 1, 2024, the Secretary, the Secretary of Labor, 

21 and the Secretary of the Treasury shall specify, 

22 through rulemaking, standard formats for 

23 health insurance issuers and entities providing 

24 pharmacy benefit management services to sub25 mit reports required under this subsection. 


pbinns on DSKJLVW7X2PROD with $$_JOB
22 

•S 1339 RS

1 ‘‘(B) LIMITED FORM OF REPORT.—The 

2 Secretary, the Secretary of Labor, and the Sec3 retary of the Treasury shall define through 

4 rulemaking a limited form of the reports under 

5 paragraphs (1) and (2) required to be sub6 mitted to plan sponsors who also are drug man7 ufacturers, drug wholesalers, entities providing 

8 pharmacy benefit management services, or 

9 other direct participants in the drug supply 

10 chain, in order to prevent anti-competitive be11 havior. 

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

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

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

15 health insurance issuer offering group or individual 

16 health insurance coverage shall not charge partici17 pants and beneficiaries, and an entity providing 

18 pharmacy benefit management services under such a 

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

20 participants and beneficiaries, a price for a prescrip21 tion drug that exceeds the price paid to the phar22 macy for such drug, excluding penalties paid by the 

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

24 plan, issuer, or entity. 


pbinns on DSKJLVW7X2PROD with $$_JOB
23 

•S 1339 RS

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

2 of paragraph (1), penalties paid by pharmacies in3 clude only the following: 

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

5 a prescription drug was submitted fraudulently 

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

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

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

9 the pharmacy was inconsistent with the reim10 bursement terms in any contract between the 

11 pharmacy and the plan, issuer, or entity. 

12 ‘‘(C) A penalty paid if the pharmacist serv13 ices billed to the plan, issuer, or entity were not 

14 rendered by the pharmacy. 

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

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

17 on or after January 1, 2025, a third-party adminis18 trator of a group health plan, a health insurance 

19 issuer offering group health insurance coverage, or 

20 an entity providing pharmacy benefit management 

21 services under such health plan or health insurance 

22 coverage shall— 

23 ‘‘(A) remit 100 percent of rebates, fees, al24 ternative discounts, and other remuneration re25 ceived from any applicable entity that are reVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
24 

•S 1339 RS

1 lated to utilization of drugs under such health 

2 plan or health insurance coverage, to the group 

3 health plan; and 

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

5 by such third-party administrator, health insur6 ance issuer, or entity providing pharmacy ben7 efit management services with an applicable en8 tity remit 100 percent of rebates, fees, alter9 native discounts, and other remuneration re10 ceived to the third-party administrator, health 

11 insurance issuer, or entity providing pharmacy 

12 benefit management services. 

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

14 Such rebates, fees, alternative discounts, and other 

15 remuneration shall be— 

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

17 group health insurance coverage in a timely 

18 fashion after the period for which such rebates, 

19 fees, alternative discounts, or other remunera20 tion is calculated, and in no case later than 90 

21 days after the end of such period; 

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

23 group health plan sponsor, as described in para24 graphs (1) and (4) of subsection (b); 


pbinns on DSKJLVW7X2PROD with $$_JOB
25 

•S 1339 RS

1 ‘‘(C) available for audit by the plan spon2 sor, or a third-party designated by a plan spon3 sor not less than once per plan year; and 

4 ‘‘(D) returned to the issuer or entity pro5 viding pharmaceutical benefit management 

6 services by the group health plan if audits by 

7 such issuer or entity indicate that the amounts 

8 received are incorrect after such amounts have 

9 been paid to the group health plan. 

10 ‘‘(3) AUDIT OF REBATE CONTRACTS.—A third11 party administrator of a group health plan, a health 

12 insurance issuer offering group health insurance cov13 erage, or an entity providing pharmacy benefit man14 agement services under such health plan or health 

15 insurance coverage shall make rebate contracts with 

16 rebate aggregators or drug manufacturers available 

17 for audit by such plan sponsor or designated third18 party, subject to confidentiality agreements to pre19 vent re-disclosure of such contracts. 

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

21 may select an auditor for purposes of carrying out 

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

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

24 this subsection shall be construed to prohibit pay25 ments to entities offering pharmacy benefit manageVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
26 

•S 1339 RS

1 ment services for bona fide services using a fee 

2 structure not contemplated by this subsection, pro3 vided that such fees are transparent to group health 

4 plans and health insurance issuers. 

5 ‘‘(e) ENFORCEMENT.— 

6 ‘‘(1) IN GENERAL.—The Secretary, in consulta7 tion with the Secretary of Labor and the Secretary 

8 of the Treasury, shall enforce this section. 

9 ‘‘(2) FAILURE TO PROVIDE TIMELY INFORMA10 TION.—A health insurance issuer or an entity pro11 viding pharmacy benefit management services that 

12 violates subsection (a) or fails to provide information 

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

14 health insurance issuer, or entity providing phar15 macy benefit management services that violates sub16 section (c); or a third-party administrator of a group 

17 health plan, a health insurance issuer offering group 

18 health insurance coverage, or an entity providing 

19 pharmacy benefit management services that violates 

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

21 penalty in the amount of $10,000 for each day dur22 ing which such violation continues or such informa23 tion is not disclosed or reported. 

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

25 issuer, entity providing pharmacy benefit manageVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
27 

•S 1339 RS

1 ment services, or drug manufacturer that knowingly 

2 provides false information under this section shall be 

3 subject to a civil money penalty in an amount not 

4 to exceed $100,000 for each item of false informa5 tion. Such civil money penalty shall be in addition to 

6 other penalties as may be prescribed by law. 

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

8 1128A of the Social Security Act, other than sub9 sections (a) and (b) and the first sentence of sub10 section (c)(1) of such section shall apply to civil 

11 monetary penalties under this subsection in the 

12 same manner as such provisions apply to a penalty 

13 or proceeding under section 1128A of the Social Se14 curity Act. 

15 ‘‘(5) WAIVERS.—The Secretary may waive pen16 alties under paragraph (2), or extend the period of 

17 time for compliance with a requirement of this sec18 tion, for an entity in violation of this section that 

19 has made a good-faith effort to comply with this sec20 tion. 

21 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec22 tion shall be construed to permit a health insurance issuer, 

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

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

25 and Human Services to a report described in subsection 


pbinns on DSKJLVW7X2PROD with $$_JOB
28 

•S 1339 RS

1 (b)(1) or information related to compliance with sub2 section (a) by such issuer, plan, or entity. 

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

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

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

6 wholesaler, rebate aggregator (or other pur7 chasing entity designed to aggregate rebates), 

8 group purchasing organization, or associated 

9 third party; 

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

11 subcontractor of a group health plan, health in12 surance issuer, entity that provides pharmacy 

13 benefit management services on behalf of such 

14 a plan or issuer, or any entity described in sub15 paragraph (A); or 

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

17 the Secretary of Labor, and the Secretary of 

18 the Treasury may specify through rulemaking; 

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

20 coverage’ means health insurance coverage offered in 

21 connection with a group health plan maintained by 

22 a large employer; 

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

24 means a group health plan maintained by a large 

25 employer; 


pbinns on DSKJLVW7X2PROD with $$_JOB
29 

•S 1339 RS

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

2 prescription drug benefits under a group health plan 

3 or health insurance coverage, means the amount 

4 spent by a group health plan or health insurance 

5 issuer on prescription drug benefits, calculated be6 fore the application of manufacturer rebates, fees, 

7 alternative discounts, or other remuneration; 

8 ‘‘(5) the term ‘large employer’ means, in con9 nection with a group health plan with respect to a 

10 calendar year and a plan year, an employer who em11 ployed an average of at least 50 employees on busi12 ness days during the preceding calendar year and 

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

14 the plan year; 

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

16 prescription drug benefits under a group health plan 

17 or health insurance coverage, means the amount 

18 spent by a group health plan or health insurance 

19 issuer on prescription drug benefits, calculated after 

20 the application of manufacturer rebates, fees, alter21 native discounts, or other remuneration; 

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

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

24 Retirement Income Security Act of 1974; 


pbinns on DSKJLVW7X2PROD with $$_JOB
30 

•S 1339 RS

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

2 given such term by the Secretary, the Secretary of 

3 Labor, and the Secretary of the Treasury, through 

4 notice and comment rulemaking; 

5 ‘‘(9) the term ‘small employer’ means, in con6 nection with a group health plan with respect to a 

7 calendar year and a plan year, an employer who em8 ployed an average of at least 1 but not more than 

9 49 employees on business days during the preceding 

10 calendar year and who employs at least 1 employee 

11 on the first day of the plan year; and 

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

13 the meaning given such term in section 

14 1847A(c)(6)(B) of the Social Security Act.’’; and 

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

16 (A) in subsection (a)— 

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

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

19 ‘‘part D’’; and 

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

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

22 ‘‘part D’’; 

23 (B) in subsection (b)— 


pbinns on DSKJLVW7X2PROD with $$_JOB
31 

•S 1339 RS

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

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

3 ‘‘part D’’; 

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

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

6 ‘‘part D’’; and 

7 (iii) in paragraph (2)(C)(ii), by insert8 ing ‘‘(other than section 2799A–11)’’ after 

9 ‘‘part D’’. 

10 (b) ERISA.— 

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

12 Employee Retirement Income Security Act of 1974 

13 (29 U.S.C. 1021 et seq.) is amended— 

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

15 1185 et seq.), by adding at the end the fol16 lowing: 

17 ‘‘SEC. 726. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR18 MACY BENEFIT MANAGEMENT SERVICES. 

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

20 after January 1, 2025, a group health plan (or health in21 surance issuer offering group health insurance coverage 

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

23 pharmacy benefit management services on behalf of such 

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

25 applicable entity that limits the disclosure of information 


pbinns on DSKJLVW7X2PROD with $$_JOB
32 

•S 1339 RS

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

2 or issuer, or an entity providing pharmacy benefit manage3 ment services on behalf of a plan or issuer, from making 

4 the reports described in subsection (b). 

5 ‘‘(b) REPORTS.— 

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

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

8 than annually, an entity providing pharmacy benefit 

9 management services on behalf of a covered group 

10 health plan shall submit to the plan sponsor of such 

11 covered group health plan a report in accordance 

12 with this subsection and make such report available 

13 to the plan sponsor in a machine-readable format 

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

15 Each such report shall include, with respect to the 

16 covered group health plan— 

17 ‘‘(A) as applicable, information collected 

18 from drug manufacturers by such issuer or en19 tity on the total amount of copayment assist20 ance dollars paid, or copayment cards applied, 

21 that were funded by the drug manufacturer 

22 with respect to the participants and bene23 ficiaries in such plan; 

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

25 plan or entity providing pharmacy benefit manVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
33 

•S 1339 RS

1 agement services that was billed during the re2 porting period, including, with respect to each 

3 such drug during the reporting period— 

4 ‘‘(i) the brand name, generic or non5 proprietary name, and National Drug 

6 Code; 

7 ‘‘(ii) the number of participants and 

8 beneficiaries for whom the drug was billed 

9 during the reporting period, the total num10 ber of prescription claims for the drug (in11 cluding original prescriptions and refills), 

12 and the total number of dosage units of 

13 the drug dispensed across the reporting pe14 riod; 

15 ‘‘(iii) for each claim or dosage unit de16 scribed in clause (ii), the type of dis17 pensing channel used, such as retail, mail 

18 order, or specialty pharmacy; 

19 ‘‘(iv) the wholesale acquisition cost, 

20 listed as cost per days supply, cost per dos21 age unit, and cost per typical course of 

22 treatment (as applicable); 

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

24 by participants and beneficiaries on such 

25 drug after application of any benefits 


pbinns on DSKJLVW7X2PROD with $$_JOB
34 

•S 1339 RS

1 under the plan or coverage, including par2 ticipant and beneficiary spending through 

3 copayments, coinsurance, and deductibles, 

4 but not including any amounts spent by 

5 participants and beneficiaries on drugs not 

6 covered under the plan or coverage or for 

7 which no claim is submitted to the plan or 

8 coverage; and 

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

10 spending by the plan exceeded $10,000 

11 and that is one of the 50 prescription 

12 drugs for which the group health plan 

13 spent the most on prescription drug bene14 fits during the reporting period— 

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

16 the same therapeutic class, including 

17 brand name drugs and biological 

18 products and generic drugs or bio19 similar biological products that are in 

20 the same therapeutic class as such 

21 drug; and 

22 ‘‘(II) if applicable, the rationale 

23 for preferred formulary placement of 

24 such drug in that therapeutic class, 


pbinns on DSKJLVW7X2PROD with $$_JOB
35 

•S 1339 RS

1 selected from a list of standard ra2 tionales established by the Secretary; 

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

4 drugs that were dispensed under the health 

5 plan during the reporting period, and, with re6 spect to each such therapeutic class of drugs, 

7 during the reporting period— 

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

9 before rebates, fees, alternative discounts, 

10 or other remuneration; 

11 ‘‘(ii) the number of participants and 

12 beneficiaries who filled a prescription for a 

13 drug in that class; 

14 ‘‘(iii) if applicable to that class, a de15 scription of the formulary tiers and utiliza16 tion management mechanisms (such as 

17 prior authorization or step therapy) em18 ployed for drugs in that class; 

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

20 by participants and beneficiaries, including 

21 participant and beneficiary spending 

22 through copayments, coinsurance, and 

23 deductibles; and 


pbinns on DSKJLVW7X2PROD with $$_JOB
36 

•S 1339 RS

1 ‘‘(v) for each therapeutic class under 

2 which 3 or more drugs are included on the 

3 formulary of such plan— 

4 ‘‘(I) the amount received, or ex5 pected to be received, by such entity, 

6 from an applicable entity, in rebates, 

7 fees, alternative discounts, or other 

8 remuneration that— 

9 ‘‘(aa) has been paid, or will 

10 be paid, by such an applicable 

11 entity for claims incurred during 

12 the reporting period; or 

13 ‘‘(bb) is related to utilization 

14 of drugs or drug spending; 

15 ‘‘(II) the total net spending by 

16 the health plan on that class of drugs; 

17 and 

18 ‘‘(III) the net price per typical 

19 course of treatment or 30-day supply 

20 incurred by the health plan and its 

21 participants and beneficiaries, after 

22 rebates, fees, alternative discounts, or 

23 other remuneration provided by an 

24 applicable entity, for drugs dispensed 


pbinns on DSKJLVW7X2PROD with $$_JOB
37 

•S 1339 RS

1 within such therapeutic class during 

2 the reporting period; 

3 ‘‘(D) total gross spending on prescription 

4 drugs by the plan during the reporting period, 

5 before rebates, fees, alternative discounts, or 

6 other remuneration provided by an applicable 

7 entity; 

8 ‘‘(E) the total amount received, or ex9 pected to be received, by the health plan, from 

10 an applicable entity, in rebates, fees, alternative 

11 discounts, and other remuneration received 

12 from any such entities, related to utilization of 

13 drug or drug spending under that health plan 

14 during the reporting period; 

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

16 drugs by the health plan during the reporting 

17 period; 

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

19 rebates, fees, or any other type of compensation 

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

21 to brokers, consultants, advisors, or any other 

22 individual or firm who referred the group health 

23 plan’s business to the pharmacy benefit man24 ager; and 


pbinns on DSKJLVW7X2PROD with $$_JOB
38 

•S 1339 RS

1 ‘‘(H) a summary document that includes 

2 such information described in subparagraphs 

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

4 useful for plan sponsors for purposes of select5 ing pharmacy benefit management services, 

6 such as an estimated net price to plan sponsor 

7 and participant or beneficiary, a cost per claim, 

8 the fee structure or reimbursement model, and 

9 estimated cost per participant or beneficiary. 

10 ‘‘(2) SUPPLEMENTARY REPORTING FOR INTRA11 COMPANY PRESCRIPTION DRUG TRANSACTIONS.— 

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

13 issuer offering covered group health insurance 

14 coverage or an entity providing pharmacy ben15 efit management services under a covered group 

16 health plan or covered group health insurance 

17 coverage shall submit, together with the report 

18 under paragraph (1), a supplementary report 

19 every 6 months to the plan sponsor that in20 cludes— 

21 ‘‘(i) an explanation of any benefit de22 sign parameters that encourage or require 

23 participants and beneficiaries in the plan 

24 or coverage to fill prescriptions at mail 

25 order, specialty, or retail pharmacies that 


pbinns on DSKJLVW7X2PROD with $$_JOB
39 

•S 1339 RS

1 are wholly or partially-owned by that issuer 

2 or entity providing pharmacy benefit man3 agement services under such plan or cov4 erage, including mandatory mail and spe5 cialty home delivery programs, retail and 

6 mail auto-refill programs, and copayment 

7 incentives funded by an entity providing 

8 pharmacy benefit management services; 

9 ‘‘(ii) the percentage of total prescrip10 tions charged to the plan, coverage, or par11 ticipants and beneficiaries in the plan or 

12 coverage, that were dispensed by mail 

13 order, specialty, or retail pharmacies that 

14 are wholly or partially-owned by the issuer 

15 or entity providing pharmacy benefit man16 agement services; and 

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

18 such wholly or partially-owned pharmacy 

19 and charged to the plan or coverage, or 

20 participants and beneficiaries of the plan 

21 or coverage, during the applicable quarter, 

22 and, with respect to each drug— 

23 ‘‘(I) the amounts charged, per 

24 dosage unit, per course of treatment, 

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


pbinns on DSKJLVW7X2PROD with $$_JOB
40 

•S 1339 RS

1 supply, with respect to participants 

2 and beneficiaries in the plan or cov3 erage, including amounts charged to 

4 the plan or coverage and amounts 

5 charged to the participants and bene6 ficiaries; 

7 ‘‘(II) the median amount charged 

8 to the plan or coverage, per dosage 

9 unit, per course of treatment, per 30- 

10 day supply, and per 90-day supply, in11 cluding amounts paid by the partici12 pants and beneficiaries, when the 

13 same drug is dispensed by other phar14 macies that are not wholly or par15 tially-owned by the issuer or entity 

16 and that are included in the pharmacy 

17 network of that plan or coverage; 

18 ‘‘(III) the interquartile range of 

19 the costs, per dosage unit, per course 

20 of treatment, per 30-day supply, and 

21 per 90-day supply, including amounts 

22 paid by the participants and bene23 ficiaries, when the same drug is dis24 pensed by other pharmacies that are 

25 not wholly or partially-owned by the 


pbinns on DSKJLVW7X2PROD with $$_JOB
41 

•S 1339 RS

1 issuer or entity and that are included 

2 in the pharmacy network of that plan 

3 or coverage; 

4 ‘‘(IV) the lowest cost, per dosage 

5 unit, per course of treatment, per 30- 

6 day supply, and per 90-day supply, 

7 for such drug, including amounts 

8 charged to the plan or issuer and par9 ticipants and beneficiaries, that is 

10 available from any pharmacy included 

11 in the network of the plan or cov12 erage; 

13 ‘‘(V) the net acquisition cost per 

14 dosage unit and for a 30 day-supply, 

15 and the acquisition cost per typical 

16 course of treatment, if the drug is 

17 subject to a maximum price discount; 

18 and 

19 ‘‘(VI) other information with re20 spect to the cost of the drug, as deter21 mined by the Secretary, such as aver22 age sales price, wholesale acquisition 

23 cost, and national average drug acqui24 sition cost per dosage unit, per typical 

25 course of treatment, or per 30-day 


pbinns on DSKJLVW7X2PROD with $$_JOB
42 

•S 1339 RS

1 supply, for such drug, including 

2 amounts charged to the plan or issuer 

3 and participants and beneficiaries 

4 among all pharmacies included in the 

5 network of the plan or coverage. 

6 ‘‘(B) PLANS AND COVERAGE OFFERED BY

7 SMALL EMPLOYERS.—A health insurance issuer 

8 offering covered group health insurance cov9 erage that is not covered group health insur10 ance coverage or an entity providing pharmacy 

11 benefit management services under a group 

12 health plan that is not a covered group health 

13 plan or under group health insurance coverage 

14 that is not covered group health insurance cov15 erage that conducts transactions with a wholly 

16 or partially-owned pharmacy shall submit, to17 gether with the report under paragraph (1), a 

18 supplementary report every 6 months to the 

19 plan sponsor that includes the information de20 scribed in clauses (i) and (ii) of subparagraph 

21 (A). 

22 ‘‘(3) PRIVACY REQUIREMENTS.— 

23 ‘‘(A) RELATIONSHIP TO HIPAA REGULA24 TIONS.—Nothing in this section shall be con25 strued to modify the requirements for the creVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
43 

•S 1339 RS

1 ation, receipt, maintenance, or transmission of 

2 protected health information under the privacy, 

3 security, breach notification, and enforcement 

4 regulations in parts 160 and 164 of title 45, 

5 Code of Federal Regulations (or successor regu6 lations). 

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

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

9 summary health information, as defined in sec10 tion 164.504(a) of title 45, Code of Federal 

11 Regulations (or successor regulations). 

12 ‘‘(C) CLARIFICATION REGARDING CERTAIN

13 DISCLOSURES OF INFORMATION.— 

14 ‘‘(i) REASONABLE RESTRICTIONS.— 

15 Nothing in this section prevents a health 

16 insurance issuer offering group health in17 surance coverage or an entity providing 

18 pharmacy benefit management services on 

19 behalf of a group health plan or group 

20 health insurance coverage from placing 

21 reasonable restrictions on the public disclo22 sure of the information contained in a re23 port under paragraph (1) or (2). 

24 ‘‘(ii) LIMITATIONS.—A health insur25 ance issuer offering group health insurance 


pbinns on DSKJLVW7X2PROD with $$_JOB
44 

•S 1339 RS

1 coverage or an entity providing pharmacy 

2 benefit management services on behalf of a 

3 group health plan or group health insur4 ance coverage may not restrict disclosure 

5 of such reports to the Department of 

6 Health and Human Services, the Depart7 ment of Labor, the Department of the 

8 Treasury, or any other Federal agency re9 sponsible for enforcement activities under 

10 this section for purposes of enforcement 

11 under this section or other applicable law, 

12 or to the Comptroller General of the 

13 United States in accordance with para14 graph (6). 

15 ‘‘(4) USE AND DISCLOSURE BY PLAN SPON16 SORS.— 

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

18 not— 

19 ‘‘(i) fail or refuse to hire, or dis20 charge, any employee, or otherwise dis21 criminate against any employee with re22 spect to the compensation, terms, condi23 tions, or privileges of employment of the 

24 employee, because of information sub25 mitted under paragraph (1) or (2) attribVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
45 

•S 1339 RS

1 uted to the employee or a dependent of the 

2 employee; or 

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

4 employees of the employer in any way that 

5 would deprive or tend to deprive any em6 ployee of employment opportunities or oth7 erwise adversely affect the status of the 

8 employee as an employee, because of infor9 mation submitted under paragraph (1) or 

10 (2) attributed to the employee or a depend11 ent of the employee. 

12 ‘‘(B) DISCLOSURE AND REDISCLOSURE.— 

13 A plan sponsor shall not disclose the informa14 tion received under paragraph (1) or (2) ex15 cept— 

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

17 researcher if the research is conducted in 

18 compliance with the regulations and pro19 tections provided for under part 46 of title 

20 45, Code of Federal Regulations (or suc21 cessor regulations); 

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

23 court, except that the plan sponsor may 

24 disclose only the information expressly au25 thorized by such order; 


pbinns on DSKJLVW7X2PROD with $$_JOB
46 

•S 1339 RS

1 ‘‘(iii) to the Department of Health 

2 and Human Services, the Department of 

3 Labor, the Department of the Treasury, or 

4 other Federal agency responsible for en5 forcement activities under this section; or 

6 ‘‘(iv) to a contractor or agent for pur7 poses of health plan administration, if such 

8 contractor or agent agrees, in writing, to 

9 abide by the same use and disclosure re10 strictions as the plan sponsor. 

11 ‘‘(C) RELATIONSHIP TO HIPAA REGULA12 TIONS.—With respect to the regulations pro13 mulgated by the Secretary of Health and 

14 Human Services under part C of title XI of the 

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

16 and section 264 of the Health Insurance Port17 ability and Accountability Act of 1996 (42 

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

19 prohibit a covered entity (as defined for pur20 poses of such regulations) from any use or dis21 closure of health information that is authorized 

22 for the covered entity under such regulations. 

23 The previous sentence does not affect the au24 thority of such Secretary to modify such regula25 tions. 


pbinns on DSKJLVW7X2PROD with $$_JOB
47 

•S 1339 RS

1 ‘‘(D) ENFORCEMENT.— 

2 ‘‘(i) IN GENERAL.—The powers, pro3 cedures, and remedies provided in section 

4 207 of the Genetic Information Non5 discrimination Act (42 U.S.C. 2000ff–6) to 

6 a person alleging a violation of title II of 

7 such Act shall be the powers, procedures, 

8 and remedies this subparagraph provides 

9 for any person alleging a violation of this 

10 paragraph. 

11 ‘‘(ii) PROHIBITION AGAINST RETALIA12 TION.—No person shall discriminate 

13 against any individual because such indi14 vidual has opposed any act or practice 

15 made unlawful by this paragraph or be16 cause such individual made a charge, testi17 fied, assisted, or participated in any man18 ner in an investigation, proceeding, or 

19 hearing under this paragraph. The rem20 edies and procedures otherwise provided 

21 for under this subparagraph shall be avail22 able to aggrieved individuals with respect 

23 to violations of this clause. 

24 ‘‘(5) ADDITIONAL REPORTING.— 


pbinns on DSKJLVW7X2PROD with $$_JOB
48 

•S 1339 RS

1 ‘‘(A) REPORTING WITH RESPECT TO

2 GROUP HEALTH PLANS OFFERED BY SMALL

3 EMPLOYERS.—For plan years beginning on or 

4 after January 1, 2025, not less frequently than 

5 annually, an entity providing pharmacy benefit 

6 management services on behalf of a group 

7 health plan that is not a covered group health 

8 plan shall submit to the plan sponsor of such 

9 group health plan a report in accordance with 

10 this paragraph, and make such report available 

11 to the plan sponsor in a machine-readable for12 mat, and such other formats as the Secretary, 

13 the Secretary of Health and Human Services, 

14 and the Secretary of Labor may determine. 

15 Each such report shall include, with respect to 

16 the applicable group health plan, the informa17 tion described in subparagraphs (A), (D), (E), 

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

19 ‘‘(B) OPT-IN FOR GROUP HEALTH INSUR20 ANCE COVERAGE.— 

21 ‘‘(i) IN GENERAL.—A plan sponsor 

22 may, on an annual basis, beginning with 

23 plan years beginning on or after January 

24 1, 2025, elect to require a health insurance 

25 issuer offering group health insurance covVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
49 

•S 1339 RS

1 erage to submit to such plan sponsor a re2 port in accordance with this subsection. 

3 ‘‘(ii) CONTENTS OF REPORTS.— 

4 ‘‘(I) COVERED GROUP HEALTH

5 INSURANCE COVERAGE.—In the case 

6 of an issuer that offers covered group 

7 health insurance coverage, a report 

8 provided pursuant to clause (i) shall 

9 include, with respect to the applicable 

10 covered group health insurance cov11 erage, the information required under 

12 paragraph (1) for covered group 

13 health plans. 

14 ‘‘(II) OTHER GROUP HEALTH IN15 SURANCE COVERAGE.—In the case of 

16 an issuer that offers group health in17 surance coverage that is not covered 

18 group health insurance, a report pro19 vided pursuant to clause (i) shall in20 clude, with respect to the applicable 

21 group health insurance coverage, the 

22 information described in subpara23 graphs (A), (D), (E), (F), and (G) of 

24 paragraph (1). 


pbinns on DSKJLVW7X2PROD with $$_JOB
50 

•S 1339 RS

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

2 reports submitted in accordance with this 

3 subparagraph, paragraph (1) shall be ap4 plied by substituting ‘group health insur5 ance coverage’ or ‘health insurance issuer’, 

6 as applicable, for ‘group health plan’, 

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

8 appear in such paragraph. 

9 ‘‘(iv) REQUIRED REPORTING FOR ALL

10 GROUP HEALTH INSURANCE COVERAGE.— 

11 Each health insurance issuer of health in12 surance coverage shall annually submit the 

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

14 regardless of whether the plan sponsor 

15 made the election described in clause (i) 

16 for the applicable year. 

17 ‘‘(6) SUBMISSIONS TO GAO.—A health insur18 ance issuer offering group health insurance coverage 

19 or an entity providing pharmacy benefit manage20 ment services on behalf of a group health plan shall 

21 submit to the Comptroller General of the United 

22 States each of the first 2 reports submitted to a 

23 plan sponsor under paragraph (1) or (5) with re24 spect to such coverage or plan, and other such re25 ports as requested, in accordance with the privacy 


pbinns on DSKJLVW7X2PROD with $$_JOB
51 

•S 1339 RS

1 requirements under paragraph (3), and such other 

2 information that the Comptroller General determines 

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

4 of the Pharmacy Benefit Manager Reform Act. 

5 ‘‘(7) STANDARD FORMATS.— 

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

7 1, 2024, the Secretary, the Secretary of Health 

8 and Human Services, and the Secretary of the 

9 Treasury shall specify, through rulemaking, 

10 standard formats for health insurance issuers 

11 and entities providing pharmacy benefit man12 agement services to submit reports required 

13 under this subsection. 

14 ‘‘(B) LIMITED FORM OF REPORT.—The 

15 Secretary, the Secretary of Health and Human 

16 Services, and the Secretary of the Treasury 

17 shall define through rulemaking a limited form 

18 of the reports under paragraphs (1) and (2) re19 quired to be submitted to plan sponsors who 

20 also are drug manufacturers, drug wholesalers, 

21 entities providing pharmacy benefit manage22 ment services, or other direct participants in 

23 the drug supply chain, in order to prevent anti24 competitive behavior. 

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


pbinns on DSKJLVW7X2PROD with $$_JOB
52 

•S 1339 RS

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

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

3 health insurance issuer offering group health insur4 ance coverage shall not charge participants and 

5 beneficiaries, and an entity providing pharmacy ben6 efit management services under such a plan or cov7 erage shall not charge the plan, issuer, or partici8 pants and beneficiaries, a price for a prescription 

9 drug that exceeds the price paid to the pharmacy for 

10 such drug, excluding penalties paid by the pharmacy 

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

12 or entity. 

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

14 of paragraph (1), penalties paid by pharmacies in15 clude only the following: 

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

17 a prescription drug was submitted fraudulently 

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

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

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

21 the pharmacy was inconsistent with the reim22 bursement terms in any contract between the 

23 pharmacy and the plan, issuer, or entity. 


pbinns on DSKJLVW7X2PROD with $$_JOB
53 

•S 1339 RS

1 ‘‘(C) A penalty paid if the pharmacist serv2 ices billed to the plan, issuer, or entity were not 

3 rendered by the pharmacy. 

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

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

6 on or after January 1, 2025, a third-party adminis7 trator of a group health plan, a health insurance 

8 issuer offering group health insurance coverage, or 

9 an entity providing pharmacy benefit management 

10 services under such health plan or health insurance 

11 coverage shall— 

12 ‘‘(A) remit 100 percent of rebates, fees, al13 ternative discounts, and other applicable remu14 neration received from any applicable entity 

15 that are related to utilization of drugs under 

16 such health plan or health insurance coverage, 

17 to the group health plan; and 

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

19 by such third-party administrator, health insur20 ance issuer, or entity providing pharmacy ben21 efit management services with an applicable en22 tity remit 100 percent of rebates, fees, alter23 native discounts, and other remuneration re24 ceived to the third-party administrator, health 


pbinns on DSKJLVW7X2PROD with $$_JOB
54 

•S 1339 RS

1 insurance issuer, or entity providing pharmacy 

2 benefit management services. 

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

4 Such rebates, fees, alternative discounts, and other 

5 remuneration shall be— 

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

7 group health insurance coverage in a timely 

8 fashion after the period for which such rebates, 

9 fees, alternative discounts, or other remunera10 tion is calculated, and in no case later than 90 

11 days after the end of such period; 

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

13 group health plan sponsor, as described in para14 graphs (1) and (4) of subsection (b); 

15 ‘‘(C) available for audit by the plan spon16 sor, or a third-party designated by a plan spon17 sor not less than once per plan year; and 

18 ‘‘(D) returned to the issuer or entity pro19 viding pharmaceutical benefit management 

20 services by the group health plan if audits by 

21 such issuer or entity indicate that the amounts 

22 received are incorrect after such amounts have 

23 been paid to the group health plan. 

24 ‘‘(3) AUDIT OF REBATE CONTRACTS.—A third25 party administrator of a group health plan, a health 


pbinns on DSKJLVW7X2PROD with $$_JOB
55 

•S 1339 RS

1 insurance issuer offering group health insurance cov2 erage, or an entity providing pharmacy benefit man3 agement services under such health plan or health 

4 insurance coverage shall make rebate contracts with 

5 rebate aggregators or drug manufacturers available 

6 for audit by such plan sponsor or designated third7 party, subject to confidentiality agreements to pre8 vent re-disclosure of such contracts. 

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

10 may select an auditor for purposes of carrying out 

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

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

13 this subsection shall be construed to prohibit pay14 ments to entities offering pharmacy benefit manage15 ment services for bona fide services using a fee 

16 structure not contemplated by this subsection, pro17 vided that such fees are transparent to group health 

18 plans and health insurance issuers. 

19 ‘‘(e) ENFORCEMENT.— 

20 ‘‘(1) IN GENERAL.—The Secretary, in consulta21 tion with the Secretary of Health and Human Serv22 ices and the Secretary of the Treasury, shall enforce 

23 this section. 

24 ‘‘(2) FAILURE TO PROVIDE TIMELY INFORMA25 TION.—A health insurance issuer or an entity proVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
56 

•S 1339 RS

1 viding pharmacy benefit management services that 

2 violates subsection (a) or fails to provide information 

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

4 health insurance issuer, or entity providing phar5 macy benefit management services that violates sub6 section (c); or a third-party administrator of a group 

7 health plan, a health insurance issuer offering group 

8 health insurance coverage, or an entity providing 

9 pharmacy benefit management services that violates 

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

11 penalty in the amount of $10,000 for each day dur12 ing which such violation continues or such informa13 tion is not disclosed or reported. 

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

15 issuer, entity providing pharmacy benefit manage16 ment services, or drug manufacturer that knowingly 

17 provides false information under this section shall be 

18 subject to a civil money penalty in an amount not 

19 to exceed $100,000 for each item of false informa20 tion. Such civil money penalty shall be in addition to 

21 other penalties as may be prescribed by law. 

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

23 1128A of the Social Security Act, other than sub24 sections (a) and (b) and the first sentence of sub25 section (c)(1) of such section shall apply to civil 


pbinns on DSKJLVW7X2PROD with $$_JOB
57 

•S 1339 RS

1 monetary penalties under this subsection in the 

2 same manner as such provisions apply to a penalty 

3 or proceeding under section 1128A of the Social Se4 curity Act. 

5 ‘‘(5) WAIVERS.—The Secretary may waive pen6 alties under paragraph (2), or extend the period of 

7 time for compliance with a requirement of this sec8 tion, for an entity in violation of this section that 

9 has made a good-faith effort to comply with this sec10 tion. 

11 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec12 tion shall be construed to permit a health insurance issuer, 

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

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

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

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

17 plan, or entity. 

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

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

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

21 wholesaler, rebate aggregator (or other pur22 chasing entity designed to aggregate rebates), 

23 group purchasing organization, or associated 

24 third party; 


pbinns on DSKJLVW7X2PROD with $$_JOB
58 

•S 1339 RS

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

2 subcontractor of a group health plan, health in3 surance issuer, entity that provides pharmacy 

4 benefit management services on behalf of such 

5 a plan or issuer, or any entity described in sub6 paragraph (A); or 

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

8 the Secretary of Health and Human Services, 

9 and the Secretary of the Treasury may specify 

10 through rulemaking; 

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

12 coverage’ means health insurance coverage offered in 

13 connection with a group health plan maintained by 

14 a large employer; 

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

16 means a group health plan maintained by a large 

17 employer; 

18 ‘‘(4) the term ‘gross 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 be23 fore the application of manufacturer rebates, fees, 

24 alternative discounts, or other remuneration; 


pbinns on DSKJLVW7X2PROD with $$_JOB
59 

•S 1339 RS

1 ‘‘(5) the term ‘large employer’ means, in con2 nection with a group health plan with respect to a 

3 calendar year and a plan year, an employer who em4 ployed an average of at least 50 employees on busi5 ness days during the preceding calendar year and 

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

7 the plan year; 

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

9 prescription drug benefits under a group health plan 

10 or health insurance coverage, means the amount 

11 spent by a group health plan or health insurance 

12 issuer on prescription drug benefits, calculated after 

13 the application of manufacturer rebates, fees, alter14 native discounts, or other remuneration; 

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

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

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

18 given such term by the Secretary, the Secretary of 

19 Health and Human Services, and the Secretary of 

20 the Treasury, through notice and comment rule21 making; 

22 ‘‘(9) the term ‘small employer’ means, in con23 nection with a group health plan with respect to a 

24 calendar year and a plan year, an employer who em25 ployed an average of at least 1 but not more than 


pbinns on DSKJLVW7X2PROD with $$_JOB
60 

•S 1339 RS

1 49 employees on business days during the preceding 

2 calendar year and who employs at least 1 employee 

3 on the first day of the plan year; and 

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

5 the meaning given such term in section 

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

7 U.S.C. 1395w–3a(c)(6)(B)).’’; and 

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

9 1132(b)(3)), by inserting ‘‘(other than section 

10 726)’’ after ‘‘part 7’’. 

11 (2) CLERICAL AMENDMENT.—The table of con12 tents in section 1 of the Employee Retirement In13 come Security Act of 1974 (29 U.S.C. 1001 et seq.) 

14 is amended by inserting after the item relating to 

15 section 725 the following new item: 

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

services.’’. 

16 (c) INTERNAL REVENUE CODE.— 

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

18 100 of the Internal Revenue Code of 1986 is amend19 ed by adding at the end the following: 

20 ‘‘SEC. 9826. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR21 MACY BENEFIT MANAGEMENT SERVICES. 

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

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

24 providing pharmacy benefit management services on beVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00060 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
61 

•S 1339 RS

1 half of such a plan shall not enter into a contract with 

2 an applicable entity that limits the disclosure of informa3 tion to plan sponsors in such a manner that prevents the 

4 plan, or an entity providing pharmacy benefit management 

5 services on behalf of a plan, from making the reports de6 scribed in subsection (b). 

7 ‘‘(b) REPORTS.— 

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

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

10 than annually, an entity providing pharmacy benefit 

11 management services on behalf of a covered group 

12 health plan shall submit to the plan sponsor of such 

13 covered group health plan a report in accordance 

14 with this subsection and make such report available 

15 to the plan sponsor in a machine-readable format 

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

17 Each such report shall include, with respect to the 

18 covered group health plan— 

19 ‘‘(A) as applicable, information collected 

20 from drug manufacturers by such entity on the 

21 total amount of copayment assistance dollars 

22 paid, or copayment cards applied, that were 

23 funded by the drug manufacturer with respect 

24 to the participants and beneficiaries in such 

25 plan; 


pbinns on DSKJLVW7X2PROD with $$_JOB
62 

•S 1339 RS

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

2 plan or entity providing pharmacy benefit man3 agement services that was billed during the re4 porting period, including, with respect to each 

5 such drug during the reporting period— 

6 ‘‘(i) the brand name, generic or non7 proprietary name, and National Drug 

8 Code; 

9 ‘‘(ii) the number of participants and 

10 beneficiaries for whom the drug was billed 

11 during the reporting period, the total num12 ber of prescription claims for the drug (in13 cluding original prescriptions and refills), 

14 and the total number of dosage units of 

15 the drug dispensed across the reporting pe16 riod; 

17 ‘‘(iii) for each claim or dosage unit de18 scribed in clause (ii), the type of dis19 pensing channel used, such as retail, mail 

20 order, or specialty pharmacy; 

21 ‘‘(iv) the wholesale acquisition cost, 

22 listed as cost per days supply, cost per dos23 age unit, and cost per typical course of 

24 treatment (as applicable); 


pbinns on DSKJLVW7X2PROD with $$_JOB
63 

•S 1339 RS

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

2 by participants and beneficiaries on such 

3 drug after application of any benefits 

4 under the plan, including participant and 

5 beneficiary spending through copayments, 

6 coinsurance, and deductibles, but not in7 cluding any amounts spent by participants 

8 and beneficiaries on drugs not covered 

9 under the plan or for which no claim is 

10 submitted to the plan; and 

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

12 spending by the plan exceeded $10,000 

13 and that is one of the 50 prescription 

14 drugs for which the group health plan 

15 spent the most on prescription drug bene16 fits during the reporting period— 

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

18 the same therapeutic class, including 

19 brand name drugs and biological 

20 products and generic drugs or bio21 similar biological products that are in 

22 the same therapeutic class as such 

23 drug; and 

24 ‘‘(II) if applicable, the rationale 

25 for preferred formulary placement of 


pbinns on DSKJLVW7X2PROD with $$_JOB
64 

•S 1339 RS

1 such drug in that therapeutic class, 

2 selected from a list of standard ra3 tionales established by the Secretary; 

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

5 drugs that were dispensed under the health 

6 plan during the reporting period, and, with re7 spect to each such therapeutic class of drugs, 

8 during the reporting period— 

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

10 before rebates, fees, alternative discounts, 

11 or other remuneration; 

12 ‘‘(ii) the number of participants and 

13 beneficiaries who filled a prescription for a 

14 drug in that class; 

15 ‘‘(iii) if applicable to that class, a de16 scription of the formulary tiers and utiliza17 tion management mechanisms (such as 

18 prior authorization or step therapy) em19 ployed for drugs in that class; 

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

21 by participants and beneficiaries, including 

22 participant and beneficiary spending 

23 through copayments, coinsurance, and 

24 deductibles; and 


pbinns on DSKJLVW7X2PROD with $$_JOB
65 

•S 1339 RS

1 ‘‘(v) for each therapeutic class under 

2 which 3 or more drugs are included on the 

3 formulary of such plan— 

4 ‘‘(I) the amount received, or ex5 pected to be received, by such entity, 

6 from an applicable entity, in rebates, 

7 fees, alternative discounts, or other 

8 remuneration that— 

9 ‘‘(aa) has been paid, or will 

10 be paid, by such an applicable 

11 entity for claims incurred during 

12 the reporting period; or 

13 ‘‘(bb) is related to utilization 

14 of drugs or drug spending; 

15 ‘‘(II) the total net spending by 

16 the health plan on that class of drugs; 

17 and 

18 ‘‘(III) the net price per typical 

19 course of treatment or 30-day supply 

20 incurred by the health plan and its 

21 participants and beneficiaries, after 

22 rebates, fees, alternative discounts, or 

23 other remuneration provided by an 

24 applicable entity, for drugs dispensed 


pbinns on DSKJLVW7X2PROD with $$_JOB
66 

•S 1339 RS

1 within such therapeutic class during 

2 the reporting period; 

3 ‘‘(D) total gross spending on prescription 

4 drugs by the plan during the reporting period, 

5 before rebates, fees, alternative discounts, or 

6 other remuneration provided by an applicable 

7 entity; 

8 ‘‘(E) the total amount received, or ex9 pected to be received, by the health plan, from 

10 an applicable entity, in rebates, fees, alternative 

11 discounts, and other remuneration received 

12 from any such entities, related to utilization of 

13 drug or drug spending under that health plan 

14 during the reporting period; 

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

16 drugs by the health plan during the reporting 

17 period; 

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

19 rebates, fees, or any other type of compensation 

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

21 of the Employee Retirement Income Security 

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

23 1108(b)(2)(B)(ii)(dd)(A))) to brokers, consult24 ants, advisors, or any other individual or firm 


pbinns on DSKJLVW7X2PROD with $$_JOB
67 

•S 1339 RS

1 who referred the group health plan’s business to 

2 the pharmacy benefit manager; and 

3 ‘‘(H) a summary document that includes 

4 such information described in subparagraphs 

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

6 useful for plan sponsors for purposes of select7 ing pharmacy benefit management services, 

8 such as an estimated net price to plan sponsor 

9 and participant or beneficiary, a cost per claim, 

10 the fee structure or reimbursement model, and 

11 estimated cost per participant or beneficiary. 

12 ‘‘(2) SUPPLEMENTARY REPORTING FOR INTRA13 COMPANY PRESCRIPTION DRUG TRANSACTIONS.— 

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

15 pharmacy benefit management services under a 

16 covered group health plan shall submit, to17 gether with the report under paragraph (1), a 

18 supplementary report every 6 months to the 

19 plan sponsor that includes— 

20 ‘‘(i) an explanation of any benefit de21 sign parameters that encourage or require 

22 participants and beneficiaries in the plan 

23 to fill prescriptions at mail order, specialty, 

24 or retail pharmacies that are wholly or 

25 partially-owned by that entity providing 


pbinns on DSKJLVW7X2PROD with $$_JOB
68 

•S 1339 RS

1 pharmacy benefit management services 

2 under such plan, including mandatory mail 

3 and specialty home delivery programs, re4 tail and mail auto-refill programs, and co5 payment incentives funded by an entity 

6 providing pharmacy benefit management 

7 services; 

8 ‘‘(ii) the percentage of total prescrip9 tions charged to the plan or participants 

10 and beneficiaries in the plan, that were 

11 dispensed by mail order, specialty, or retail 

12 pharmacies that are wholly or partially13 owned by the entity providing pharmacy 

14 benefit management services; and 

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

16 such wholly or partially-owned pharmacy 

17 and charged to the plan, or participants 

18 and beneficiaries of the plan, during the 

19 applicable quarter, and, with respect to 

20 each drug— 

21 ‘‘(I) the amounts charged, per 

22 dosage unit, per course of treatment, 

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

24 supply, with respect to participants 

25 and beneficiaries in the plan, includVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00068 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
69 

•S 1339 RS

1 ing amounts charged to the plan and 

2 amounts charged to the participants 

3 and beneficiaries; 

4 ‘‘(II) the median amount charged 

5 to the plan, per dosage unit, per 

6 course of treatment, per 30-day sup7 ply, and per 90-day supply, including 

8 amounts paid by the participants and 

9 beneficiaries, when the same drug is 

10 dispensed by other pharmacies that 

11 are not wholly or partially-owned by 

12 the entity and that are included in the 

13 pharmacy network of that plan; 

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 entity and that are included in the 

23 pharmacy network of that plan; 

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

25 unit, per course of treatment, per 30- 


pbinns on DSKJLVW7X2PROD with $$_JOB
70 

•S 1339 RS

1 day supply, and per 90-day supply, 

2 for such drug, including amounts 

3 charged to the plan and participants 

4 and beneficiaries, that is available 

5 from any pharmacy included in the 

6 network of the plan; 

7 ‘‘(V) the net acquisition cost per 

8 dosage unit and for a 30 day-supply, 

9 and the acquisition cost per typical 

10 course of treatment, if the drug is 

11 subject to a maximum price discount; 

12 and 

13 ‘‘(VI) other information with re14 spect to the cost of the drug, as deter15 mined by the Secretary, such as aver16 age sales price, wholesale acquisition 

17 cost, and national average drug acqui18 sition cost per dosage unit, per typical 

19 course of treatment, or per 30-day 

20 supply, for such drug, including 

21 amounts charged to the plan and par22 ticipants and beneficiaries among all 

23 pharmacies included in the network of 

24 the plan. 


pbinns on DSKJLVW7X2PROD with $$_JOB
71 

•S 1339 RS

1 ‘‘(B) PLANS OFFERED BY SMALL EMPLOY2 ERS.—An entity providing pharmacy benefit 

3 management services under a group health plan 

4 that is not a covered group health plan that 

5 conducts transactions with a wholly or partially6 owned pharmacy shall submit, together with the 

7 report under paragraph (1), a supplementary 

8 report every 6 months to the plan sponsor that 

9 includes the information described in clauses (i) 

10 and (ii) of subparagraph (A). 

11 ‘‘(3) PRIVACY REQUIREMENTS.— 

12 ‘‘(A) RELATIONSHIP TO HIPAA REGULA13 TIONS.—Nothing in this section shall be con14 strued to modify the requirements for the cre15 ation, receipt, maintenance, or transmission of 

16 protected health information under the privacy, 

17 security, breach notification, and enforcement 

18 regulations in parts 160 and 164 of title 45, 

19 Code of Federal Regulations (or successor regu20 lations). 

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

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

23 summary health information, as defined in sec24 tion 164.504(a) of title 45, Code of Federal 

25 Regulations (or successor regulations). 


pbinns on DSKJLVW7X2PROD with $$_JOB
72 

•S 1339 RS

1 ‘‘(C) CLARIFICATION REGARDING CERTAIN

2 DISCLOSURES OF INFORMATION.— 

3 ‘‘(i) REASONABLE RESTRICTIONS.— 

4 Nothing in this section prevents an entity 

5 providing pharmacy benefit management 

6 services on behalf of a group health plan 

7 from placing reasonable restrictions on the 

8 public disclosure of the information con9 tained in a report under paragraph (1) or 

10 (2). 

11 ‘‘(ii) LIMITATIONS.—An entity pro12 viding pharmacy benefit management serv13 ices on behalf of a group health plan or 

14 group health insurance coverage may not 

15 restrict disclosure of such reports to the 

16 Department of Health and Human Serv17 ices, the Department of Labor, the Depart18 ment of the Treasury, or any other Federal 

19 agency responsible for enforcement activi20 ties under this section for purposes of en21 forcement under this section or other ap22 plicable law, or to the Comptroller General 

23 of the United States in accordance with 

24 paragraph (6). 


pbinns on DSKJLVW7X2PROD with $$_JOB
73 

•S 1339 RS

1 ‘‘(4) USE AND DISCLOSURE BY PLAN SPON2 SORS.— 

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

4 not— 

5 ‘‘(i) fail or refuse to hire, or dis6 charge, any employee, or otherwise dis7 criminate against any employee with re8 spect to the compensation, terms, condi9 tions, or privileges of employment of the 

10 employee, because of information sub11 mitted under paragraph (1) or (2) attrib12 uted to the employee or a dependent of the 

13 employee; or 

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

15 employees of the employer in any way that 

16 would deprive or tend to deprive any em17 ployee of employment opportunities or oth18 erwise adversely affect the status of the 

19 employee as an employee, because of infor20 mation submitted under paragraph (1) or 

21 (2) attributed to the employee or a depend22 ent of the employee. 

23 ‘‘(B) DISCLOSURE AND REDISCLOSURE.— 

24 A plan sponsor shall not disclose the informaVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00073 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
74 

•S 1339 RS

1 tion received under paragraph (1) or (2) ex2 cept— 

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

4 researcher if the research is conducted in 

5 compliance with the regulations and pro6 tections provided for under part 46 of title 

7 45, Code of Federal Regulations (or suc8 cessor regulations); 

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

10 court, except that the plan sponsor may 

11 disclose only the information expressly au12 thorized by such order; 

13 ‘‘(iii) to the Department of Health 

14 and Human Services, the Department of 

15 Labor, the Department of the Treasury, or 

16 other Federal agency responsible for en17 forcement activities under this section; or 

18 ‘‘(iv) to a contractor or agent for pur19 poses of health plan administration, if such 

20 contractor or agent agrees, in writing, to 

21 abide by the same use and disclosure re22 strictions as the plan sponsor. 

23 ‘‘(C) RELATIONSHIP TO HIPAA REGULA24 TIONS.—With respect to the regulations pro25 mulgated by the Secretary of Health and 


pbinns on DSKJLVW7X2PROD with $$_JOB
75 

•S 1339 RS

1 Human Services under part C of title XI of the 

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

3 and section 264 of the Health Insurance Port4 ability and Accountability Act of 1996 (42 

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

6 prohibit a covered entity (as defined for pur7 poses of such regulations) from any use or dis8 closure of health information that is authorized 

9 for the covered entity under such regulations. 

10 The previous sentence does not affect the au11 thority of such Secretary to modify such regula12 tions. 

13 ‘‘(D) ENFORCEMENT.— 

14 ‘‘(i) IN GENERAL.—The powers, pro15 cedures, and remedies provided in section 

16 207 of the Genetic Information Non17 discrimination Act (42 U.S.C. 2000ff–6) to 

18 a person alleging a violation of title II of 

19 such Act shall be the powers, procedures, 

20 and remedies this subparagraph provides 

21 for any person alleging a violation of this 

22 paragraph. 

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

25 against any individual because such indiVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00075 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
76 

•S 1339 RS

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) REPORTING WITH RESPECT TO GROUP

12 HEALTH PLANS OFFERED BY SMALL EMPLOYERS.— 

13 For plan years beginning on or after January 1, 

14 2025, not less frequently than annually, an entity 

15 providing pharmacy benefit management services on 

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

17 group health plan shall submit to the plan sponsor 

18 of such group health plan a report in accordance 

19 with this paragraph, and make such report available 

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

21 Each such report shall include, with respect to the 

22 applicable group health plan, the information de23 scribed in subparagraphs (A), (D), (E), (F), (G), 

24 and (H) of paragraph (1). 


pbinns on DSKJLVW7X2PROD with $$_JOB
77 

•S 1339 RS

1 ‘‘(6) SUBMISSIONS TO GAO.—An entity pro2 viding pharmacy benefit management services on be3 half of a group health plan shall submit to the 

4 Comptroller General of the United States each of 

5 the first 2 reports submitted to a plan sponsor under 

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

7 other such reports as requested, in accordance with 

8 the privacy requirements under paragraph (3), and 

9 such other information that the Comptroller General 

10 determines necessary to carry out the study under 

11 section 2(f) of the Pharmacy Benefit Manager Re12 form Act. 

13 ‘‘(7) STANDARD FORMATS.— 

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

15 1, 2024, the Secretary, the Secretary of Health 

16 and Human Services, and the Secretary of 

17 Labor shall specify, through rulemaking, stand18 ard formats for health insurance issuers and 

19 entities providing pharmacy benefit manage20 ment services to submit reports required under 

21 this subsection. 

22 ‘‘(B) LIMITED FORM OF REPORT.—The 

23 Secretary, the Secretary of Health and Human 

24 Services, and the Secretary of Labor shall de25 fine through rulemaking a limited form of the 


pbinns on DSKJLVW7X2PROD with $$_JOB
78 

•S 1339 RS

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

2 to be submitted to plan sponsors who also are 

3 drug manufacturers, drug wholesalers, entities 

4 providing pharmacy benefit management serv5 ices, or other direct participants in the drug 

6 supply chain, in order to prevent anti-competi7 tive behavior. 

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

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

10 not charge participants and beneficiaries, and an en11 tity providing pharmacy benefit management serv12 ices under such a plan shall not charge the plan or 

13 participants and beneficiaries, a price for a prescrip14 tion drug that exceeds the price paid to the phar15 macy for such drug, excluding penalties paid by the 

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

17 plan or entity. 

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

19 of paragraph (1), penalties paid by pharmacies in20 clude only the following: 

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

22 a prescription drug was submitted fraudulently 

23 by the pharmacy to the plan or entity. 

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

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


pbinns on DSKJLVW7X2PROD with $$_JOB
79 

•S 1339 RS

1 the pharmacy was inconsistent with the reim2 bursement terms in any contract between the 

3 pharmacy and the plan or entity. 

4 ‘‘(C) A penalty paid if the pharmacist serv5 ices billed to the plan or entity were not ren6 dered by the pharmacy. 

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

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

9 on or after January 1, 2025, a third-party adminis10 trator of a group health plan or an entity providing 

11 pharmacy benefit management services under such 

12 health plan shall— 

13 ‘‘(A) remit 100 percent of rebates, fees, al14 ternative discounts, and other remuneration re15 ceived from any applicable entity that are re16 lated to utilization of drugs under such health 

17 plan, to the group health plan; and 

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

19 by such third-party administrator or entity pro20 viding pharmacy benefit management services 

21 with an applicable entity remit 100 percent of 

22 rebates, fees, alternative discounts, and other 

23 remuneration received to the third-party admin24 istrator or entity providing pharmacy benefit 

25 management services. 


pbinns on DSKJLVW7X2PROD with $$_JOB
80 

•S 1339 RS

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

2 Such rebates, fees, alternative discounts, and other 

3 remuneration shall be— 

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

5 a timely fashion after the period for which such 

6 rebates, fees, alternative discounts, or other re7 muneration is calculated, and in no case later 

8 than 90 days after the end of such period; 

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

10 group health plan sponsor, as described in para11 graphs (1) and (4) of subsection (b); 

12 ‘‘(C) available for audit by the plan spon13 sor, or a third-party designated by a plan spon14 sor not less than once per plan year; and 

15 ‘‘(D) returned to the issuer or entity pro16 viding pharmaceutical benefit management 

17 services by the group health plan if audits by 

18 such entity indicate that the amounts received 

19 are incorrect after such amounts have been paid 

20 to the group health plan. 

21 ‘‘(3) AUDIT OF REBATE CONTRACTS.—A third22 party administrator of a group health plan or an en23 tity providing pharmacy benefit management serv24 ices under such health plan shall make rebate con25 tracts with rebate aggregators or drug manufacturVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00080 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
81 

•S 1339 RS

1 ers available for audit by such plan sponsor or des2 ignated third-party, subject to confidentiality agree3 ments to prevent 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. 

14 ‘‘(e) ENFORCEMENT.— 

15 ‘‘(1) IN GENERAL.—The Secretary, in consulta16 tion with the Secretary of Labor and the Secretary 

17 of Health and Human Services, shall enforce this 

18 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 or entity providing pharmacy benefit management 

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


pbinns on DSKJLVW7X2PROD with $$_JOB
82 

•S 1339 RS

1 administrator of a group health plan or an entity 

2 providing pharmacy benefit management services 

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

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

5 day during which such violation continues or such 

6 information is not disclosed or reported. 

7 ‘‘(3) FALSE INFORMATION.—An entity pro8 viding pharmacy benefit management services, or 

9 drug manufacturer that knowingly provides false in10 formation under this section shall be subject to a 

11 civil money penalty in an amount not to exceed 

12 $100,000 for each item of false information. Such 

13 civil money penalty shall be in addition to other pen14 alties as may be prescribed by law. 

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

16 1128A of the Social Security Act, other than sub17 sections (a) and (b) and the first sentence of sub18 section (c)(1) of such section shall apply to civil 

19 monetary penalties under this subsection in the 

20 same manner as such provisions apply to a penalty 

21 or proceeding under section 1128A of the Social Se22 curity Act. 

23 ‘‘(5) WAIVERS.—The Secretary may waive pen24 alties under paragraph (2), or extend the period of 

25 time for compliance with a requirement of this secVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00082 Fmt 6652 Sfmt 6401 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
83 

•S 1339 RS

1 tion, for an entity in violation of this section that 

2 has made a good-faith effort to comply with this sec3 tion. 

4 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec5 tion shall be construed to permit a group health plan or 

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

7 access of, the Department of the Treasury to a report de8 scribed in subsection (b)(1) or information related to com9 pliance with subsection (a) by such plan or entity. 

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

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

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

13 wholesaler, rebate aggregator (or other pur14 chasing entity designed to aggregate rebates), 

15 group purchasing organization, or associated 

16 third party; 

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

18 subcontractor of a group health plan, health in19 surance issuer, entity that provides pharmacy 

20 benefit management services on behalf of such 

21 a plan or issuer, or any entity described in sub22 paragraph (A); or 

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

24 the Secretary of Health and Human Services, 


pbinns on DSKJLVW7X2PROD with $$_JOB
84 

•S 1339 RS

1 and the Secretary of Labor may specify through 

2 rulemaking; 

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

4 coverage’ means health insurance coverage offered in 

5 connection with a group health plan maintained by 

6 a large employer; 

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

8 means a group health plan maintained by a large 

9 employer; 

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

11 prescription drug benefits under a group health plan 

12 or health insurance coverage, means the amount 

13 spent by a group health plan or health insurance 

14 issuer on prescription drug benefits, calculated be15 fore the application of manufacturer rebates, fees, 

16 alternative discounts, or other remuneration; 

17 ‘‘(5) the term ‘large 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 50 employees on busi21 ness days during the preceding calendar year and 

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

23 the plan year; 

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

25 prescription drug benefits under a group health plan 


pbinns on DSKJLVW7X2PROD with $$_JOB
85 

•S 1339 RS

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 after 

4 the application of manufacturer rebates, fees, alter5 native discounts, or other remuneration; 

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

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

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

9 1002(16)(B)); 

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

11 given such term by the Secretary, the Secretary of 

12 Labor, and the Secretary of Health and Human 

13 Services, through notice and comment rulemaking; 

14 ‘‘(9) the term ‘small employer’ means, in con15 nection with a group health plan with respect to a 

16 calendar year and a plan year, an employer who em17 ployed an average of at least 1 but not more than 

18 49 employees on business days during the preceding 

19 calendar year and who employs at least 1 employee 

20 on the first day of the plan year; and 

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

22 the meaning given such term in section 

23 1847A(c)(6)(B) of the Social Security Act (42 

24 U.S.C. 1395w–3a(c)(6)(B)).’’. 


pbinns on DSKJLVW7X2PROD with $$_JOB
86 

•S 1339 RS

1 (2) CLERICAL AMENDMENT.—The table of sec2 tions for subchapter B of chapter 100 of the Inter3 nal Revenue Code of 1986 is amended by adding at 

4 the end the following new item: 

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

services.’’. 

5 (d) FUNDING.— 

6 (1) For purposes of carrying out the amend7 ments made by subsection (a), there are appro8 priated to the Centers for Medicare & Medicaid 

9 Services, out of amounts in the Treasury not other10 wise appropriated, $80,000,000 for fiscal year 2024. 

11 (2) For purposes of carrying out the amend12 ments made by subsection (b), there are appro13 priated to the Department of Labor, out of amounts 

14 in the Treasury not otherwise appropriated, 

15 $43,750,000 for fiscal year 2024. 

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

17 Planning and Evaluation of the Department of Health and 

18 Human Services shall conduct or commission a study on 

19 how the United States health care market would be im20 pacted by potential regulatory changes disallowing manu21 facturer rebates in the manner and to the extent allowed 

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

23 impact to stakeholders in the commercial insurance mar24 ket, and, not later than 1 year after the date of enactment 


pbinns on DSKJLVW7X2PROD with $$_JOB
87 

•S 1339 RS

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

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

3 following: 

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

5 such regulatory changes, as well as potential behav6 ioral changes by plan sponsors, members, and phar7 maceutical manufacturers, such as tighter 

8 formularies, changes to price concessions, changes in 

9 utilization, if such regulatory changes are made. 

10 (2) The mechanics needed in the pharma11 ceutical supply chain (whether existing or not) to 

12 move a manufacturer rebate to the point of sale. 

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

14 manufacturer rebate versus a full point-of-sale man15 ufacturer rebate. 

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

17 premiums, and other cost-sharing. 

18 (5) Possible behavioral changes by other third 

19 parties in the pharmaceutical supply chain including 

20 drug manufacturer, distributor, wholesaler, rebate 

21 aggregators, pharmacy services administrative orga22 nizations, or group purchasing organizations. 

23 (6) Behavioral changes between entities that 

24 contract with pharmaceutical manufacturers and 

25 pharmaceutical supply chain. 


pbinns on DSKJLVW7X2PROD with $$_JOB
88 

•S 1339 RS

1 (7) Alternative price negotiation mechanisms, 

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

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

4 49 Stat. 1526, chapter 592; 15 U.S.C. 13a et seq.), 

5 and the amendments made by that Act, on drug 

6 pricing negotiations. 

7 (8) The impact on pharmacies, including phar8 macy rebates, pharmacy fees, and dispensing chan9 nels. 

10 (f) GAO STUDY.— 

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

12 2029, the Comptroller General of the United States 

13 shall report to Congress on— 

14 (A) pharmacy networks of group health 

15 plans, health insurance issuers, and entities 

16 providing pharmacy benefit management serv17 ices under such group health plan or group or 

18 individual health insurance coverage, including 

19 networks that have pharmacies that are under 

20 common ownership (in whole or part) with 

21 group health plans, health insurance issuers, or 

22 entities providing pharmacy benefit manage23 ment services or pharmacy benefit administra24 tive services under group health plan or group 

25 or individual health insurance coverage; 


pbinns on DSKJLVW7X2PROD with $$_JOB
89 

•S 1339 RS

1 (B) as it relates to pharmacy networks 

2 that include pharmacies under common owner3 ship described in subparagraph (A)— 

4 (i) whether such networks are de5 signed to encourage participants and bene6 ficiaries of a plan or coverage to use such 

7 pharmacies over other network pharmacies 

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

9 reasons the networks give for encouraging 

10 use of such pharmacies; and 

11 (ii) whether such pharmacies are used 

12 by participants and beneficiaries dispropor13 tionately more in the aggregate or for spe14 cific services or drugs compared to other 

15 network pharmacies; 

16 (C) whether group health plans and health 

17 insurance issuers offering group or individual 

18 health insurance coverage have options to elect 

19 different network pricing arrangements in the 

20 marketplace with entities that provide phar21 macy benefit management services, the preva22 lence of electing such different network pricing 

23 arrangements; 

24 (D) pharmacy network design parameters 

25 that encourage participants and beneficiaries in 


pbinns on DSKJLVW7X2PROD with $$_JOB
90 

•S 1339 RS

1 the plan or coverage to fill prescriptions at mail 

2 order, specialty, or retail pharmacies that are 

3 wholly or partially-owned by that issuer or enti4 ty; and 

5 (E) the degree to which mail order, spe6 cialty, or retail pharmacies that dispense pre7 scription drugs to participants and beneficiaries 

8 in a group health plan or health insurance cov9 erage that are under common ownership (in 

10 whole or part) with group health plans, health 

11 insurance issuers, or entities providing phar12 macy benefit management services or pharmacy 

13 benefit administrative services under group 

14 health plan or group or individual health insur15 ance coverage receive reimbursement that is 

16 greater than the median price charged to the 

17 group health plan or health insurance issuer 

18 when the same drug is dispensed to participants 

19 and beneficiaries in the plan or coverage by 

20 other pharmacies included in the pharmacy net21 work of that plan, issuer, or entity that are not 

22 wholly or partially owned by the health insur23 ance issuer or entity providing pharmacy ben24 efit management services. 


pbinns on DSKJLVW7X2PROD with $$_JOB
91 

•S 1339 RS

1 (2) REQUIREMENT.—In carrying out paragraph 

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

3 shall not disclose— 

4 (A) information that would allow for iden5 tification of a specific individual, plan sponsor, 

6 health insurance issuer, plan, or entity pro7 viding pharmacy benefit management services; 

8 or 

9 (B) commercial or financial information 

10 that is privileged or confidential. 

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

12 terms ‘‘group health plan’’, ‘‘health insurance cov13 erage’’, and ‘‘health insurance issuer’’ have the 

14 meanings given such terms in section 2791 of the 

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

16 SECTION 1. SHORT TITLE. 

17 This Act may be cited as the ‘‘Pharmacy Benefit Man18 ager Reform Act’’. 

19 SEC. 2. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR20 MACY BENEFIT MANAGEMENT SERVICES. 

21 (a) PUBLIC HEALTH SERVICE ACT.—Title XXVII of 

22 the Public Health Service Act (42 U.S.C. 300gg et seq.) is 

23 amended— 

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

25 adding at the end the following new section: 


pbinns on DSKJLVW7X2PROD with $$_JOB
92 

•S 1339 RS

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

2 PHARMACY BENEFIT MANAGEMENT SERV3 ICES. 

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

5 after the date that is 30 months after the date of enactment 

6 of the Pharmacy Benefit Manager Reform Act, a group 

7 health plan or health insurance issuer offering group health 

8 insurance coverage or an entity providing pharmacy benefit 

9 management services on behalf of such a plan or issuer shall 

10 not enter into a contract with an applicable entity unless 

11 such applicable entity agrees to— 

12 ‘‘(1) not limit the disclosure of information to 

13 plan sponsors in such a manner that prevents the 

14 plan or issuer, or an entity providing pharmacy ben15 efit management services on behalf of a plan or 

16 issuer, from making the reports described in sub17 section (b); and 

18 ‘‘(2) provide the group health plan or health in19 surance issuer offering group health insurance cov20 erage, or an entity providing pharmacy benefit man21 agement services on behalf of a plan or issuer, rel22 evant information necessary to make the reports de23 scribed in subsection (b). 

24 ‘‘(b) REPORTS.— 

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

26 or after the date that is 30 months after the date of 


pbinns on DSKJLVW7X2PROD with $$_JOB
93 

•S 1339 RS

1 enactment of the Pharmacy Benefit Manager Reform 

2 Act, not less frequently than annually, an entity pro3 viding pharmacy benefit management services on be4 half of a covered group health plan or group health 

5 insurance coverage (regardless of whether such cov6 erage is covered group health insurance coverage as 

7 defined in subsection (g)(3)) shall submit to the plan 

8 sponsor of such covered group health plan or issuer of 

9 such health insurance coverage a report in accordance 

10 with this subsection and make such report available 

11 to the plan sponsor or issuer in plain language, in 

12 a machine-readable format, and, as the Secretary, the 

13 Secretary of Labor, and the Secretary of the Treasury 

14 may determine, other formats. Each such report shall 

15 include, with respect to the covered group health plan 

16 or health insurance coverage— 

17 ‘‘(A) as applicable, information collected 

18 from drug manufacturers by such entity on the 

19 total amount of copayment assistance dollars 

20 paid, or copayment cards applied, that were 

21 funded by such drug manufacturers with respect 

22 to the participants and beneficiaries in such 

23 plan or coverage; 

24 ‘‘(B) a list of each drug covered by the plan, 

25 coverage, or entity providing pharmacy benefit 


pbinns on DSKJLVW7X2PROD with $$_JOB
94 

•S 1339 RS

1 management services for which a claim was filed 

2 during the reporting period, including, with re3 spect to each such drug during the reporting pe4 riod— 

5 ‘‘(i) the brand name, generic or non6 proprietary name, and National Drug Code; 

7 ‘‘(ii) the number of participants and 

8 beneficiaries for whom a claim for the drug 

9 was filed during the reporting period, the 

10 total number of prescription claims for the 

11 drug (including original prescriptions and 

12 refills), and the total number of dosage 

13 units of the drug for which a claim was 

14 filed across the reporting period; 

15 ‘‘(iii) for each claim or dosage unit de16 scribed in clause (ii), the type of dispensing 

17 channel used, such as retail, mail order, or 

18 specialty pharmacy; 

19 ‘‘(iv) the wholesale acquisition cost, 

20 listed as cost per days’ supply and cost per 

21 dosage unit; 

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

23 participants and beneficiaries on such drug 

24 after application of any benefits under the 

25 plan or coverage— 


pbinns on DSKJLVW7X2PROD with $$_JOB
95 

•S 1339 RS

1 ‘‘(I) including copayments, coin2 surance, and deductibles; and 

3 ‘‘(II) not including any amounts 

4 spent by participants and beneficiaries 

5 on drugs not covered under the plan or 

6 coverage or for which no claim is sub7 mitted to the plan or coverage; and 

8 ‘‘(vi) for each of the 50 prescription 

9 drugs with the highest gross spending under 

10 the group health plan or health insurance 

11 coverage during the reporting period— 

12 ‘‘(I) a list of all other drugs in the 

13 same therapeutic class (as defined by 

14 the Secretary, the Secretary of Labor, 

15 and the Secretary of the Treasury), in16 cluding brand name drugs and biologi17 cal products and generic drugs or bio18 similar biological products that are in 

19 the same therapeutic class as such 

20 drug; 

21 ‘‘(II) if applicable, the rationale 

22 for preferred formulary placement of 

23 such drug in that therapeutic class, se24 lected from a list of standard ration25 ales established by the Secretary, the 


pbinns on DSKJLVW7X2PROD with $$_JOB
96 

•S 1339 RS

1 Secretary of Labor, and the Secretary 

2 of the Treasury, in consultation with 

3 stakeholders; and 

4 ‘‘(III) any change in formulary 

5 placement compared to the prior plan 

6 year; 

7 ‘‘(C) a list of each therapeutic class of drugs 

8 for which a claim was filed under the group 

9 health plan or health insurance coverage during 

10 the reporting period, and, with respect to each 

11 such therapeutic class (as defined as described in 

12 subparagraph (B)(vi)(I)) of drugs, during the re13 porting period— 

14 ‘‘(i) total gross spending by the plan or 

15 by the issuer offering such coverage; 

16 ‘‘(ii) the number of participants and 

17 beneficiaries who filled a prescription for a 

18 drug in that class; 

19 ‘‘(iii) if applicable to that class, a de20 scription of the formulary tiers and utiliza21 tion management mechanisms (such as 

22 prior authorization or step therapy) em23 ployed for drugs in that class; 

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

25 by participants and beneficiaries on drugs 


pbinns on DSKJLVW7X2PROD with $$_JOB
97 

•S 1339 RS

1 in such therapeutic class, after application 

2 of any benefits under the plan or coverage— 

3 ‘‘(I) including copayments, coin4 surance, and deductibles; and 

5 ‘‘(II) not including any amounts 

6 spent by participants and beneficiaries 

7 on drugs not covered under the plan or 

8 coverage or for which no claim is sub9 mitted to the plan or issuer; and 

10 ‘‘(v) for each therapeutic class under 

11 which 3 or more drugs are included on the 

12 formulary of such plan or coverage— 

13 ‘‘(I) the amount received, or ex14 pected to be received, by such entity, 

15 from applicable entities, in rebates, 

16 fees, alternative discounts, or other re17 muneration— 

18 ‘‘(aa) for claims incurred 

19 during the reporting period; or 

20 ‘‘(bb) that is related to utili21 zation of drugs or drug spending; 

22 ‘‘(II) the total net spending by the 

23 plan or by the issuer with respect to 

24 such coverage on that class of drugs; 

25 and 


pbinns on DSKJLVW7X2PROD with $$_JOB
98 

•S 1339 RS

1 ‘‘(III) the average net spending 

2 per 30-day supply and per 90-day 

3 supply by the plan or by the issuer 

4 with respect to such coverage and its 

5 participants and beneficiaries, among 

6 all drugs within the therapeutic class 

7 for which a claim was filed during the 

8 reporting period; 

9 ‘‘(D) total gross spending on prescription 

10 drugs by the plan or by the issuer with respect 

11 to such coverage during the reporting period; 

12 ‘‘(E) the total amount received, or expected 

13 to be received, by the group health plan or health 

14 insurance issuer, from applicable entities, in re15 bates, fees, alternative discounts, and other remu16 neration received from such entities, related to 

17 utilization of drugs or drug spending under that 

18 group health plan or health insurance coverage 

19 during the reporting period; 

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

21 drugs by the group health plan or health insur22 ance issuer with respect to the coverage during 

23 the reporting period; 

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

25 rebates, fees, or any other type of compensation 


pbinns on DSKJLVW7X2PROD with $$_JOB
99 

•S 1339 RS

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

2 of the Employee Retirement Income Security Act 

3 of 1974) to brokers, consultants, advisors, or any 

4 other individual or firm for— 

5 ‘‘(i) referral of the group health plan’s 

6 or health insurance issuer’s business to the 

7 pharmacy benefit manager; 

8 ‘‘(ii) consideration of the entity pro9 viding pharmacy benefit management serv10 ices by the group health plan or health in11 surance issuer; or 

12 ‘‘(iii) the retention of the entity by the 

13 group health plan or health insurance 

14 issuer; 

15 ‘‘(H)(i) an explanation of any benefit de16 sign parameters that encourage or require par17 ticipants and beneficiaries in the plan or cov18 erage to fill prescriptions at mail order, spe19 cialty, or retail pharmacies that are affiliated 

20 with or under common ownership with the entity 

21 providing pharmacy benefit management services 

22 on behalf of such plan or coverage, including 

23 mandatory mail and specialty home delivery 

24 programs, retail and mail auto-refill programs, 

25 and cost-sharing assistance incentives funded by 


pbinns on DSKJLVW7X2PROD with $$_JOB
100 

•S 1339 RS

1 an entity providing pharmacy benefit manage2 ment services; 

3 ‘‘(ii) the percentage of total prescriptions 

4 charged to the plan, issuer, or participants and 

5 beneficiaries in the plan or coverage, that were 

6 dispensed by mail order, specialty, or retail 

7 pharmacies that are affiliated with or under 

8 common ownership with the entity providing 

9 pharmacy benefit management services; and 

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

11 affiliated pharmacy or pharmacy under common 

12 ownership and charged to the plan, issuer, or 

13 participants and beneficiaries of the plan or cov14 erage, during the applicable period, and, with 

15 respect to each drug— 

16 ‘‘(I)(aa) the amount charged, per dos17 age unit, per 30-day supply, and per 90- 

18 day supply, with respect to participants 

19 and beneficiaries in the plan or coverage, to 

20 the plan or issuer; and 

21 ‘‘(bb) the amount charged, per dosage 

22 unit, per 30-day supply, and per 90-day 

23 supply to participants and beneficiaries; 

24 ‘‘(II) the median amount charged to 

25 the plan or issuer, per dosage unit, per 30- 


pbinns on DSKJLVW7X2PROD with $$_JOB
101 

•S 1339 RS

1 day supply, and per 90-day supply, includ2 ing amounts paid by the participants and 

3 beneficiaries, when the same drug is dis4 pensed by other pharmacies that are not af5 filiated with or under common ownership 

6 with the entity and that are included in the 

7 pharmacy network of that plan or coverage; 

8 ‘‘(III) the interquartile range of the 

9 costs, per dosage unit, per 30-day supply, 

10 and per 90-day supply, including amounts 

11 paid by the participants and beneficiaries, 

12 when the same drug is dispensed by other 

13 pharmacies that are not affiliated with or 

14 under common ownership with the entity 

15 and that are included in the pharmacy net16 work of that plan or coverage; 

17 ‘‘(IV) the lowest cost, per dosage unit, 

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

19 for such drug, including amounts charged to 

20 the plan and participants and beneficiaries, 

21 that is available from any pharmacy in22 cluded in the network of the plan or cov23 erage; 

24 ‘‘(V) the net acquisition cost per dosage 

25 unit, per 30-day supply, and per 90-day 


pbinns on DSKJLVW7X2PROD with $$_JOB
102 

•S 1339 RS

1 supply, if the drug is subject to a maximum 

2 price discount; and 

3 ‘‘(VI) other information with respect to 

4 the cost of the drug, as determined by the 

5 Secretary, the Secretary of Labor, and the 

6 Secretary of the Treasury, such as average 

7 sales price, wholesale acquisition cost, and 

8 national average drug acquisition cost per 

9 dosage unit or per 30-day supply, for such 

10 drug, including amounts charged to the 

11 plan or issuer and participants and bene12 ficiaries among all pharmacies included in 

13 the network of the plan or coverage; 

14 ‘‘(I) a summary document for plan sponsors 

15 or issuers that includes the information described 

16 in subparagraphs (A) through (H) that the Sec17 retary, the Secretary of Labor, and the Secretary 

18 of the Treasury determine useful to plan spon19 sors and health insurance issuers for purposes of 

20 selecting pharmacy benefit management services, 

21 such as an estimated net price to plan sponsor 

22 and participant or beneficiary, a cost per claim, 

23 the fee structure or reimbursement model, and es24 timated cost per participant or beneficiary; and 


pbinns on DSKJLVW7X2PROD with $$_JOB
103 

•S 1339 RS

1 ‘‘(J) a summary document for participants 

2 or beneficiaries, which shall be made available to 

3 participants or beneficiaries upon request to the 

4 plan sponsor, that contains the information de5 scribed in subparagraphs (D) through (G) that 

6 the Secretary, the Secretary of Labor, and the 

7 Secretary of the Treasury determine useful to 

8 participants or beneficiaries in better under9 standing their plan or benefits, except that such 

10 summary document for participants or bene11 ficiaries shall contain only aggregate informa12 tion. 

13 ‘‘(2) REGULATIONS.—Not later than 2 years 

14 after the date of enactment of the Pharmacy Benefit 

15 Manager Reform Act, the Secretary, the Secretary of 

16 Labor, and the Secretary of the Treasury shall, 

17 through notice and comment rulemaking, promulgate 

18 final regulations to implement the requirements of 

19 this subsection. In promulgating such regulations, the 

20 Secretary, the Secretary of Labor, and the Secretary 

21 of the Treasury shall, to the extent practicable, align 

22 the reporting requirements under this subsection with 

23 the reporting requirements under section 2799A–10. 

24 ‘‘(3) ADDITIONAL REPORTING.— 


pbinns on DSKJLVW7X2PROD with $$_JOB
104 

•S 1339 RS

1 ‘‘(A) REPORTING WITH RESPECT TO GROUP

2 HEALTH PLANS OFFERED BY SMALL EMPLOY3 ERS.—For plan years beginning on or after the 

4 date that is 30 months after the date of enact5 ment of the Pharmacy Benefit Manager Reform 

6 Act, not less frequently than annually, an entity 

7 providing pharmacy benefit management services 

8 on behalf of a group health plan that is not a 

9 covered group health plan shall submit to the 

10 plan sponsor of such group health plan a report 

11 in accordance with this paragraph, and make 

12 such report available to the plan sponsor in a 

13 machine-readable format, and such other formats 

14 as the Secretary, the Secretary of Labor, and the 

15 Secretary of the Treasury may specify. Each 

16 such report shall include, with respect to the ap17 plicable group health plan— 

18 ‘‘(i) the information described in sub19 paragraphs (D), (E), (F), and (G) of para20 graph (1); 

21 ‘‘(ii) as applicable, information col22 lected from drug manufacturers by such 

23 plan on the total amount of copayment as24 sistance dollars paid, or copayment cards 

25 applied, that were funded by applicable 


pbinns on DSKJLVW7X2PROD with $$_JOB
105 

•S 1339 RS

1 drug manufacturers with respect to the par2 ticipants and beneficiaries in such plan, ex3 cept that such information shall not iden4 tify any drug manufacturer; and 

5 ‘‘(iii) a summary document that in6 cludes the information described in clauses 

7 (i) and (ii) that the Secretary, the Sec8 retary of Labor, and the Secretary of the 

9 Treasury determine useful for plan sponsors 

10 for purposes of selecting pharmacy benefit 

11 management services, provided that such 

12 summary documents include only aggregate 

13 information. 

14 ‘‘(B) OPT-IN FOR GROUP HEALTH INSUR15 ANCE COVERAGE.— 

16 ‘‘(i) IN GENERAL.—A plan sponsor of 

17 group health insurance coverage offered in 

18 connection with a group health plan may, 

19 on an annual basis, for plan years begin20 ning on or after the date that is 30 months 

21 after the date of enactment of the Pharmacy 

22 Benefit Manager Reform Act, elect to re23 quire an entity providing pharmacy benefit 

24 management services on behalf of a health 

25 insurance issuer offering group health inVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00105 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
106 

•S 1339 RS

1 surance coverage to submit to such plan 

2 sponsor a report in accordance with this 

3 subsection. 

4 ‘‘(ii) CONTENTS OF REPORTS.— 

5 ‘‘(I) COVERED GROUP HEALTH IN6 SURANCE COVERAGE.—In the case of 

7 an entity providing pharmacy benefit 

8 management services on behalf of an 

9 issuer that offers covered group health 

10 insurance coverage, a report provided 

11 pursuant to clause (i) shall include, 

12 with respect to the applicable covered 

13 group health insurance coverage, the 

14 information required under paragraph 

15 (1) for covered group health plans. 

16 ‘‘(II) OTHER GROUP HEALTH IN17 SURANCE COVERAGE.—In the case of 

18 an entity providing pharmacy benefit 

19 management services on behalf of an 

20 issuer that offers group health insur21 ance coverage that is not covered group 

22 health insurance, a report provided 

23 pursuant to clause (i) shall include, 

24 with respect to the applicable group 

25 health insurance coverage— 


pbinns on DSKJLVW7X2PROD with $$_JOB
107 

•S 1339 RS

1 ‘‘(aa) the information de2 scribed in subparagraphs (D), 

3 (E), (F), and (G) of paragraph 

4 (1); and 

5 ‘‘(bb) as applicable, informa6 tion collected from drug manufac7 turers by such issuer or entity on 

8 the total amount of copayment as9 sistance dollars paid, or copay10 ment cards applied, that were 

11 funded by applicable drug manu12 facturers with respect to the par13 ticipants and beneficiaries in such 

14 plan, except that such information 

15 shall not identify any drug manu16 facturer. 

17 ‘‘(iii) REQUIRED REPORTING FOR COV18 ERED GROUP HEALTH INSURANCE COV19 ERAGE.—Each health insurance issuer that 

20 offers covered group health insurance cov21 erage shall annually submit to the plan 

22 sponsor the information described in para23 graph (1)(I), regardless of whether the plan 

24 sponsor made the election described in 

25 clause (i) for the applicable year. 


pbinns on DSKJLVW7X2PROD with $$_JOB
108 

•S 1339 RS

1 ‘‘(iv) REQUIRED REPORTING FOR

2 OTHER GROUP HEALTH INSURANCE COV3 ERAGE.—Each health insurance issuer that 

4 offers group health insurance coverage that 

5 is not covered group health insurance shall 

6 annually submit a summary document that 

7 includes such information described in 

8 items (aa) and (bb) of clause (ii)(II) as the 

9 Secretary and the Secretary of Labor deter10 mine useful for plan sponsors for purposes 

11 of selecting pharmacy benefit management 

12 services, provided that such summary docu13 ments include only aggregate information. 

14 ‘‘(4) PRIVACY REQUIREMENTS.— 

15 ‘‘(A) RELATIONSHIP TO HIPAA REGULA16 TIONS.—Nothing in this section shall be con17 strued to modify the requirements for the cre18 ation, receipt, maintenance, or transmission of 

19 protected health information under the HIPAA 

20 privacy regulations, as defined in section 

21 1180(b)(3) of the Social Security Act. 

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

23 under paragraph (1) or (3) shall contain only 

24 summary health information, as defined in secVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00108 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
109 

•S 1339 RS

1 tion 164.504(a) of title 45, Code of Federal Regu2 lations (or successor regulations). 

3 ‘‘(C) CLARIFICATION REGARDING CERTAIN

4 DISCLOSURES OF INFORMATION.— 

5 ‘‘(i) REASONABLE RESTRICTIONS.— 

6 Nothing in this section prevents a health in7 surance issuer offering group health insur8 ance coverage or an entity providing phar9 macy benefit management services on behalf 

10 of a group health plan or health insurance 

11 issuer offering group health insurance cov12 erage from placing reasonable restrictions 

13 (as the Secretary, the Secretary of Labor, 

14 and the Secretary of the Treasury may de15 termine) on the public disclosure of the in16 formation contained in a report under 

17 paragraph (1) or (3). 

18 ‘‘(ii) LIMITATIONS.—A health insur19 ance issuer offering group health insurance 

20 coverage or an entity providing pharmacy 

21 benefit management services on behalf of a 

22 group health plan or health insurance issuer 

23 offering group health insurance coverage 

24 may not restrict disclosure of such reports 

25 to the Department of Health and Human 


pbinns on DSKJLVW7X2PROD with $$_JOB
110 

•S 1339 RS

1 Services, the Department of Labor, the De2 partment of the Treasury, or any other Fed3 eral agency responsible for enforcement ac4 tivities under this section for purposes of 

5 enforcement under this section or other ap6 plicable law, or to the Comptroller General 

7 of the United States in accordance with 

8 paragraph (6). 

9 ‘‘(5) USE AND DISCLOSURE BY PLAN SPON10 SORS.— 

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

12 not— 

13 ‘‘(i) fail or refuse to hire, or discharge, 

14 any employee, or otherwise discriminate 

15 against any employee with respect to the 

16 compensation, terms, conditions, or privi17 leges of employment of the employee, because 

18 of information submitted under paragraph 

19 (1) or (3) attributed to the employee or a 

20 dependent of the employee; or 

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

22 employees of the employer in any way that 

23 would deprive or tend to deprive any em24 ployee of employment opportunities or oth25 erwise adversely affect the status of the emVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00110 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
111 

•S 1339 RS

1 ployee as an employee, because of informa2 tion submitted under paragraph (1) or (3) 

3 attributed to the employee or a dependent of 

4 the employee. 

5 ‘‘(B) DISCLOSURE AND REDISCLOSURE.—A 

6 plan sponsor shall not disclose the information 

7 received under paragraph (1) or (3) except— 

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

9 researcher if the research is conducted in 

10 compliance with the regulations and protec11 tions provided for under part 46 of title 45, 

12 Code of Federal Regulations (or successor 

13 regulations); 

14 ‘‘(ii) in response to an order of a court, 

15 except that the plan sponsor may disclose 

16 only the information expressly authorized 

17 by such order; 

18 ‘‘(iii) to the Department of Health and 

19 Human Services, the Department of Labor, 

20 the Department of the Treasury, or other 

21 Federal agency responsible for enforcement 

22 activities under this section; or 

23 ‘‘(iv) to a contractor or agent for pur24 poses of health plan administration, if such 

25 contractor or agent agrees, in writing, and 


pbinns on DSKJLVW7X2PROD with $$_JOB
112 

•S 1339 RS

1 as a term of the contract, to abide by the 

2 same use and disclosure restrictions as the 

3 plan sponsor. 

4 ‘‘(C) RELATIONSHIP TO HIPAA REGULA5 TIONS.—With respect to the HIPAA privacy reg6 ulations, as defined in section 1180(b)(3) of the 

7 Social Security Act, subparagraph (B) does not 

8 prohibit a covered entity (as defined for purposes 

9 of such regulations promulgated under section 

10 264 of the Health Insurance Portability and Ac11 countability Act of 1996) from any use or disclo12 sure of health information that is authorized for 

13 the covered entity under such regulations. The 

14 previous sentence does not affect the authority of 

15 such Secretary to modify such regulations. 

16 ‘‘(D) WRITTEN NOTICE.—Plan sponsors of 

17 group health plans and group health insurance 

18 coverage shall provide to each employee written 

19 notice informing the employee of the requirement 

20 for health insurance issuers or entities providing 

21 pharmacy benefit management services on behalf 

22 of the plan or coverage to submit reports to plan 

23 sponsors under paragraphs (1) and (3), as appli24 cable, which may include incorporating such no25 tification in plan documents provided to the emVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00112 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
113 

•S 1339 RS

1 ployee, an employee handbook provided to the 

2 employee, or individual notification. 

3 ‘‘(E) ENFORCEMENT.— 

4 ‘‘(i) IN GENERAL.—The powers, proce5 dures, and remedies provided in section 207 

6 of the Genetic Information Nondiscrimina7 tion Act to a person alleging a violation of 

8 title II of such Act shall be the powers, pro9 cedures, and remedies this subparagraph 

10 provides for any person alleging a violation 

11 of this paragraph. 

12 ‘‘(ii) PROHIBITION AGAINST RETALIA13 TION.—No person shall discriminate 

14 against any individual because such indi15 vidual has opposed any act or practice 

16 made unlawful by this paragraph or be17 cause such individual made a charge, testi18 fied, assisted, or participated in any man19 ner in an investigation, proceeding, or hear20 ing under this paragraph. The remedies and 

21 procedures otherwise provided for under this 

22 subparagraph shall be available to aggrieved 

23 individuals with respect to violations of this 

24 clause. 


pbinns on DSKJLVW7X2PROD with $$_JOB
114 

•S 1339 RS

1 ‘‘(6) SUBMISSIONS TO GAO.—A health insurance 

2 issuer offering group health insurance coverage or an 

3 entity providing pharmacy benefit management serv4 ices on behalf of a group health plan shall submit, 

5 upon request, to the Comptroller General of the 

6 United States each of the first 2 reports submitted to 

7 a plan sponsor under paragraph (1) or (3) with re8 spect to such coverage or plan, and other such reports 

9 as requested, in accordance with the privacy require10 ments under paragraph (4), and such other informa11 tion that the Comptroller General determines nec12 essary to carry out the study under section 2(f) of the 

13 Pharmacy Benefit Manager Reform Act. 

14 ‘‘(7) STANDARD FORMATS.— 

15 ‘‘(A) IN GENERAL.—Not later than June 1, 

16 2024, the Secretary, the Secretary of Labor, and 

17 the Secretary of the Treasury shall specify, 

18 through rulemaking, standard formats for enti19 ties providing pharmacy benefit management 

20 services to submit reports required under this 

21 subsection. Such secretaries may provide for sep22 arate standard formats for reports to plan spon23 sors of group health plans and reports to plan 

24 sponsors of group health insurance coverage of25 fered in connection with a group health plan. 


pbinns on DSKJLVW7X2PROD with $$_JOB
115 

•S 1339 RS

1 ‘‘(B) FORM OF REPORT.—The Secretary, the 

2 Secretary of Labor, and the Secretary of the 

3 Treasury shall define through rulemaking a form 

4 of the reports under paragraphs (1) and (3) re5 quired to be submitted to plan sponsors who also 

6 are drug manufacturers, drug wholesalers, enti7 ties providing pharmacy benefit management 

8 services, or other direct participants in the drug 

9 supply chain, in the case that such secretaries 

10 determine that changes to the standard format 

11 are necessary to prevent anticompetitive behav12 ior. 

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

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

15 or after the date that is 30 months after the date of 

16 enactment of the Pharmacy Benefit Manager Reform 

17 Act, a group health plan or health insurance issuer 

18 offering group or individual health insurance cov19 erage shall ensure that the amount required to be 

20 paid by a participant, beneficiary, or enrollee for a 

21 prescription drug covered under the plan or coverage, 

22 and a third-party administrator or an entity pro23 viding pharmacy benefit management services on be24 half of such a plan or coverage shall ensure that the 

25 total amount required to be paid by the plan or issuer 


pbinns on DSKJLVW7X2PROD with $$_JOB
116 

•S 1339 RS

1 and participant, beneficiary, or enrollee for a pre2 scription drug covered under the plan or coverage, 

3 does not exceed the price paid to the pharmacy, ex4 cluding penalties paid by the pharmacy (as described 

5 in paragraph (2)) to such plan, issuer, or entity. 

6 ‘‘(2) RULE OF CONSTRUCTION.—For purposes of 

7 paragraph (1), penalties paid by pharmacies include 

8 only the following: 

9 ‘‘(A) A penalty paid if an original claim 

10 for a prescription drug was submitted fraudu11 lently by the pharmacy to the plan, issuer, or en12 tity. 

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

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

15 the pharmacy was inconsistent with the reim16 bursement terms in any contract between the 

17 pharmacy and the plan, issuer, or entity. 

18 ‘‘(C) A penalty paid if the pharmacist serv19 ices for which a claim was filed with the plan, 

20 issuer, or entity were not rendered by the phar21 macy. 

22 ‘‘(d) FULL REBATE PASS-THROUGH TO PLAN OR

23 HEALTH INSURANCE ISSUER.— 

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

25 or after the date that is 30 months after the date of 


pbinns on DSKJLVW7X2PROD with $$_JOB
117 

•S 1339 RS

1 enactment of the Pharmacy Benefit Manager Reform 

2 Act, a third-party administrator of a group health 

3 plan or an entity providing pharmacy benefit man4 agement services on behalf of a group health plan or 

5 health insurance issuer offering group health insur6 ance coverage shall— 

7 ‘‘(A) remit 100 percent of rebates, fees, al8 ternative discounts, and other remuneration re9 ceived from any applicable entity that are re10 lated to utilization of drugs under such group 

11 health plan or health insurance coverage, to the 

12 group health plan or health insurance issuer of13 fering group health insurance coverage; and 

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

15 by such third-party administrator or entity pro16 viding pharmacy benefit management services on 

17 behalf of such a plan or coverage, with rebate 

18 aggregators (or other purchasing entity designed 

19 to aggregate rebates), applicable group pur20 chasing organizations, or any subsidiary, par21 ent, affiliate, or subcontractor of the plan, entity, 

22 rebate aggregator (or other purchasing entity de23 signed to aggregate rebates), or applicable group 

24 purchasing organization remit 100 percent of re25 bates, fees, alternative discounts, and other remuVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00117 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
118 

•S 1339 RS

1 neration received that are related to utilization 

2 of drugs under such group health plan or health 

3 insurance coverage, to the third-party adminis4 trator or entity providing pharmacy benefit 

5 management services. 

6 ‘‘(2) FORM AND MANNER OF REMITTANCE.—With 

7 respect to such rebates, fees, alternative discounts, and 

8 other remuneration— 

9 ‘‘(A) the rebates, fees, alternative discounts, 

10 and other remuneration under paragraph (1)(A) 

11 shall be— 

12 ‘‘(i) remitted— 

13 ‘‘(I) on a quarterly basis, to the 

14 group health plan or the group health 

15 insurance issuer, not later than 90 

16 days after the end of each quarter; or 

17 ‘‘(II) in the case of an under18 payment in a remittance for a prior 

19 quarter, as soon as practicable, but not 

20 later than 90 days after notice of the 

21 underpayment is first given; 

22 ‘‘(ii) fully disclosed and enumerated to 

23 the group health plan or health insurance 

24 issuer, as described in paragraphs (1) and 

25 (3) of subsection (b); and 


pbinns on DSKJLVW7X2PROD with $$_JOB
119 

•S 1339 RS

1 ‘‘(iii) returned to the issuer or entity 

2 providing pharmacy benefit management 

3 services on behalf of the group health plan 

4 if an audit by a plan sponsor, or a third 

5 party designated by a plan sponsor, indi6 cates that the amounts received are incor7 rect after such amounts have been paid to 

8 the group health plan or health insurance 

9 issuer; 

10 ‘‘(B) the rebates, fees, alternative discounts, 

11 and other remuneration under paragraph (1)(B) 

12 shall be remitted in accordance with such proce13 dures as the Secretary, Secretary of Labor, and 

14 Secretary of the Treasury establish; and 

15 ‘‘(C) the records of such rebates, fees, alter16 native discounts, and other remuneration shall 

17 be available for audit by the plan sponsor, 

18 issuer, or a third party designated by a plan 

19 sponsor, not less than once per plan year. 

20 ‘‘(3) AUDIT OF REBATE CONTRACTS.—A third21 party administrator of a group health plan, a health 

22 insurance issuer offering group health insurance cov23 erage, or an entity providing pharmacy benefit man24 agement services on behalf of such group health plan 

25 or health insurance coverage shall make rebate conVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00119 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
120 

•S 1339 RS

1 tracts with rebate aggregators or drug manufacturers 

2 available for audit by the plan sponsor or designated 

3 third party, subject to reasonable restrictions (as de4 termined by the Secretary, the Secretary of Labor, 

5 and the Secretary of the Treasury) on confidentiality 

6 to prevent re-disclosure of such contracts. 

7 ‘‘(4) AUDITORS.—Audits carried out under para8 graphs (2)(C) and (3) shall be performed by an audi9 tor selected by the applicable plan sponsor. 

10 ‘‘(5) RULE OF CONSTRUCTION.—Nothing in this 

11 subsection shall be construed to— 

12 ‘‘(A) prohibit payments to entities offering 

13 pharmacy benefit management services for bona 

14 fide services using a fee structure not described 

15 in this subsection, provided that such fees are 

16 transparent to group health plans and health in17 surance issuers; 

18 ‘‘(B) require a third-party administrator of 

19 a group health plan or an entity providing 

20 pharmacy benefit management services on behalf 

21 of a group health plan or health insurance issuer 

22 offering health insurance coverage to remit bona 

23 fide service fees to group health plans or health 

24 insurance issuers; or 


pbinns on DSKJLVW7X2PROD with $$_JOB
121 

•S 1339 RS

1 ‘‘(C) limit the ability of a group health 

2 plan or health insurance issuer to pass through 

3 rebates, fees, alternative discounts, and other re4 muneration to the participant or beneficiary. 

5 ‘‘(e) ENFORCEMENT.— 

6 ‘‘(1) IN GENERAL.—The Secretary shall enforce 

7 this section. 

8 ‘‘(2) VIOLATIONS.—A group health plan, a health 

9 insurance issuer, or an entity providing pharmacy 

10 benefit management services that violates subsection 

11 (a); an entity providing pharmacy benefit manage12 ment services that fails to provide information re13 quired under subsection (b); a group health plan, 

14 health insurance issuer, or entity providing phar15 macy benefit management services that violates sub16 section (c); or a third-party administrator of a group 

17 health plan, a health insurance issuer, or an entity 

18 providing pharmacy benefit management services that 

19 violates subsection (d) shall be subject to a civil mone20 tary penalty in the amount of $10,000 for each day 

21 during which such violation continues or such infor22 mation is not disclosed or reported. 

23 ‘‘(3) FALSE INFORMATION.—A group health 

24 plan, a health insurance issuer, an entity providing 

25 pharmacy benefit management services, or a thirdVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00121 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
122 

•S 1339 RS

1 party administrator that knowingly provides false in2 formation under this section shall be subject to a civil 

3 money penalty in an amount not to exceed $100,000 

4 for each item of false information. Such civil money 

5 penalty shall be in addition to other penalties as may 

6 be prescribed by law. 

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

8 1128A of the Social Security Act, other than sub9 section (a) and (b) and the first sentence of subsection 

10 (c)(1) of such section shall apply to civil monetary 

11 penalties under this subsection in the same manner as 

12 such provisions apply to a penalty or proceeding 

13 under section 1128A of the Social Security Act. 

14 ‘‘(5) WAIVERS.—The Secretary may waive pen15 alties under paragraph (2), or extend the period of 

16 time for compliance with a requirement of this sec17 tion, for an entity in violation of this section that has 

18 made a good-faith effort to comply with this section. 

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

21 group health plan, entity providing pharmacy benefit man22 agement services on behalf of a group health plan or health 

23 insurance issuer, or other entity to restrict disclosure to, 

24 or otherwise limit the access of, the Secretary of Health and 

25 Human Services, the Secretary of Labor, or the Secretary 


pbinns on DSKJLVW7X2PROD with $$_JOB
123 

•S 1339 RS

1 of the Treasury to a report described in subsection (b)(1) 

2 or information related to compliance with subsections (a), 

3 (b), (c), or (d) by such issuer, plan, or entity. 

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

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

6 ‘‘(A) an applicable group purchasing orga7 nization, drug manufacturer, distributor, whole8 saler, rebate aggregator (or other purchasing en9 tity designed to aggregate rebates), 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 a 

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

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

18 Secretary of Labor, and the Secretary of the 

19 Treasury may specify through rulemaking; 

20 ‘‘(2) the term ‘applicable group purchasing orga21 nization’ means a group purchasing organization 

22 that is affiliated with or under common ownership 

23 with an entity providing pharmacy benefit manage24 ment services; 


pbinns on DSKJLVW7X2PROD with $$_JOB
124 

•S 1339 RS

1 ‘‘(3) the term ‘covered group health insurance 

2 coverage’ means health insurance coverage offered in 

3 connection with a group health plan maintained by 

4 a large employer; 

5 ‘‘(4) the term ‘covered group health plan’ means 

6 a group health plan maintained by a large employer; 

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

8 prescription drug benefits under a group health plan 

9 or health insurance coverage, means the amount spent 

10 by a group health plan or health insurance issuer on 

11 prescription drug benefits, calculated before the appli12 cation of rebates, fees, alternative discounts, or other 

13 remuneration; 

14 ‘‘(6) the term ‘large employer’ means, in connec15 tion with a group health plan with respect to a cal16 endar year and a plan year, an employer who em17 ployed an average of at least 50 employees on busi18 ness days during the preceding calendar year and 

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

20 the plan year; 

21 ‘‘(7) the term ‘net spending’, with respect to pre22 scription drug benefits under a group health plan or 

23 health insurance coverage, means the amount spent by 

24 a group health plan or health insurance issuer on 

25 prescription drug benefits, calculated after the appliVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00124 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
125 

•S 1339 RS

1 cation of rebates, fees, alternative discounts, or other 

2 remuneration; 

3 ‘‘(8) the term ‘plan sponsor’ has the meaning 

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

5 Retirement Income Security Act of 1974; 

6 ‘‘(9) the term ‘remuneration’ has the meaning 

7 given such term by the Secretary, the Secretary of 

8 Labor, and the Secretary of the Treasury, through 

9 rulemaking, which shall be reevaluated by such secre10 taries every 5 years; and 

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

12 the meaning given such term in section 

13 1847A(c)(6)(B) of the Social Security Act.’’; 

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

15 (A) in subsection (a)— 

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

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

18 D’’; and 

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

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

21 D’’; 

22 (B) in subsection (b)— 

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

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

25 D’’; 


pbinns on DSKJLVW7X2PROD with $$_JOB
126 

•S 1339 RS

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

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

3 D’’; and 

4 (iii) in paragraph (2)(C)(ii), by in5 serting ‘‘(other than section 2799A–11)’’ 

6 after ‘‘part D’’; and 

7 (3) in section 2799A–10 (42 U.S.C. 300gg–120), 

8 by adding at the end the following: 

9 ‘‘(d) ENTITIES PROVIDING PHARMACY BENEFIT MAN10 AGEMENT SERVICES.—Beginning 2 years after the date of 

11 enactment of the Pharmacy Benefit Manager Reform Act, 

12 entities providing pharmacy benefit management services 

13 shall report to plan sponsors of group health plans or group 

14 health insurance coverage information required under para15 graphs (4), (5), (6), (7)(A)(iii), and (7)(B) of subsection 

16 (a).’’. 

17 (b) EMPLOYEE RETIREMENT INCOME SECURITY ACT

18 OF 1974.— 

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

20 Employee Retirement Income Security Act of 1974 

21 (29 U.S.C. 1021 et seq.) is amended— 

22 (A) in subpart B of part 7 (29 U.S.C. 1185 

23 et seq.), by adding at the end the following: 


pbinns on DSKJLVW7X2PROD with $$_JOB
127 

•S 1339 RS

1 ‘‘SEC. 726. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR2 MACY BENEFIT MANAGEMENT SERVICES. 

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

4 after the date that is 30 months after the date of enactment 

5 of the Pharmacy Benefit Manager Reform Act, a group 

6 health plan (or health insurance issuer offering group 

7 health insurance coverage in connection with such a plan) 

8 or an entity providing pharmacy benefit management serv9 ices on behalf of such a plan or issuer shall not enter into 

10 a contract with an applicable entity unless such applicable 

11 entity agrees to— 

12 ‘‘(1) not limit the disclosure of information to 

13 plan sponsors in such a manner that prevents the 

14 plan or issuer, or an entity providing pharmacy ben15 efit management services on behalf of a plan or 

16 issuer, from making the reports described in sub17 section (b); and 

18 ‘‘(2) provide the group health plan or health in19 surance issuer offering group health insurance cov20 erage, or an entity providing pharmacy benefit man21 agement services on behalf of a plan or issuer, rel22 evant information necessary to make the reports de23 scribed in subsection (b). 

24 ‘‘(b) REPORTS.— 

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

26 or after the date that is 30 months after the date of 


pbinns on DSKJLVW7X2PROD with $$_JOB
128 

•S 1339 RS

1 enactment of the Pharmacy Benefit Manager Reform 

2 Act, not less frequently than annually, an entity pro3 viding pharmacy benefit management services on be4 half of a covered group health plan or group health 

5 insurance coverage (regardless of whether such cov6 erage is covered group health insurance coverage as 

7 defined in subsection (g)(3)) shall submit to the plan 

8 sponsor of such covered group health plan or issuer of 

9 such health insurance coverage a report in accordance 

10 with this subsection and make such report available 

11 to the plan sponsor or issuer in plain language, in 

12 a machine-readable format, and, as the Secretary, the 

13 Secretary of Health and Human Services, and the 

14 Secretary of the Treasury may determine, other for15 mats. Each such report shall include, with respect to 

16 the covered group health plan or health insurance cov17 erage— 

18 ‘‘(A) as applicable, information collected 

19 from drug manufacturers by such entity on the 

20 total amount of copayment assistance dollars 

21 paid, or copayment cards applied, that were 

22 funded by such drug manufacturers with respect 

23 to the participants and beneficiaries in such 

24 plan or coverage; 


pbinns on DSKJLVW7X2PROD with $$_JOB
129 

•S 1339 RS

1 ‘‘(B) a list of each drug covered by the plan, 

2 coverage, or entity providing pharmacy benefit 

3 management services for which a claim was filed 

4 during the reporting period, including, with re5 spect to each such drug during the reporting pe6 riod— 

7 ‘‘(i) the brand name, generic or non8 proprietary name, and National Drug Code; 

9 ‘‘(ii) the number of participants and 

10 beneficiaries for whom a claim for the drug 

11 was filed during the reporting period, the 

12 total number of prescription claims for the 

13 drug (including original prescriptions and 

14 refills), and the total number of dosage 

15 units of the drug for which a claim was 

16 filed across the reporting period; 

17 ‘‘(iii) for each claim or dosage unit de18 scribed in clause (ii), the type of dispensing 

19 channel used, such as retail, mail order, or 

20 specialty pharmacy; 

21 ‘‘(iv) the wholesale acquisition cost, 

22 listed as cost per days’ supply and cost per 

23 dosage unit; 

24 ‘‘(v) the total out-of-pocket spending by 

25 participants and beneficiaries on such drug 


pbinns on DSKJLVW7X2PROD with $$_JOB
130 

•S 1339 RS

1 after application of any benefits under the 

2 plan or coverage— 

3 ‘‘(I) including copayments, coin4 surance, and deductibles; and 

5 ‘‘(II) not including any amounts 

6 spent by participants and beneficiaries 

7 on drugs not covered under the plan or 

8 coverage or for which no claim is sub9 mitted to the plan or coverage; and 

10 ‘‘(vi) for each of the 50 prescription 

11 drugs with the highest gross spending under 

12 the group health plan or health insurance 

13 coverage during the reporting period— 

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

15 same therapeutic class (as defined by 

16 the Secretary, the Secretary of Health 

17 and Human Services, and the Sec18 retary of the Treasury), including 

19 brand name drugs and biological prod20 ucts and generic drugs or biosimilar 

21 biological products that are in the 

22 same therapeutic class as such drug; 

23 ‘‘(II) if applicable, the rationale 

24 for preferred formulary placement of 

25 such drug in that therapeutic class, seVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00130 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
131 

•S 1339 RS

1 lected from a list of standard ration2 ales established by the Secretary, the 

3 Secretary of Health and Human Serv4 ices, and the Secretary of the Treasury, 

5 in consultation with stakeholders; and 

6 ‘‘(III) any change in formulary 

7 placement compared to the prior plan 

8 year; 

9 ‘‘(C) a list of each therapeutic class (as de10 fined as described in subparagraph (B)(vi)(I)) of 

11 drugs for which a claim was filed under the 

12 group health plan or health insurance coverage 

13 during the reporting period, and, with respect to 

14 each such therapeutic class of drugs, during the 

15 reporting period— 

16 ‘‘(i) total gross spending by the plan or 

17 by the issuer offering such coverage; 

18 ‘‘(ii) the number of participants and 

19 beneficiaries who filled a prescription for a 

20 drug in that class; 

21 ‘‘(iii) if applicable to that class, a de22 scription of the formulary tiers and utiliza23 tion management mechanisms (such as 

24 prior authorization or step therapy) em25 ployed for drugs in that class; 


pbinns on DSKJLVW7X2PROD with $$_JOB
132 

•S 1339 RS

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

2 by participants and beneficiaries on drugs 

3 in such therapeutic class, after application 

4 of any benefits under the plan or coverage— 

5 ‘‘(I) including copayments, coin6 surance, and deductibles; and 

7 ‘‘(II) not including any amounts 

8 spent by participants and beneficiaries 

9 on drugs not covered under the plan or 

10 coverage or for which no claim is sub11 mitted to the plan or issuer; and 

12 ‘‘(v) for each therapeutic class under 

13 which 3 or more drugs are included on the 

14 formulary of such plan or coverage— 

15 ‘‘(I) the amount received, or ex16 pected to be received, by such entity, 

17 from applicable entities, in rebates, 

18 fees, alternative discounts, or other re19 muneration— 

20 ‘‘(aa) for claims incurred 

21 during the reporting period; or 

22 ‘‘(bb) that is related to utili23 zation of drugs or drug spending; 

24 ‘‘(II) the total net spending by the 

25 plan or by the issuer with respect to 


pbinns on DSKJLVW7X2PROD with $$_JOB
133 

•S 1339 RS

1 such coverage on that class of drugs; 

2 and 

3 ‘‘(III) the average net spending 

4 per 30-day supply and per 90-day 

5 supply by the plan or by the issuer 

6 with respect to such coverage and its 

7 participants and beneficiaries, among 

8 all drugs within the therapeutic class 

9 for which a claim was filed during the 

10 reporting period; 

11 ‘‘(D) total gross spending on prescription 

12 drugs by the plan or coverage during the report13 ing period; 

14 ‘‘(E) the total amount received, or expected 

15 to be received, by the group health plan or health 

16 insurance issuer, from applicable entities, in re17 bates, fees, alternative discounts, and other remu18 neration received from such entities, related to 

19 utilization of drugs or drug spending under that 

20 group health plan or health insurance coverage 

21 during the reporting period; 

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

23 drugs by the group health plan or health insur24 ance issuer with respect to the coverage during 

25 the reporting period; 


pbinns on DSKJLVW7X2PROD with $$_JOB
134 

•S 1339 RS

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

2 rebates, fees, or any other type of compensation 

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

4 to brokers, consultants, advisors, or any other in5 dividual or firm for— 

6 ‘‘(i) referral of the group health plan’s 

7 or health insurance issuer’s business to the 

8 pharmacy benefit manager; 

9 ‘‘(ii) consideration of the entity pro10 viding pharmacy benefit management serv11 ices by the group health plan or health in12 surance issuer; or 

13 ‘‘(iii) the retention of the entity by the 

14 group health plan or health insurance 

15 issuer; 

16 ‘‘(H)(i) an explanation of any benefit de17 sign parameters that encourage or require par18 ticipants and beneficiaries in the plan or cov19 erage to fill prescriptions at mail order, spe20 cialty, or retail pharmacies that are affiliated 

21 with or under common ownership with the entity 

22 providing pharmacy benefit management services 

23 on behalf of such plan or coverage, including 

24 mandatory mail and specialty home delivery 

25 programs, retail and mail auto-refill programs, 


pbinns on DSKJLVW7X2PROD with $$_JOB
135 

•S 1339 RS

1 and cost-sharing assistance incentives funded by 

2 an entity providing pharmacy benefit manage3 ment services; 

4 ‘‘(ii) the percentage of total prescriptions 

5 charged to the plan, issuer, or participants and 

6 beneficiaries in the plan or coverage, that were 

7 dispensed by mail order, specialty, or retail 

8 pharmacies that are affiliated with or under 

9 common ownership with the entity providing 

10 pharmacy benefit management services; and 

11 ‘‘(iii) a list of all drugs dispensed by such 

12 affiliated pharmacy or pharmacy under common 

13 ownership and charged to the plan, issuer, or 

14 participants and beneficiaries of the plan or cov15 erage, during the applicable period, and, with 

16 respect to each drug— 

17 ‘‘(I)(aa) the amount charged, per dos18 age unit, per 30-day supply, and per 90- 

19 day supply, with respect to participants 

20 and beneficiaries in the plan or coverage, to 

21 the plan or issuer; and 

22 ‘‘(bb) the amount charged, per dosage 

23 unit, per 30-day supply, and per 90-day 

24 supply to participants and beneficiaries; 


pbinns on DSKJLVW7X2PROD with $$_JOB
136 

•S 1339 RS

1 ‘‘(II) the median amount charged to 

2 the plan or issuer, per dosage unit, per 30- 

3 day supply, and per 90-day supply, includ4 ing amounts paid by the participants and 

5 beneficiaries, when the same drug is dis6 pensed by other pharmacies that are not af7 filiated with or under common ownership 

8 with the entity and that are included in the 

9 pharmacy network of that plan or coverage; 

10 ‘‘(III) the interquartile range of the 

11 costs, per dosage unit, per 30-day supply, 

12 and per 90-day supply, including amounts 

13 paid by the participants and beneficiaries, 

14 when the same drug is dispensed by other 

15 pharmacies that are not affiliated with or 

16 under common ownership with the entity 

17 and that are included in the pharmacy net18 work of that plan or coverage; 

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

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

21 for such drug, including amounts charged to 

22 the plan and participants and beneficiaries, 

23 that is available from any pharmacy in24 cluded in the network of the plan or cov25 erage; 


pbinns on DSKJLVW7X2PROD with $$_JOB
137 

•S 1339 RS

1 ‘‘(V) the net acquisition cost per dosage 

2 unit, per 30-day supply, and per 90-day 

3 supply, if the drug is subject to a maximum 

4 price discount; and 

5 ‘‘(VI) other information with respect to 

6 the cost of the drug, as determined by the 

7 Secretary, the Secretary of Health and 

8 Human Services, and the Secretary of the 

9 Treasury, such as average sales price, 

10 wholesale acquisition cost, and national av11 erage drug acquisition cost per dosage unit 

12 or per 30-day supply, for such drug, includ13 ing amounts charged to the plan or issuer 

14 and participants and beneficiaries among 

15 all pharmacies included in the network of 

16 the plan or coverage; 

17 ‘‘(I) a summary document for plan sponsors 

18 or issuers that includes the information described 

19 in subparagraphs (A) through (H) that the Sec20 retary, the Secretary of Health and Human 

21 Services, and the Secretary of the Treasury de22 termine useful to plan sponsors and health in23 surance issuers for purposes of selecting phar24 macy benefit management services, such as an 

25 estimated net price to plan sponsor and particiVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00137 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
138 

•S 1339 RS

1 pant or beneficiary, a cost per claim, the fee 

2 structure or reimbursement model, and estimated 

3 cost per participant or beneficiary; and 

4 ‘‘(J) a summary document for participants 

5 or beneficiaries, which shall be made available to 

6 participants or beneficiaries upon request to the 

7 plan sponsor, that contains the information de8 scribed in subparagraphs (D) through (G) that 

9 the Secretary, the Secretary of Health and 

10 Human Services, and the Secretary of the Treas11 ury determine useful to participants or bene12 ficiaries in better understanding their plan or 

13 benefits, except that such summary document for 

14 participants or beneficiaries shall contain only 

15 aggregate information. 

16 ‘‘(2) REGULATIONS.—Not later than 2 years 

17 after the date of enactment of the Pharmacy Benefit 

18 Manager Reform Act, the Secretary, the Secretary of 

19 Health and Human Services, and the Secretary of the 

20 Treasury shall, through notice and comment rule21 making, promulgate final regulations to implement 

22 the requirements of this subsection. In promulgating 

23 such regulations, the Secretary, the Secretary of 

24 Health and Human Services, and the Secretary of the 

25 Treasury shall, to the extent practicable, align the reVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00138 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
139 

•S 1339 RS

1 porting requirements under this subsection with the 

2 reporting requirements under section 725. 

3 ‘‘(3) ADDITIONAL REPORTING.— 

4 ‘‘(A) REPORTING WITH RESPECT TO GROUP

5 HEALTH PLANS OFFERED BY SMALL EMPLOY6 ERS.—For plan years beginning on or after the 

7 date that is 30 months after the date of enact8 ment of the Pharmacy Benefit Manager Reform 

9 Act, not less frequently than annually, an entity 

10 providing pharmacy benefit management services 

11 on behalf of a group health plan that is not a 

12 covered group health plan shall submit to the 

13 plan sponsor of such group health plan a report 

14 in accordance with this paragraph, and make 

15 such report available to the plan sponsor in a 

16 machine-readable format, and such other formats 

17 as the Secretary, the Secretary of Health and 

18 Human Services, and the Secretary of the Treas19 ury may specify. Each such report shall include, 

20 with respect to the applicable group health 

21 plan— 

22 ‘‘(i) the information described in sub23 paragraphs (D), (E), (F), and (G) of para24 graph (1); 


pbinns on DSKJLVW7X2PROD with $$_JOB
140 

•S 1339 RS

1 ‘‘(ii) as applicable, information col2 lected from drug manufacturers by such 

3 plan on the total amount of copayment as4 sistance dollars paid, or copayment cards 

5 applied, that were funded by applicable 

6 drug manufacturers with respect to the par7 ticipants and beneficiaries in such plan, ex8 cept that such information shall not iden9 tify any drug manufacturer; and 

10 ‘‘(iii) a summary document that in11 cludes the information described in clauses 

12 (i) and (ii) that the Secretary, the Sec13 retary of Health and Human Services, and 

14 the Secretary of the Treasury determine use15 ful to plan sponsors for purposes of selecting 

16 pharmacy benefit management services, pro17 vided that such summary documents include 

18 only aggregate information. 

19 ‘‘(B) OPT-IN FOR GROUP HEALTH INSUR20 ANCE COVERAGE.— 

21 ‘‘(i) IN GENERAL.—A plan sponsor of 

22 group health insurance coverage offered in 

23 connection with a group health plan may, 

24 on an annual basis, for plan years begin25 ning on or after the date that is 30 months 


pbinns on DSKJLVW7X2PROD with $$_JOB
141 

•S 1339 RS

1 after the date of enactment of the Pharmacy 

2 Benefit Manager Reform Act, elect to re3 quire an entity providing pharmacy benefit 

4 management services on behalf of a health 

5 insurance issuer offering group health in6 surance coverage to submit to such plan 

7 sponsor a report in accordance with this 

8 subsection. 

9 ‘‘(ii) CONTENTS OF REPORTS.— 

10 ‘‘(I) COVERED GROUP HEALTH IN11 SURANCE COVERAGE.—In the case of 

12 an entity providing pharmacy benefit 

13 management services on behalf of an 

14 issuer that offers covered group health 

15 insurance coverage, a report provided 

16 pursuant to clause (i) shall include, 

17 with respect to the applicable covered 

18 group health insurance coverage, the 

19 information required under paragraph 

20 (1) for covered group health plans. 

21 ‘‘(II) OTHER GROUP HEALTH IN22 SURANCE COVERAGE.—In the case of 

23 an entity providing pharmacy benefit 

24 management services on behalf of an 

25 issuer that offers group health insurVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00141 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
142 

•S 1339 RS

1 ance coverage that is not covered group 

2 health insurance, a report provided 

3 pursuant to clause (i) shall include, 

4 with respect to the applicable group 

5 health insurance coverage— 

6 ‘‘(aa) the information de7 scribed in subparagraphs (D), 

8 (E), (F), and (G) of paragraph 

9 (1); and 

10 ‘‘(bb) as applicable, informa11 tion collected from drug manufac12 turers by such issuer or entity on 

13 the total amount of copayment as14 sistance dollars paid, or copay15 ment cards applied, that were 

16 funded by applicable drug manu17 facturers with respect to the par18 ticipants and beneficiaries in such 

19 plan, except that such information 

20 shall not identify any drug manu21 facturer. 

22 ‘‘(iii) REQUIRED REPORTING FOR COV23 ERED GROUP HEALTH INSURANCE COV24 ERAGE.—Each health insurance issuer that 

25 offers covered group health insurance covVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00142 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
143 

•S 1339 RS

1 erage shall annually submit to the plan 

2 sponsor the information described in para3 graph (1)(I), regardless of whether the plan 

4 sponsor made the election described in 

5 clause (i) for the applicable year. 

6 ‘‘(iv) REQUIRED REPORTING FOR

7 OTHER GROUP HEALTH INSURANCE COV8 ERAGE.—Each health insurance issuer that 

9 offers group health insurance coverage that 

10 is not covered group health insurance shall 

11 annually submit a summary document that 

12 includes such information described in 

13 items (aa) and (bb) of clause (ii)(II) as the 

14 Secretary and the Secretary of Health and 

15 Human Services determine useful for plan 

16 sponsors for purposes of selecting pharmacy 

17 benefit management services, provided that 

18 such summary documents include only ag19 gregate information. 

20 ‘‘(4) PRIVACY REQUIREMENTS.— 

21 ‘‘(A) RELATIONSHIP TO HIPAA REGULA22 TIONS.—Nothing in this section shall be con23 strued to modify the requirements for the cre24 ation, receipt, maintenance, or transmission of 

25 protected health information under the HIPAA 


pbinns on DSKJLVW7X2PROD with $$_JOB
144 

•S 1339 RS

1 privacy regulations, as defined in section 

2 1180(b)(3) of the Social Security Act (42 U.S.C. 

3 1320d–9(b)(3)). 

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

5 under paragraph (1) or (3) shall contain only 

6 summary health information, as defined in sec7 tion 164.504(a) of title 45, Code of Federal Regu8 lations (or successor regulations). 

9 ‘‘(C) CLARIFICATION REGARDING CERTAIN

10 DISCLOSURES OF INFORMATION.— 

11 ‘‘(i) REASONABLE RESTRICTIONS.— 

12 Nothing in this section prevents a health in13 surance issuer offering group health insur14 ance coverage or an entity providing phar15 macy benefit management services on behalf 

16 of a group health plan or health insurance 

17 issuer offering group health insurance cov18 erage from placing reasonable restrictions 

19 (as the Secretary, the Secretary of Health 

20 and Human Services, and the Secretary of 

21 the Treasury may determine) on the public 

22 disclosure of the information contained in a 

23 report under paragraph (1) or (3). 

24 ‘‘(ii) LIMITATIONS.—A health insur25 ance issuer offering group health insurance 


pbinns on DSKJLVW7X2PROD with $$_JOB
145 

•S 1339 RS

1 coverage or an entity providing pharmacy 

2 benefit management services on behalf of a 

3 group health plan or health insurance issuer 

4 offering group health insurance coverage 

5 may not restrict disclosure of such reports 

6 to the Department of Health and Human 

7 Services, the Department of Labor, the De8 partment of the Treasury, or any other Fed9 eral agency responsible for enforcement ac10 tivities under this section for purposes of 

11 enforcement under this section or other ap12 plicable law, or to the Comptroller General 

13 of the United States in accordance with 

14 paragraph (6). 

15 ‘‘(5) USE AND DISCLOSURE BY PLAN SPON16 SORS.— 

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

18 not— 

19 ‘‘(i) fail or refuse to hire, or discharge, 

20 any employee, or otherwise discriminate 

21 against any employee with respect to the 

22 compensation, terms, conditions, or privi23 leges of employment of the employee, because 

24 of information submitted under paragraph 


pbinns on DSKJLVW7X2PROD with $$_JOB
146 

•S 1339 RS

1 (1) or (3) attributed to the employee or a 

2 dependent of the employee; or 

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

4 employees of the employer in any way that 

5 would deprive or tend to deprive any em6 ployee of employment opportunities or oth7 erwise adversely affect the status of the em8 ployee as an employee, because of informa9 tion submitted under paragraph (1) or (3) 

10 attributed to the employee or a dependent of 

11 the employee. 

12 ‘‘(B) DISCLOSURE AND REDISCLOSURE.—A 

13 plan sponsor shall not disclose the information 

14 received under paragraph (1) or (3) except— 

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

16 researcher if the research is conducted in 

17 compliance with the regulations and protec18 tions provided for under part 46 of title 45, 

19 Code of Federal Regulations (or successor 

20 regulations); 

21 ‘‘(ii) in response to an order of a court, 

22 except that the plan sponsor may disclose 

23 only the information expressly authorized 

24 by such order; 


pbinns on DSKJLVW7X2PROD with $$_JOB
147 

•S 1339 RS

1 ‘‘(iii) to the Department of Health and 

2 Human Services, the Department of Labor, 

3 the Department of the Treasury, or other 

4 Federal agency responsible for enforcement 

5 activities under this section; or 

6 ‘‘(iv) to a contractor or agent for pur7 poses of health plan administration, if such 

8 contractor or agent agrees, in writing, and 

9 as a term of the contract, to abide by the 

10 same use and disclosure restrictions as the 

11 plan sponsor. 

12 ‘‘(C) RELATIONSHIP TO HIPAA REGULA13 TIONS.—With respect to HIPAA privacy regula14 tions, as defined in section 1180(b)(3) of the So15 cial Security Act (42 U.S.C. 1320d–9(b)(3)), 

16 subparagraph (B) does not prohibit a covered en17 tity (as defined for purposes of such regulations 

18 promulgated under section 264 of the Health In19 surance Portability and Accountability Act of 

20 1996 (42 U.S.C. 1320d–2)) from any use or dis21 closure of health information that is authorized 

22 for the covered entity under such regulations. 

23 The previous sentence does not affect the author24 ity of such Secretary to modify such regulations. 


pbinns on DSKJLVW7X2PROD with $$_JOB
148 

•S 1339 RS

1 ‘‘(D) WRITTEN NOTICE.—Plan sponsors of 

2 group health plans and group health insurance 

3 coverage shall provide to each employee written 

4 notice informing the employee of the requirement 

5 for health insurance issuers or entities providing 

6 pharmacy benefit management services on behalf 

7 of the plan or coverage to submit reports to plan 

8 sponsors under paragraphs (1) and (3), as appli9 cable, which may include incorporating such no10 tification in plan documents provided to the em11 ployee, an employee handbook provided to the 

12 employee, or individual notification. 

13 ‘‘(E) ENFORCEMENT.— 

14 ‘‘(i) IN GENERAL.—The powers, proce15 dures, and remedies provided in section 207 

16 of the Genetic Information Nondiscrimina17 tion Act (42 U.S.C. 2000ff–6) to a person 

18 alleging a violation of title II of such Act 

19 shall be the powers, procedures, and rem20 edies this subparagraph provides for any 

21 person alleging a violation of this para22 graph. 

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

25 against any individual because such indiVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00148 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
149 

•S 1339 RS

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 hear6 ing under this paragraph. The remedies and 

7 procedures otherwise provided for under this 

8 subparagraph shall be available to aggrieved 

9 individuals with respect to violations of this 

10 clause. 

11 ‘‘(6) SUBMISSIONS TO GAO.—A health insurance 

12 issuer offering group health insurance coverage or an 

13 entity providing pharmacy benefit management serv14 ices on behalf of a group health plan shall submit, 

15 upon request, to the Comptroller General of the 

16 United States each of the first 2 reports submitted to 

17 a plan sponsor under paragraph (1) or (3) with re18 spect to such coverage or plan, and other such reports 

19 as requested, in accordance with the privacy require20 ments under paragraph (4), and such other informa21 tion that the Comptroller General determines nec22 essary to carry out the study under section 2(f) of the 

23 Pharmacy Benefit Manager Reform Act. 

24 ‘‘(7) STANDARD FORMATS.— 


pbinns on DSKJLVW7X2PROD with $$_JOB
150 

•S 1339 RS

1 ‘‘(A) IN GENERAL.—Not later than June 1, 

2 2024, the Secretary, the Secretary of Health and 

3 Human Services, and the Secretary of the Treas4 ury shall specify, through rulemaking, standard 

5 formats for entities providing pharmacy benefit 

6 management services to submit reports required 

7 under this subsection. Such secretaries may pro8 vide for separate standard formats for reports to 

9 plan sponsors of group health plans and reports 

10 to plan sponsors of group health insurance cov11 erage offered in connection with a group health 

12 plan. 

13 ‘‘(B) FORM OF REPORT.—The Secretary, the 

14 Secretary of Health and Human Services, and 

15 the Secretary of the Treasury shall define 

16 through rulemaking a form of the reports under 

17 paragraphs (1) and (3) required to be submitted 

18 to plan sponsors who also are drug manufactur19 ers, drug wholesalers, entities providing phar20 macy benefit management services, or other di21 rect participants in the drug supply chain, in 

22 the case that such secretaries determine that 

23 changes to the standard format are necessary to 

24 prevent anticompetitive behavior. 

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


pbinns on DSKJLVW7X2PROD with $$_JOB
151 

•S 1339 RS

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

2 or after the date that is 30 months after the date of 

3 enactment of the Pharmacy Benefit Manager Reform 

4 Act, a group health plan or health insurance issuer 

5 offering group health insurance coverage shall ensure 

6 that the amount required to be paid by a participant 

7 or beneficiary for a prescription drug covered under 

8 the plan or coverage, and a third-party administrator 

9 or an entity providing pharmacy benefit management 

10 services on behalf of such a plan or coverage shall en11 sure that the total amount required to be paid by the 

12 plan or issuer and participant or beneficiary for a 

13 prescription drug covered under the plan or coverage, 

14 does not exceed the price paid to the pharmacy, ex15 cluding penalties paid by the pharmacy (as described 

16 in paragraph (2)) to such plan, issuer, or entity. 

17 ‘‘(2) RULE OF CONSTRUCTION.—For purposes of 

18 paragraph (1), penalties paid by pharmacies include 

19 only the following: 

20 ‘‘(A) A penalty paid if an original claim 

21 for a prescription drug was submitted fraudu22 lently by the pharmacy to the plan, issuer, or en23 tity. 

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

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


pbinns on DSKJLVW7X2PROD with $$_JOB
152 

•S 1339 RS

1 the pharmacy was inconsistent with the reim2 bursement terms in any contract between the 

3 pharmacy and the plan, issuer, or entity. 

4 ‘‘(C) A penalty paid if the pharmacist serv5 ices for which a claim was filed with the plan, 

6 issuer, or entity were not rendered by the phar7 macy. 

8 ‘‘(d) FULL REBATE PASS-THROUGH TO PLAN OR

9 HEALTH INSURANCE ISSUER.— 

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

11 or after the date that is 30 months after the date of 

12 enactment of the Pharmacy Benefit Manager Reform 

13 Act, a third-party administrator of a group health 

14 plan or an entity providing pharmacy benefit man15 agement services on behalf of a group health plan or 

16 health insurance issuer offering group health insur17 ance coverage shall— 

18 ‘‘(A) remit 100 percent of rebates, fees, al19 ternative discounts, and other remuneration re20 ceived from any applicable entity that are re21 lated to utilization of drugs under such group 

22 health plan or health insurance coverage, to the 

23 group health plan or health insurance issuer of24 fering group health insurance coverage; and 


pbinns on DSKJLVW7X2PROD with $$_JOB
153 

•S 1339 RS

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

2 by such third-party administrator or entity pro3 viding pharmacy benefit management services on 

4 behalf of such a plan or coverage, with rebate 

5 aggregators (or other purchasing entity designed 

6 to aggregate rebates), applicable group pur7 chasing organizations, or any subsidiary, par8 ent, affiliate, or subcontractor of the plan, entity, 

9 rebate aggregator (or other purchasing entity de10 signed to aggregate rebates), or applicable group 

11 purchasing organization remit 100 percent of re12 bates, fees, alternative discounts, and other remu13 neration received that are related to utilization 

14 of drugs under such group health plan or health 

15 insurance coverage, to the third-party adminis16 trator or entity providing pharmacy benefit 

17 management services. 

18 ‘‘(2) FORM AND MANNER OF REMITTANCE.—With 

19 respect to such rebates, fees, alternative discounts, and 

20 other remuneration— 

21 ‘‘(A) the rebates, fees, alternative discounts, 

22 and other remuneration under paragraph (1)(A) 

23 shall be— 

24 ‘‘(i) remitted— 


pbinns on DSKJLVW7X2PROD with $$_JOB
154 

•S 1339 RS

1 ‘‘(I) on a quarterly basis, to the 

2 group health plan or the group health 

3 insurance issuer, not later than 90 

4 days after the end of each quarter; or 

5 ‘‘(II) in the case of an under6 payment in a remittance for a prior 

7 quarter, as soon as practicable, but not 

8 later than 90 days after notice of the 

9 underpayment is first given; 

10 ‘‘(ii) fully disclosed and enumerated to 

11 the group health plan or health insurance 

12 issuer, as described in paragraphs (1) and 

13 (3) of subsection (b); and 

14 ‘‘(iii) returned to the issuer or entity 

15 providing pharmacy benefit management 

16 services on behalf of the group health plan 

17 if an audit by a plan sponsor, or a third 

18 party designated by a plan sponsor, indi19 cates that the amounts received are incor20 rect after such amounts have been paid to 

21 the group health plan or health insurance 

22 issuer; 

23 ‘‘(B) the rebates, fees, alternative discounts, 

24 and other remuneration under paragraph (1)(B) 

25 shall be remitted in accordance with such proceVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00154 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
155 

•S 1339 RS

1 dures as the Secretary, Secretary of Health and 

2 Human Services, and Secretary of the Treasury 

3 establish; and 

4 ‘‘(C) the records of such rebates, fees, alter5 native discounts, and other remuneration shall 

6 be available for audit by the plan sponsor, 

7 issuer, or a third party designated by a plan 

8 sponsor, not less than once per plan year. 

9 ‘‘(3) AUDIT OF REBATE CONTRACTS.—A third10 party administrator of a group health plan, a health 

11 insurance issuer offering group health insurance cov12 erage, or an entity providing pharmacy benefit man13 agement services on behalf of such group health plan 

14 or health insurance coverage shall make rebate con15 tracts with rebate aggregators or drug manufacturers 

16 available for audit by the plan sponsor or designated 

17 third party, subject to reasonable restrictions (as de18 termined by the Secretary, the Secretary of Health 

19 and Human Services, and the Secretary of the Treas20 ury) on confidentiality to prevent re-disclosure of 

21 such contracts. 

22 ‘‘(4) AUDITORS.—Audits carried out under para23 graphs (2)(C) and (3) shall be performed by an audi24 tor selected by the applicable plan sponsor. 


pbinns on DSKJLVW7X2PROD with $$_JOB
156 

•S 1339 RS

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

2 subsection shall be construed to— 

3 ‘‘(A) prohibit payments to entities offering 

4 pharmacy benefit management services for bona 

5 fide services using a fee structure not described 

6 in this subsection, provided that such fees are 

7 transparent to group health plans and health in8 surance issuers; 

9 ‘‘(B) require a third-party administrator of 

10 a group health plan or an entity providing 

11 pharmacy benefit management services on behalf 

12 of a group health plan or health insurance issuer 

13 offering group health insurance coverage to remit 

14 bona fide service fees to the group health plans 

15 or health insurance issuers; or 

16 ‘‘(C) limit the ability of a group health 

17 plan or health insurance issuer to pass through 

18 rebates, fees, alternative discounts, and other re19 muneration to the participant or beneficiary. 

20 ‘‘(e) ENFORCEMENT.— 

21 ‘‘(1) IN GENERAL.—The Secretary shall enforce 

22 this section. 

23 ‘‘(2) VIOLATIONS.—A group health plan, a health 

24 insurance issuer, or an entity providing pharmacy 

25 benefit management services that violates subsection 


pbinns on DSKJLVW7X2PROD with $$_JOB
157 

•S 1339 RS

1 (a); an entity providing pharmacy benefit manage2 ment services that fails to provide information re3 quired under subsection (b); a group health plan, 

4 health insurance issuer, or entity providing phar5 macy benefit management services that violates sub6 section (c); or a third-party administrator of a group 

7 health plan, a health insurance issuer, or an entity 

8 providing pharmacy benefit management services that 

9 violates subsection (d) shall be subject to a civil mone10 tary penalty in the amount of $10,000 for each day 

11 during which such violation continues or such infor12 mation is not disclosed or reported. 

13 ‘‘(3) FALSE INFORMATION.—A group health 

14 plan, a health insurance issuer, an entity providing 

15 pharmacy benefit management services, or a third16 party administrator that knowingly provides false in17 formation under this section shall be subject to a civil 

18 money penalty in an amount not to exceed $100,000 

19 for each item of false information. Such civil money 

20 penalty shall be in addition to other penalties as may 

21 be prescribed by law. 

22 ‘‘(4) PROCEDURE.—The Secretary shall impose 

23 civil monetary penalties under this subsection in the 

24 same manner and according to the same procedures 


pbinns on DSKJLVW7X2PROD with $$_JOB
158 

•S 1339 RS

1 as the Secretary imposes civil monetary penalties as 

2 described in section 502(c)(10). 

3 ‘‘(5) WAIVERS.—The Secretary may waive pen4 alties under paragraph (2), or extend the period of 

5 time for compliance with a requirement of this sec6 tion, for an entity in violation of this section that has 

7 made a good-faith effort to comply with this section. 

8 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec9 tion shall be construed to permit a health insurance issuer, 

10 group health plan, entity providing pharmacy benefit man11 agement services on behalf of a group health plan or health 

12 insurance issuer, or other entity to restrict disclosure to, 

13 or otherwise limit the access of, the Secretary of Labor, the 

14 Secretary of Health and Human Services, or the Secretary 

15 of the Treasury to a report described in subsection (b)(1) 

16 or information related to compliance with subsections (a), 

17 (b), (c), or (d) by such issuer, plan, or entity. 

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

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

20 ‘‘(A) an applicable group purchasing orga21 nization, drug manufacturer, distributor, whole22 saler, rebate aggregator (or other purchasing en23 tity designed to aggregate rebates), or associated 

24 third party; 


pbinns on DSKJLVW7X2PROD with $$_JOB
159 

•S 1339 RS

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

2 subcontractor of a group health plan, health in3 surance issuer, entity that provides pharmacy 

4 benefit management services on behalf of such a 

5 plan or issuer, or any entity described in sub6 paragraph (A); or 

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

8 Secretary of Health and Human Services, and 

9 the Secretary of the Treasury may specify 

10 through rulemaking; 

11 ‘‘(2) the term ‘applicable group purchasing orga12 nization’ means a group purchasing organization 

13 that is affiliated with or under common ownership 

14 with an entity providing pharmacy benefit manage15 ment services; 

16 ‘‘(3) the term ‘covered group health insurance 

17 coverage’ means health insurance coverage offered in 

18 connection with a group health plan maintained by 

19 a large employer; 

20 ‘‘(4) the term ‘covered group health plan’ means 

21 a group health plan maintained by a large employer; 

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

23 prescription drug benefits under a group health plan 

24 or health insurance coverage, means the amount spent 

25 by a group health plan or health insurance issuer on 


pbinns on DSKJLVW7X2PROD with $$_JOB
160 

•S 1339 RS

1 prescription drug benefits, calculated before the appli2 cation of rebates, fees, alternative discounts, or other 

3 remuneration; 

4 ‘‘(6) the term ‘large employer’ means, in connec5 tion with a group health plan with respect to a cal6 endar year and a plan year, an employer who em7 ployed an average of at least 50 employees on busi8 ness days during the preceding calendar year and 

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

10 the plan year; 

11 ‘‘(7) the term ‘net spending’, with respect to pre12 scription drug benefits under a group health plan or 

13 health insurance coverage, means the amount spent by 

14 a group health plan or health insurance issuer on 

15 prescription drug benefits, calculated after the appli16 cation of rebates, fees, alternative discounts, or other 

17 remuneration; 

18 ‘‘(8) the term ‘plan sponsor’ has the meaning 

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

20 ‘‘(9) the term ‘remuneration’ has the meaning 

21 given such term by the Secretary, the Secretary of 

22 Health and Human Services, and the Secretary of the 

23 Treasury, through rulemaking, which shall be reevalu24 ated by such secretaries every 5 years; and 


pbinns on DSKJLVW7X2PROD with $$_JOB
161 

•S 1339 RS

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

2 the meaning given such term in section 

3 1847A(c)(6)(B) of the Social Security Act (42 U.S.C. 

4 1395w–3a(c)(6)(B)).’’; and 

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

6 1132(b)(3)), by inserting ‘‘(other than section 

7 726)’’ after ‘‘part 7’’. 

8 (2) CLERICAL AMENDMENT.—The table of con9 tents in section 1 of the Employee Retirement Income 

10 Security Act of 1974 (29 U.S.C. 1001 et seq.) is 

11 amended by inserting after the item relating to sec12 tion 725 the following new item: 

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

13 (3) ADDITIONAL REPORTING REQUIREMENT.— 

14 Section 725 of the Employee Retirement Income Secu15 rity Act of 1974 (29 U.S.C. 1185n) is amended by 

16 adding at the end the following: 

17 ‘‘(d) ENTITIES PROVIDING PHARMACY BENEFIT MAN18 AGEMENT SERVICES.—Beginning 2 years after the date of 

19 enactment of the Pharmacy Benefit Manager Reform Act, 

20 entities providing pharmacy benefit management services 

21 shall report to plan sponsors of group health plans informa22 tion required under paragraphs (4), (5), (6), (7)(A)(iii), 

23 and (7)(B) of subsection (a).’’. 

24 (c) INTERNAL REVENUE CODE OF 1986.— 


pbinns on DSKJLVW7X2PROD with $$_JOB
162 

•S 1339 RS

1 (1) IN GENERAL.—Subchapter B of chapter 100 

2 of the Internal Revenue Code of 1986 is amended by 

3 adding at the end the following: 

4 ‘‘SEC. 9826. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR5 MACY BENEFIT MANAGEMENT SERVICES. 

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

7 after the date that is 30 months after the date of enactment 

8 of the Pharmacy Benefit Manager Reform Act, a group 

9 health plan or an entity providing pharmacy benefit man10 agement services on behalf of such a plan shall not enter 

11 into a contract with an applicable entity unless such appli12 cable entity agrees to— 

13 ‘‘(1) not limit the disclosure of information to 

14 plan sponsors in such a manner that prevents the 

15 plan, or an entity providing pharmacy benefit man16 agement services on behalf of a plan, from making the 

17 reports described in subsection (b); and 

18 ‘‘(2) provide the group health plan or an entity 

19 providing pharmacy benefit management services on 

20 behalf of a plan, relevant information necessary to 

21 make the reports described in subsection (b). 

22 ‘‘(b) REPORTS.— 

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

24 or after the date that is 30 months after the date of 

25 enactment of the Pharmacy Benefit Manager Reform 


pbinns on DSKJLVW7X2PROD with $$_JOB
163 

•S 1339 RS

1 Act, not less frequently than annually, an entity pro2 viding pharmacy benefit management services on be3 half of a covered group health plan shall submit to the 

4 plan sponsor of such covered group health plan a re5 port in accordance with this subsection and make 

6 such report available to the plan sponsor in plain 

7 language, in a machine-readable format, and, as the 

8 Secretary, the Secretary of Labor, and the Secretary 

9 of Health and Human Services may determine, other 

10 formats. Each such report shall include, with respect 

11 to the covered group health plan— 

12 ‘‘(A) as applicable, information collected 

13 from drug manufacturers by such entity on the 

14 total amount of copayment assistance dollars 

15 paid, or copayment cards applied, that were 

16 funded by such drug manufacturers with respect 

17 to the participants and beneficiaries in such 

18 plan; 

19 ‘‘(B) a list of each drug covered by the plan 

20 or entity providing pharmacy benefit manage21 ment services for which a claim was filed during 

22 the reporting period, including, with respect to 

23 each such drug during the reporting period— 

24 ‘‘(i) the brand name, generic or non25 proprietary name, and National Drug Code; 


pbinns on DSKJLVW7X2PROD with $$_JOB
164 

•S 1339 RS

1 ‘‘(ii) the number of participants and 

2 beneficiaries for whom a claim for the drug 

3 was filed during the reporting period, the 

4 total number of prescription claims for the 

5 drug (including original prescriptions and 

6 refills), and the total number of dosage 

7 units of the drug for which a claim was 

8 filed across the reporting period; 

9 ‘‘(iii) for each claim or dosage unit de10 scribed in clause (ii), the type of dispensing 

11 channel used, such as retail, mail order, or 

12 specialty pharmacy; 

13 ‘‘(iv) the wholesale acquisition cost, 

14 listed as cost per days’ supply and cost per 

15 dosage unit; 

16 ‘‘(v) the total out-of-pocket spending by 

17 participants and beneficiaries on such drug 

18 after application of any benefits under the 

19 plan— 

20 ‘‘(I) including copayments, coin21 surance, and deductibles; and 

22 ‘‘(II) not including any amounts 

23 spent by participants and beneficiaries 

24 on drugs not covered under the plan or 


pbinns on DSKJLVW7X2PROD with $$_JOB
165 

•S 1339 RS

1 for which no claim is submitted to the 

2 plan; and 

3 ‘‘(vi) for each of the 50 prescription 

4 drugs with the highest gross spending under 

5 the group health plan during the reporting 

6 period— 

7 ‘‘(I) a list of all other drugs in the 

8 same therapeutic class (as defined by 

9 the Secretary, the Secretary of Labor, 

10 and the Secretary of Health and 

11 Human Services), including brand 

12 name drugs and biological products 

13 and generic drugs or biosimilar bio14 logical products that are in the same 

15 therapeutic class as such drug; 

16 ‘‘(II) if applicable, the rationale 

17 for preferred formulary placement of 

18 such drug in that therapeutic class, se19 lected from a list of standard ration20 ales established by the Secretary, the 

21 Secretary of Labor, and the Secretary 

22 of Health and Human Services, in 

23 consultation with stakeholders; and 


pbinns on DSKJLVW7X2PROD with $$_JOB
166 

•S 1339 RS

1 ‘‘(III) any change in formulary 

2 placement compared to the prior plan 

3 year; 

4 ‘‘(C) a list of each therapeutic class (as de5 fined as described in subparagraph (B)(vi)(I)) of 

6 drugs for which a claim was filed under the 

7 group health plan during the reporting period, 

8 and, with respect to each such therapeutic class 

9 of drugs, during the reporting period— 

10 ‘‘(i) total gross spending by the plan; 

11 ‘‘(ii) the number of participants and 

12 beneficiaries who filled a prescription for a 

13 drug in that class; 

14 ‘‘(iii) if applicable to that class, a de15 scription of the formulary tiers and utiliza16 tion management mechanisms (such as 

17 prior authorization or step therapy) em18 ployed for drugs in that class; 

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

20 by participants and beneficiaries on drugs 

21 in such therapeutic class, after application 

22 of any benefits under the plan— 

23 ‘‘(I) including copayments, coin24 surance, and deductibles; and 


pbinns on DSKJLVW7X2PROD with $$_JOB
167 

•S 1339 RS

1 ‘‘(II) not including any amounts 

2 spent by participants and beneficiaries 

3 on drugs not covered under the plan or 

4 for which no claim is submitted to the 

5 plan; and 

6 ‘‘(v) for each therapeutic class under 

7 which 3 or more drugs are included on the 

8 formulary of such plan— 

9 ‘‘(I) the amount received, or ex10 pected to be received, by such entity, 

11 from applicable entities, in rebates, 

12 fees, alternative discounts, or other re13 muneration— 

14 ‘‘(aa) for claims incurred 

15 during the reporting period; or 

16 ‘‘(bb) that is related to utili17 zation of drugs or drug spending; 

18 ‘‘(II) the total net spending by the 

19 plan on that class of drugs; and 

20 ‘‘(III) the average net spending 

21 per 30-day supply and per 90-day 

22 supply by the plan and its partici23 pants and beneficiaries, among all 

24 drugs within the therapeutic class for 


pbinns on DSKJLVW7X2PROD with $$_JOB
168 

•S 1339 RS

1 which a claim was filed during the re2 porting period; 

3 ‘‘(D) total gross spending on prescription 

4 drugs by the plan during the reporting period; 

5 ‘‘(E) the total amount received, or expected 

6 to be received, by the group health plan, from ap7 plicable entities, in rebates, fees, alternative dis8 counts, and other remuneration received from 

9 such entities, related to utilization of drugs or 

10 drug spending under that group health plan dur11 ing the reporting period; 

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

13 drugs by the group health plan during the re14 porting period; 

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

16 rebates, fees, or any other type of compensation 

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

18 of the Employee Retirement Income Security Act 

19 of 1974 (29 U.S.C. 1108(b)(2)(B)(ii)(dd)(A))) to 

20 brokers, consultants, advisors, or any other indi21 vidual or firm for— 

22 ‘‘(i) referral of the group health plan’s 

23 business to the pharmacy benefit manager; 


pbinns on DSKJLVW7X2PROD with $$_JOB
169 

•S 1339 RS

1 ‘‘(ii) consideration of the entity pro2 viding pharmacy benefit management serv3 ices by the group health plan; or 

4 ‘‘(iii) the retention of the entity by the 

5 group health plan; 

6 ‘‘(H)(i) an explanation of any benefit de7 sign parameters that encourage or require par8 ticipants and beneficiaries in the plan to fill 

9 prescriptions at mail order, specialty, or retail 

10 pharmacies that are affiliated with or under 

11 common ownership with the entity providing 

12 pharmacy benefit management services on behalf 

13 of such plan, including mandatory mail and 

14 specialty home delivery programs, retail and 

15 mail auto-refill programs, and cost-sharing as16 sistance incentives funded by an entity providing 

17 pharmacy benefit management services; 

18 ‘‘(ii) the percentage of total prescriptions 

19 charged to the plan or participants and bene20 ficiaries in the plan, that were dispensed by mail 

21 order, specialty, or retail pharmacies that are af22 filiated with or under common ownership with 

23 the entity providing pharmacy benefit manage24 ment services; and 


pbinns on DSKJLVW7X2PROD with $$_JOB
170 

•S 1339 RS

1 ‘‘(iii) a list of all drugs dispensed by such 

2 affiliated pharmacy or pharmacy under common 

3 ownership and charged to the plan, or partici4 pants and beneficiaries of the plan, during the 

5 applicable period, and, with respect to each 

6 drug— 

7 ‘‘(I)(aa) the amount charged, per dos8 age unit, per 30-day supply, and per 90- 

9 day supply, with respect to participants 

10 and beneficiaries in the plan, to the plan; 

11 and 

12 ‘‘(bb) the amount charged, per dosage 

13 unit, per 30-day supply, and per 90-day 

14 supply to participants and beneficiaries; 

15 ‘‘(II) the median amount charged to 

16 the plan, per dosage unit, per 30-day sup17 ply, and per 90-day supply, including 

18 amounts paid by the participants and bene19 ficiaries, when the same drug is dispensed 

20 by other pharmacies that are not affiliated 

21 with or under common ownership with the 

22 entity and that are included in the phar23 macy network of that plan; 

24 ‘‘(III) the interquartile range of the 

25 costs, per dosage unit, per 30-day supply, 


pbinns on DSKJLVW7X2PROD with $$_JOB
171 

•S 1339 RS

1 and per 90-day supply, including amounts 

2 paid by the participants and beneficiaries, 

3 when the same drug is dispensed by other 

4 pharmacies that are not affiliated with or 

5 under common ownership with the entity 

6 and that are included in the pharmacy net7 work of that plan; 

8 ‘‘(IV) the lowest cost, per dosage unit, 

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

10 for such drug, including amounts charged to 

11 the plan and participants and beneficiaries, 

12 that is available from any pharmacy in13 cluded in the network of the plan; 

14 ‘‘(V) the net acquisition cost per dosage 

15 unit, per 30-day supply, and per 90-day 

16 supply, if the drug is subject to a maximum 

17 price discount; and 

18 ‘‘(VI) other information with respect to 

19 the cost of the drug, as determined by the 

20 Secretary, the Secretary of Labor, and the 

21 Secretary of Health and Human Services, 

22 such as average sales price, wholesale acqui23 sition cost, and national average drug ac24 quisition cost per dosage unit or per 30-day 

25 supply, for such drug, including amounts 


pbinns on DSKJLVW7X2PROD with $$_JOB
172 

•S 1339 RS

1 charged to the plan and participants and 

2 beneficiaries among all pharmacies included 

3 in the network of the plan; 

4 ‘‘(I) a summary document for plan sponsors 

5 that includes the information described in sub6 paragraphs (A) through (H) that the Secretary, 

7 the Secretary of Labor, and the Secretary of 

8 Health and Human Services determine useful to 

9 plan sponsors for purposes of selecting pharmacy 

10 benefit management services, such as an esti11 mated net price to plan sponsor and participant 

12 or beneficiary, a cost per claim, the fee structure 

13 or reimbursement model, and estimated cost per 

14 participant or beneficiary; and 

15 ‘‘(J) a summary document for participants 

16 or beneficiaries, which shall be made available to 

17 participants or beneficiaries upon request to the 

18 plan sponsor, that contains the information de19 scribed in subparagraphs (D) through (G) that 

20 the Secretary, the Secretary of Labor, and the 

21 Secretary of Health and Human Services deter22 mine useful to participants or beneficiaries in 

23 better understanding their plan or benefits, ex24 cept that such summary document for particiVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00172 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
173 

•S 1339 RS

1 pants or beneficiaries shall contain only aggre2 gate information. 

3 ‘‘(2) REGULATIONS.—Not later than 2 years 

4 after the date of enactment of the Pharmacy Benefit 

5 Manager Reform Act, the Secretary, the Secretary of 

6 Labor, and the Secretary of Health and Human Serv7 ices shall, through notice and comment rulemaking, 

8 promulgate final regulations to implement the re9 quirements of this subsection. In promulgating such 

10 regulations, the Secretary, the Secretary of Labor, 

11 and the Secretary of Health and Human Services 

12 shall, to the extent practicable, align the reporting re13 quirements under this subsection with the reporting 

14 requirements under section 9825. 

15 ‘‘(3) ADDITIONAL REPORTING.—For plan years 

16 beginning on or after the date that is 30 months after 

17 the date of enactment of the Pharmacy Benefit Man18 ager Reform Act, not less frequently than annually, 

19 an entity providing pharmacy benefit management 

20 services on behalf of a group health plan that is not 

21 a covered group health plan shall submit to the plan 

22 sponsor of such group health plan a report in accord23 ance with this paragraph, and make such report 

24 available to the plan sponsor in a machine-readable 

25 format, and such other formats as the Secretary, the 


pbinns on DSKJLVW7X2PROD with $$_JOB
174 

•S 1339 RS

1 Secretary of Labor, and the Secretary of Health and 

2 Human Services may specify. Each such report shall 

3 include, with respect to the applicable group health 

4 plan— 

5 ‘‘(A) the information described in subpara6 graphs (D), (E), (F), and (G) of paragraph (1); 

7 ‘‘(B) as applicable, information collected 

8 from drug manufacturers by such plan on the 

9 total amount of copayment assistance dollars 

10 paid, or copayment cards applied, that were 

11 funded by applicable drug manufacturers with 

12 respect to the participants and beneficiaries in 

13 such plan, except that such information shall not 

14 identify any drug manufacturer; and 

15 ‘‘(C) a summary document that includes 

16 that information described in subparagraphs (A) 

17 and (B) that the Secretary, the Secretary of 

18 Labor, and the Secretary of Health and Human 

19 Services determine useful for plan sponsors for 

20 purposes of selecting pharmacy benefit manage21 ment services, provided that such summary docu22 ments include only aggregate information. 

23 ‘‘(4) PRIVACY REQUIREMENTS.— 

24 ‘‘(A) RELATIONSHIP TO HIPAA REGULA25 TIONS.—Nothing in this section shall be conVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00174 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
175 

•S 1339 RS

1 strued to modify the requirements for the cre2 ation, receipt, maintenance, or transmission of 

3 protected health information under the HIPAA 

4 privacy regulations, as defined in section 

5 1180(b)(3) of the Social Security Act (42 U.S.C. 

6 1320d–9(b)(3)). 

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

8 under paragraph (1) or (3) shall contain only 

9 summary health information, as defined in sec10 tion 164.504(a) of title 45, Code of Federal Regu11 lations (or successor regulations). 

12 ‘‘(C) CLARIFICATION REGARDING CERTAIN

13 DISCLOSURES OF INFORMATION.— 

14 ‘‘(i) REASONABLE RESTRICTIONS.— 

15 Nothing in this section prevents an entity 

16 providing pharmacy benefit management 

17 services on behalf of a group health plan 

18 from placing reasonable restrictions (as the 

19 Secretary, the Secretary of Labor, and the 

20 Secretary of Health and Human Services 

21 may determine) on the public disclosure of 

22 the information contained in a report under 

23 paragraph (1) or (3). 

24 ‘‘(ii) LIMITATIONS.—An entity pro25 viding pharmacy benefit management servVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00175 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
176 

•S 1339 RS

1 ices on behalf of a group health plan may 

2 not restrict disclosure of such reports to the 

3 Department of Health and Human Services, 

4 the Department of Labor, the Department of 

5 the Treasury, or any other Federal agency 

6 responsible 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 United 

10 States in accordance with paragraph (6). 

11 ‘‘(5) USE AND DISCLOSURE BY PLAN SPON12 SORS.— 

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

14 not— 

15 ‘‘(i) fail or refuse to hire, or discharge, 

16 any employee, or otherwise discriminate 

17 against any employee with respect to the 

18 compensation, terms, conditions, or privi19 leges of employment of the employee, because 

20 of information submitted under paragraph 

21 (1) or (3) attributed to the employee or a 

22 dependent of the employee; or 

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

24 employees of the employer in any way that 

25 would deprive or tend to deprive any emVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00176 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
177 

•S 1339 RS

1 ployee of employment opportunities or oth2 erwise adversely affect the status of the em3 ployee as an employee, because of informa4 tion submitted under paragraph (1) or (3) 

5 attributed to the employee or a dependent of 

6 the employee. 

7 ‘‘(B) DISCLOSURE AND REDISCLOSURE.—A 

8 plan sponsor shall not disclose the information 

9 received under paragraph (1) or (3) except— 

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

11 researcher if the research is conducted in 

12 compliance with the regulations and protec13 tions provided for under part 46 of title 45, 

14 Code of Federal Regulations (or successor 

15 regulations); 

16 ‘‘(ii) in response to an order of a court, 

17 except that the plan sponsor may disclose 

18 only the information expressly authorized 

19 by such order; 

20 ‘‘(iii) to the Department of Health and 

21 Human Services, the Department of Labor, 

22 the Department of the Treasury, or other 

23 Federal agency responsible for enforcement 

24 activities under this section; or 


pbinns on DSKJLVW7X2PROD with $$_JOB
178 

•S 1339 RS

1 ‘‘(iv) to a contractor or agent for pur2 poses of health plan administration, if such 

3 contractor or agent agrees, in writing, and 

4 as a term of the contract, to abide by the 

5 same use and disclosure restrictions as the 

6 plan sponsor. 

7 ‘‘(C) RELATIONSHIP TO HIPAA REGULA8 TIONS.—With respect to the HIPAA privacy reg9 ulations, as defined in section 1180(b)(3) of the 

10 Social Security Act (42 U.S.C. 1320d–9(b)(3)), 

11 subparagraph (B) does not prohibit a covered en12 tity (as defined for purposes of such regulations 

13 promulgated under section 264 of the Health In14 surance Portability and Accountability Act of 

15 1996 (42 U.S.C. 1320d–2)) from any use or dis16 closure of health information that is authorized 

17 for the covered entity under such regulations. 

18 The previous sentence does not affect the author19 ity of such Secretary to modify such regulations. 

20 ‘‘(D) WRITTEN NOTICE.—Plan sponsors of 

21 group health plans shall provide to each em22 ployee written notice informing the employee of 

23 the requirement for entities providing pharmacy 

24 benefit management services to submit reports to 

25 plan sponsors under paragraphs (1) and (3), as 


pbinns on DSKJLVW7X2PROD with $$_JOB
179 

•S 1339 RS

1 applicable, which may include incorporating 

2 such notification in plan documents provided to 

3 the employee, an employee handbook provided to 

4 the employee, or individual notification. 

5 ‘‘(E) ENFORCEMENT.— 

6 ‘‘(i) IN GENERAL.—The powers, proce7 dures, and remedies provided in section 207 

8 of the Genetic Information Nondiscrimina9 tion Act (42 U.S.C. 2000ff–6) to a person 

10 alleging a violation of title II of such Act 

11 shall be the powers, procedures, and rem12 edies this subparagraph provides for any 

13 person alleging a violation of this para14 graph. 

15 ‘‘(ii) PROHIBITION AGAINST RETALIA16 TION.—No person shall discriminate 

17 against any individual because such indi18 vidual has opposed any act or practice 

19 made unlawful by this paragraph or be20 cause such individual made a charge, testi21 fied, assisted, or participated in any man22 ner in an investigation, proceeding, or hear23 ing under this paragraph. The remedies and 

24 procedures otherwise provided for under this 

25 subparagraph shall be available to aggrieved 


pbinns on DSKJLVW7X2PROD with $$_JOB
180 

•S 1339 RS

1 individuals with respect to violations of this 

2 clause. 

3 ‘‘(6) SUBMISSIONS TO GAO.—An entity pro4 viding pharmacy benefit management services on be5 half of a group health plan shall submit, upon re6 quest, to the Comptroller General of the United States 

7 each of the first 2 reports submitted to a plan sponsor 

8 under paragraph (1) or (3) with respect to such plan, 

9 and other such reports as requested, in accordance 

10 with the privacy requirements under paragraph (4), 

11 and such other information that the Comptroller Gen12 eral determines necessary to carry out the study 

13 under section 2(f) of the Pharmacy Benefit Manager 

14 Reform Act. 

15 ‘‘(7) STANDARD FORMATS.— 

16 ‘‘(A) IN GENERAL.—Not later than June 1, 

17 2024, the Secretary, the Secretary of Health and 

18 Human Services, and the Secretary of Labor 

19 shall specify, through rulemaking, standard for20 mats for entities providing pharmacy benefit 

21 management services to submit reports required 

22 under this subsection. Such secretaries may pro23 vide for separate standard formats for reports to 

24 plan sponsors of group health plans and reports 

25 to plan sponsors of group health insurance covVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00180 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
181 

•S 1339 RS

1 erage offered in connection with a group health 

2 plan. 

3 ‘‘(B) FORM.—The Secretary, the Secretary 

4 of Health and Human Services, and the Sec5 retary of Labor shall define through rulemaking 

6 a form of the reports under paragraphs (1) and 

7 (3) required to be submitted to plan sponsors 

8 who also are drug manufacturers, drug whole9 salers, entities providing pharmacy benefit man10 agement services, or other direct participants in 

11 the drug supply chain, in the case that such sec12 retaries determine that changes to the standard 

13 format are necessary to prevent anticompetitive 

14 behavior. 

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

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

17 or after the date that is 30 months after the date of 

18 enactment of the Pharmacy Benefit Manager Reform 

19 Act, a group health plan shall ensure that the amount 

20 required to be paid by a participant or beneficiary 

21 for a prescription drug covered under the plan, and 

22 a third-party administrator or an entity providing 

23 pharmacy benefit management services on behalf of 

24 such a plan shall ensure that the total amount re25 quired to be paid by the plan and participant or benVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00181 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
182 

•S 1339 RS

1 eficiary for a prescription drug covered under the 

2 plan, does not exceed the price paid to the pharmacy, 

3 excluding penalties paid by the pharmacy (as de4 scribed in paragraph (2)) to such plan or entity. 

5 ‘‘(2) RULE OF CONSTRUCTION.—For purposes of 

6 paragraph (1), penalties paid by pharmacies include 

7 only the following: 

8 ‘‘(A) A penalty paid if an original claim 

9 for a prescription drug was submitted fraudu10 lently by the pharmacy to the plan or entity. 

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

12 payment made by the plan or entity to the phar13 macy was inconsistent with the reimbursement 

14 terms in any contract between the pharmacy and 

15 the plan or entity. 

16 ‘‘(C) A penalty paid if the pharmacist serv17 ices for which a claim was filed with the plan 

18 or entity were not rendered by the pharmacy. 

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

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

21 or after the date that is 30 months after the date of 

22 enactment of the Pharmacy Benefit Manager Reform 

23 Act, a third-party administrator of a group health 

24 plan or an entity providing pharmacy benefit manVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00182 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
183 

•S 1339 RS

1 agement services on behalf of a group health plan 

2 shall— 

3 ‘‘(A) remit 100 percent of rebates, fees, al4 ternative discounts, and other remuneration re5 ceived from any applicable entity that are re6 lated to utilization of drugs under such plan, to 

7 the group health plan; and 

8 ‘‘(B) ensure that any contract entered into, 

9 by such third-party administrator or entity pro10 viding pharmacy benefit management services on 

11 behalf of such a plan, with rebate aggregators (or 

12 other purchasing entity designed to aggregate re13 bates), applicable group purchasing organiza14 tions, or any subsidiary, parent, affiliate, or 

15 subcontractor of the plan, entity, rebate 

16 aggregator (or other purchasing entity designed 

17 to aggregate rebates), or applicable group pur18 chasing organization remit 100 percent of re19 bates, fees, alternative discounts, and other remu20 neration received that are related to utilization 

21 of drugs under such plan, to the third-party ad22 ministrator or entity providing pharmacy ben23 efit management services. 


pbinns on DSKJLVW7X2PROD with $$_JOB
184 

•S 1339 RS

1 ‘‘(2) FORM AND MANNER OF REMITTANCE.—With 

2 respect to such rebates, fees, alternative discounts, and 

3 other remuneration— 

4 ‘‘(A) the rebates, fees, alternative discounts, 

5 and other remuneration under paragraph (1)(A) 

6 shall be— 

7 ‘‘(i) remitted— 

8 ‘‘(I) on a quarterly basis, to the 

9 group health plan, not later than 90 

10 days after the end of each quarter; or 

11 ‘‘(II) in the case of an under12 payment in a remittance for a prior 

13 quarter, as soon as practicable, but not 

14 later than 90 days after notice of the 

15 underpayment is first given; 

16 ‘‘(ii) fully disclosed and enumerated to 

17 the group health plan, as described in para18 graphs (1) and (3) of subsection (b); and 

19 ‘‘(iii) returned to the entity providing 

20 pharmacy benefit management services on 

21 behalf of the group health plan if an audit 

22 by a plan sponsor, or a third party des23 ignated by a plan sponsor, indicates that 

24 the amounts received are incorrect after 


pbinns on DSKJLVW7X2PROD with $$_JOB
185 

•S 1339 RS

1 such amounts have been paid to the group 

2 health plan; 

3 ‘‘(B) the rebates, fees, alternative discounts, 

4 and other remuneration under paragraph (1)(B) 

5 shall be remitted in accordance with such proce6 dures as the Secretary, Secretary of Health and 

7 Human Services, and Secretary of Labor estab8 lish; and 

9 ‘‘(C) the records of such rebates, fees, alter10 native discounts, and other remuneration shall 

11 be available for audit by the plan sponsor, or a 

12 third party designated by a plan sponsor, not 

13 less than once per plan year. 

14 ‘‘(3) AUDIT OF REBATE CONTRACTS.—A third15 party administrator of a group health plan or an en16 tity providing pharmacy benefit management services 

17 on behalf of such group health plan shall make rebate 

18 contracts with rebate aggregators or drug manufac19 turers available for audit by the plan sponsor or des20 ignated third party, subject to reasonable restrictions 

21 (as determined by the Secretary, the Secretary of 

22 Labor, and the Secretary of Health and Human Serv23 ices) on confidentiality to prevent re-disclosure of 

24 such contracts. 


pbinns on DSKJLVW7X2PROD with $$_JOB
186 

•S 1339 RS

1 ‘‘(4) AUDITORS.—Audits carried out under para2 graphs (2)(C) and (3) shall be performed by an audi3 tor selected by the applicable plan sponsor. 

4 ‘‘(5) RULE OF CONSTRUCTION.—Nothing in this 

5 subsection shall be construed to— 

6 ‘‘(A) prohibit payments to entities offering 

7 pharmacy benefit management services for bona 

8 fide services using a fee structure not described 

9 in this subsection, provided that such fees are 

10 transparent to group health plans; 

11 ‘‘(B) require a third-party administrator of 

12 a group health plan or an entity providing 

13 pharmacy benefit management services on behalf 

14 of a group health plan to remit bona fide service 

15 fees to plan sponsors of the group health plan; or 

16 ‘‘(C) limit the ability of a group health 

17 plan to pass through rebates, fees, alternative 

18 discounts, and other remuneration to the partici19 pant or beneficiary. 

20 ‘‘(e) ENFORCEMENT.— 

21 ‘‘(1) IN GENERAL.—The Secretary shall enforce 

22 this section. 

23 ‘‘(2) VIOLATIONS.—A group health plan or an 

24 entity providing pharmacy benefit management serv25 ices that violates subsection (a); an entity providing 


pbinns on DSKJLVW7X2PROD with $$_JOB
187 

•S 1339 RS

1 pharmacy benefit management services that fails to 

2 provide information required under subsection (b); a 

3 group health plan or entity providing pharmacy ben4 efit management services that violates subsection (c); 

5 or a third-party administrator of a group health plan 

6 or an entity providing pharmacy benefit management 

7 services that violates subsection (d) shall be subject to 

8 a civil monetary penalty in the amount of $10,000 

9 for each day during which such violation continues or 

10 such information is not disclosed or reported. 

11 ‘‘(3) FALSE INFORMATION.—A group health 

12 plan, an entity providing pharmacy benefit manage13 ment services, or a third-party administrator that 

14 knowingly provides false information under this sec15 tion shall be subject to a civil money penalty in an 

16 amount not to exceed $100,000 for each item of false 

17 information. Such civil money penalty shall be in ad18 dition to other penalties as may be prescribed by law. 

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

20 1128A of the Social Security Act, other than sub21 section (a) and (b) and the first sentence of subsection 

22 (c)(1) of such section shall apply to civil monetary 

23 penalties under this subsection in the same manner as 

24 such provisions apply to a penalty or proceeding 

25 under section 1128A of the Social Security Act. 


pbinns on DSKJLVW7X2PROD with $$_JOB
188 

•S 1339 RS

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 has 

5 made a good-faith effort to comply with this section. 

6 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec7 tion shall be construed to permit a group health plan, entity 

8 providing pharmacy benefit management services on behalf 

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

10 to, or otherwise limit the access of, the Secretary of the 

11 Treasury to a report described in subsection (b)(1) or infor12 mation related to compliance with subsections (a), (b), (c), 

13 or (d) by such plan or entity. 

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

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

16 ‘‘(A) an applicable group purchasing orga17 nization, drug manufacturer, distributor, whole18 saler, rebate aggregator (or other purchasing en19 tity designed to aggregate rebates), 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 a 


pbinns on DSKJLVW7X2PROD with $$_JOB
189 

•S 1339 RS

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

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

4 Secretary of Health and Human Services, and 

5 the Secretary of Labor may specify through rule6 making; 

7 ‘‘(2) the term ‘applicable group purchasing orga8 nization’ means a group purchasing organization 

9 that is affiliated with or under common ownership 

10 with an entity providing pharmacy benefit manage11 ment services; 

12 ‘‘(3) the term ‘covered group health plan’ means 

13 a group health plan maintained by a large employer; 

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

15 prescription drug benefits under a group health plan, 

16 means the amount spent by a group health plan on 

17 prescription drug benefits, calculated before the appli18 cation of rebates, fees, alternative discounts, or other 

19 remuneration; 

20 ‘‘(5) the term ‘large employer’ means, in connec21 tion with a group health plan with respect to a cal22 endar year and a plan year, an employer who em23 ployed an average of at least 50 employees on busi24 ness days during the preceding calendar year and 


pbinns on DSKJLVW7X2PROD with $$_JOB
190 

•S 1339 RS

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 pre4 scription drug benefits under a group health plan, 

5 means the amount spent by a group health plan on 

6 prescription drug benefits, calculated after the appli7 cation of rebates, fees, alternative discounts, or other 

8 remuneration; 

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

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

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

12 1002(16)(B)); 

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

14 given such term by the Secretary, the Secretary of 

15 Labor, and the Secretary of Health and Human Serv16 ices, through rulemaking, which shall be reevaluated 

17 by such secretaries every 5 years; and 

18 ‘‘(9) the term ‘wholesale acquisition cost’ has the 

19 meaning given such term in section 1847A(c)(6)(B) of 

20 the Social Security Act (42 U.S.C. 1395w– 

21 3a(c)(6)(B)).’’. 

22 (2) CLERICAL AMENDMENT.—The table of sec23 tions for subchapter B of chapter 100 of the Internal 

24 Revenue Code of 1986 is amended by adding at the 

25 end the following new item: 


pbinns on DSKJLVW7X2PROD with $$_JOB
191 

•S 1339 RS

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

1 (3) ADDITIONAL REPORTING REQUIREMENT.— 

2 Section 9825 of the Internal Revenue Code of 1986 is 

3 amended by adding at the end the following: 

4 ‘‘(d) ENTITIES PROVIDING PHARMACY BENEFIT MAN5 AGEMENT SERVICES.—Beginning 2 years after the date of 

6 enactment of the Pharmacy Benefit Manager Reform Act, 

7 entities providing pharmacy benefit management services 

8 shall report to plan sponsors of group health plans informa9 tion required under paragraphs (4), (5), (6), (7)(A)(iii), 

10 and (7)(B) of subsection (a).’’. 

11 (d) FUNDING.— 

12 (1) For purposes of carrying out the amendments 

13 made by subsection (a) there is appropriated to the 

14 Centers for Medicare & Medicaid Services, out of 

15 amounts in the Treasury not otherwise appropriated, 

16 $40,000,000 for fiscal year 2023, to remain available 

17 until expended. 

18 (2) For purposes of carrying out the amendments 

19 made by subsection (b), there is appropriated to the 

20 Department of Labor, out of amounts in the Treasury 

21 not otherwise appropriated, $4,500,000 for fiscal year 

22 2023, to remain available until expended. 

23 (e) ASPE STUDY.—The Assistant Secretary for Plan24 ning and Evaluation of the Department of Health and 


pbinns on DSKJLVW7X2PROD with $$_JOB
192 

•S 1339 RS

1 Human Services shall conduct or commission a study on 

2 how the United States health care market would be im3 pacted by potential regulatory changes disallowing manu4 facturer rebates in the manner and to the extent allowed 

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

6 impact to stakeholders in the commercial insurance market, 

7 and, not later than 1 year after the date of enactment of 

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

9 study. Such study and report shall consider the following: 

10 (1) The impact of making no such regulatory 

11 changes, as well as potential behavioral changes by 

12 plan sponsors, members, and pharmaceutical manu13 facturers, such as tighter formularies, changes to price 

14 concessions, or changes in utilization, if such regu15 latory changes are made. 

16 (2) The mechanics needed in the pharmaceutical 

17 supply chain (whether existing or not) to move a 

18 manufacturer rebate to the point of sale. 

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

20 manufacturer rebate versus a full point-of-sale manu21 facturer rebate. 

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

23 premiums, and other cost-sharing. 

24 (5) Possible behavioral changes by other third 

25 parties in the pharmaceutical supply chain including 


pbinns on DSKJLVW7X2PROD with $$_JOB
193 

•S 1339 RS

1 drug manufacturers, distributors, wholesalers, rebate 

2 aggregators, pharmacy services administrative orga3 nizations, or group purchasing organizations. 

4 (6) Behavioral changes between entities that con5 tract with pharmaceutical manufacturers and entities 

6 that participate in the pharmaceutical supply chain. 

7 (7) Alternative price negotiation mechanisms, 

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

9 (commonly known as the ‘‘Robinson–Patman Act’’; 49 

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

11 the amendments made by that Act, on drug pricing 

12 negotiations. 

13 (8) The impact on pharmacies, including phar14 macy rebates, pharmacy fees, and dispensing chan15 nels. 

16 (9) The impact of manufacturer rebates on get17 ting insulin products to market, and the market dy18 namics and extent to which biosimilar biological 

19 product development and competition could increase, 

20 or is increasing, the number of biological products ap21 proved and available to patients, including by exam22 ining barriers to— 

23 (A) placement of biosimilar biological prod24 ucts on health insurance formularies; 


pbinns on DSKJLVW7X2PROD with $$_JOB
194 

•S 1339 RS

1 (B) market entry of insulin products in the 

2 United States, as compared to other highly devel3 oped nations; and 

4 (C) patient and provider education around 

5 biosimilar biological products. 

6 (f) GAO STUDY.— 

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

8 2029, the Comptroller General of the United States 

9 shall report to Congress on— 

10 (A) pharmacy networks of a selection of 

11 group health plans, health insurance issuers, and 

12 entities providing pharmacy benefit management 

13 services on behalf of such group health plan or 

14 group or individual health insurance coverage, 

15 including networks that have pharmacies that 

16 are affiliated with or in common ownership with 

17 group health plans, health insurance issuers, or 

18 entities providing pharmacy benefit management 

19 services or pharmacy benefit administrative serv20 ices under group health plan or group or indi21 vidual health insurance coverage; 

22 (B) as it relates to pharmacy networks that 

23 include pharmacies affiliated with or in common 

24 ownership with plans, issuers, or entities, as de25 scribed in subparagraph (A)— 


pbinns on DSKJLVW7X2PROD with $$_JOB
195 

•S 1339 RS

1 (i) whether such networks are designed 

2 to encourage participants and beneficiaries 

3 of a plan or coverage to use such phar4 macies over other network pharmacies for 

5 specific services or drugs, and if so, the rea6 sons the networks give for encouraging use 

7 of such pharmacies; and 

8 (ii) whether such pharmacies are used 

9 by participants and beneficiaries dispropor10 tionately more in the aggregate or for spe11 cific drugs compared to other network phar12 macies; 

13 (C) whether group health plans and health 

14 insurance issuers offering group health insurance 

15 coverage have options to elect different network 

16 pricing arrangements in the marketplace with 

17 entities that provide pharmacy benefit manage18 ment services, and the prevalence of electing such 

19 different network pricing arrangements among a 

20 selection of such plans and issuers; 

21 (D) pharmacy network design parameters 

22 that encourage participants and beneficiaries in 

23 the plan or coverage to fill prescriptions at mail 

24 order, specialty, or retail pharmacies that are 


pbinns on DSKJLVW7X2PROD with $$_JOB
196 

•S 1339 RS

1 wholly or partially owned by that issuer or enti2 ty; and 

3 (E) for a selection of plans and issuers, the 

4 degree to which mail order, specialty, or retail 

5 pharmacies that dispense prescription drugs to 

6 participants and beneficiaries in a group health 

7 plan or group health insurance coverage that are 

8 affiliated with or in common ownership with 

9 group health plans, health insurance issuers, or 

10 entities providing pharmacy benefit management 

11 services or pharmacy benefit administrative serv12 ices under a group health plan or group health 

13 insurance coverage receive reimbursement that is 

14 greater than the median price charged to the 

15 group health plan or health insurance issuer 

16 when the same drug is dispensed to participants 

17 and beneficiaries in the plan or coverage by 

18 other pharmacies included in the pharmacy net19 work of that plan or issuer that are not affiliated 

20 with or in common ownership with the health 

21 insurance issuer or entity providing pharmacy 

22 benefit management services. 

23 (2) REQUIREMENT.—In carrying out paragraph 

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

25 shall not disclose— 


pbinns on DSKJLVW7X2PROD with $$_JOB
197 

•S 1339 RS

1 (A) information that would allow for iden2 tification of a specific individual, plan sponsor, 

3 health insurance issuer, group health plan, or 

4 entity providing pharmacy benefit management 

5 services; or 

6 (B) commercial or financial information 

7 that is privileged or confidential. 

8 (3) DEFINITIONS.—In this subsection, the terms 

9 ‘‘group health plan’’, ‘‘health insurance coverage’’, 

10 and ‘‘health insurance issuer’’ have the meanings 

11 given such terms in section 2791 of the Public Health 

12 Service Act (42 U.S.C. 300gg–91). 

13 SEC. 3. REPORTING ON JUSTIFICATION FOR DRUG PRICE 

14 INCREASES. 

15 Title III of the Public Health Service Act (42 U.S.C. 

16 241 et seq.) is amended by adding at the end the following: 

17 ‘‘PART W—DRUG PRICE REPORTING; DRUG VALUE 

18 FUND 

19 ‘‘SEC. 399OO. REPORTING ON JUSTIFICATION FOR DRUG 

20 PRICE INCREASES. 

21 ‘‘(a) DEFINITIONS.—In this section: 

22 ‘‘(1) MANUFACTURER.—The term ‘manufacturer’ 

23 means the person— 

24 ‘‘(A) that holds the application for a drug 

25 approved under section 505 of the Federal Food, 


pbinns on DSKJLVW7X2PROD with $$_JOB
198 

•S 1339 RS

1 Drug, and Cosmetic Act or the license issued 

2 under section 351 of this Act; or 

3 ‘‘(B) who is engaged in manufacturing, pre4 paring, propagating, compounding, processing, 

5 packaging, repackaging, or labeling of a pre6 scription drug. 

7 ‘‘(2) QUALIFYING DRUG.—The term ‘qualifying 

8 drug’ means any drug that is approved under sub9 section (c) or (j) of section 505 of the Federal Food, 

10 Drug, and Cosmetic Act or licensed under subsection 

11 (a) or (k) of section 351 of this Act— 

12 ‘‘(A) that has a wholesale acquisition cost of 

13 $100 or more per month supply, or per a course 

14 of treatment that lasts less than a month, and 

15 is— 

16 ‘‘(i) subject to section 503(b)(1) of the 

17 Federal Food, Drug, and Cosmetic Act; 

18 ‘‘(ii) not a vaccine; and 

19 ‘‘(iii) not an antibiotic; and 

20 ‘‘(B) for which, during the previous cal21 endar year, at least 1 dollar of the total amount 

22 of sales was for individuals enrolled under the 

23 Medicare program under title XVIII of the So24 cial Security Act (42 U.S.C. 1395 et seq.) or 

25 under a State Medicaid plan under title XIX of 


pbinns on DSKJLVW7X2PROD with $$_JOB
199 

•S 1339 RS

1 such Act (42 U.S.C. 1396 et seq.) or under a 

2 waiver of such plan. 

3 ‘‘(3) WHOLESALE ACQUISITION COST.—The term 

4 ‘wholesale acquisition cost’ has the meaning given 

5 that term in section 1847A(c)(6)(B) of the Social Se6 curity Act (42 U.S.C. 1395w–3a(c)(6)(B)). 

7 ‘‘(b) REPORT.— 

8 ‘‘(1) REPORT REQUIRED.—The manufacturer of 

9 a qualifying drug shall submit a report to the Sec10 retary for each planned increase in price of a quali11 fying drug that will result in an increase in the 

12 wholesale acquisition cost of that drug that is equal 

13 to— 

14 ‘‘(A) 10 percent or more over a 12-month 

15 period; or 

16 ‘‘(B) 25 percent or more over a 36-month 

17 period. 

18 ‘‘(2) REPORT DEADLINE.—Each report described 

19 in paragraph (1) shall be submitted to the Secretary 

20 not later than 30 days prior to the effective date of 

21 such planned increase in price. 

22 ‘‘(c) CONTENTS.—A report under subsection (b) shall, 

23 at a minimum, include— 

24 ‘‘(1) with respect to the qualifying drug— 


pbinns on DSKJLVW7X2PROD with $$_JOB
200 

•S 1339 RS

1 ‘‘(A) the percentage by which the manufac2 turer will raise the wholesale acquisition cost of 

3 the drug on the planned effective date of such 

4 planned increase in price; 

5 ‘‘(B) a justification for, and description of, 

6 each manufacturer’s planned increase in price 

7 that will occur during the 12-month period de8 scribed in subsection (b)(1)(A) or the 36-month 

9 period described in subsection (b)(1)(B), as ap10 plicable, that shall be accompanied by informa11 tion to substantiate the basis for the justification 

12 and a certification that, to the manufacturer’s 

13 knowledge and belief, the justification is truthful 

14 and nonmisleading and does not describe uses of 

15 the drug beyond those listed as an indication or 

16 use in its approved labeling; 

17 ‘‘(C) the identity of the initial developer of 

18 the drug, if applicable; 

19 ‘‘(D) a description of the history of the 

20 manufacturer’s price increases for the drug since 

21 the approval of the application for the drug 

22 under section 505 of the Federal Food, Drug, 

23 and Cosmetic Act or the issuance of the license 

24 for the drug under section 351, or since the manVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00200 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
201 

•S 1339 RS

1 ufacturer acquired such approved application or 

2 license, as applicable; 

3 ‘‘(E) the current wholesale acquisition cost 

4 of the drug; 

5 ‘‘(F) the total expenditures of the manufac6 turer for the 3 years preceding the planned in7 crease in price on— 

8 ‘‘(i) materials and manufacturing for 

9 such drug; and 

10 ‘‘(ii) acquiring patents and licensing 

11 for such drug; 

12 ‘‘(G) the percentage of total expenditures of 

13 the manufacturer on research and development 

14 for such drug that was derived from Federal 

15 funds; 

16 ‘‘(H) the total expenditures of the manufac17 turer on research and development, for the 3 

18 years preceding the planned increase in price for 

19 such drug, that is necessary to demonstrate that 

20 it meets applicable standards for approval under 

21 section 505 of the Federal Food, Drug, and Cos22 metic Act or licensure under such section 351, as 

23 applicable; 

24 ‘‘(I) the total expenditures of the manufac25 turer on research and development for such drug 


pbinns on DSKJLVW7X2PROD with $$_JOB
202 

•S 1339 RS

1 that is pursuing new or expanded indications for 

2 such drug through supplemental applications 

3 under section 505(b) of the Federal Food, Drug, 

4 and Cosmetic Act or section 351(a) of this Act; 

5 ‘‘(J) the total expenditures of the manufac6 turer on research and development for such drug 

7 that is carrying out postmarket requirements re8 lated to such drug, including those under section 

9 505(o)(3) of the Federal Food, Drug, and Cos10 metic Act; 

11 ‘‘(K) the total revenue and the net profit 

12 generated from the qualifying drug for each cal13 endar year since the approval of the application 

14 for the drug under section 505 of the Federal 

15 Food, Drug, and Cosmetic Act or the issuance of 

16 the license for the drug under section 351, or 

17 since the manufacturer acquired such approved 

18 application or license; and 

19 ‘‘(L) the total costs associated with mar20 keting and advertising for the qualifying drug; 

21 ‘‘(2) with respect to the manufacturer— 

22 ‘‘(A) the total revenue and the net profit of 

23 the manufacturer— 

24 ‘‘(i) for the 12-month period preceding 

25 the date of the report, in the case of a report 


pbinns on DSKJLVW7X2PROD with $$_JOB
203 

•S 1339 RS

1 based on an increase described in subsection 

2 (b)(1)(A); 

3 ‘‘(ii) for the 36-month period preceding 

4 the date of the report, in the case of a report 

5 based on an increase described in subsection 

6 (b)(1)(B); 

7 ‘‘(B) all stock-based performance metrics 

8 used by the manufacturer to determine executive 

9 compensation— 

10 ‘‘(i) for the 12-month period preceding 

11 the date of the report, in the case of a report 

12 based on an increase described in subsection 

13 (b)(1)(A); or 

14 ‘‘(ii) for the 36-month period preceding 

15 the date of the report, in the case of a report 

16 based on an increase described in subsection 

17 (b)(1)(B); and 

18 ‘‘(C) any additional information the manu19 facturer chooses to provide related to drug pric20 ing decisions, such as total expenditures on— 

21 ‘‘(i) drug research and development; or 

22 ‘‘(ii) clinical trials on drugs, conducted 

23 with the intent of using the data to support 

24 approval of an application under section 

25 505(b) of the Federal Food, Drug, and CosVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00203 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
204 

•S 1339 RS

1 metic Act or section 351(a), but for which 

2 such application was not submitted or filed, 

3 or failed to receive approval by the Food 

4 and Drug Administration; and 

5 ‘‘(3) such other related information as the Sec6 retary considers appropriate, as specified through no7 tice and comment rulemaking. 

8 ‘‘(d) CIVIL MONEY PENALTY.—Any manufacturer of a 

9 qualifying drug that fails to submit a report for the drug 

10 as required by this section, or knowingly provides false in11 formation, shall be subject to a civil money penalty of 

12 $100,000 for each day on which the violation continues. 

13 ‘‘(e) PUBLIC POSTING.— 

14 ‘‘(1) IN GENERAL.—Subject to paragraph (3), 

15 not later than 30 days after the submission of a re16 port under subsection (b), the Secretary shall post the 

17 report on the public website of the Department of 

18 Health and Human Services, accompanied by lan19 guage indicating that such public posting does not 

20 represent an endorsement or validation of the report’s 

21 content by the Secretary. 

22 ‘‘(2) FORMAT.—In developing the format of such 

23 report for public posting, the Secretary shall consult 

24 stakeholders, including beneficiary groups, and shall 

25 seek feedback on the content and format from conVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00204 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
205 

•S 1339 RS

1 sumer advocates and readability experts to ensure 

2 such public reports are user-friendly to the public and 

3 are written in plain language that consumers can 

4 readily understand. 

5 ‘‘(3) TRADE SECRETS AND CONFIDENTIAL INFOR6 MATION.—This section does not authorize the disclo7 sure of confidential commercial information or trade 

8 secrets.’’. 

9 ‘‘SEC. 399OO–1. USE OF CIVIL PENALTY AMOUNTS. 

10 ‘‘The Secretary shall, without further appropriation, 

11 collect civil penalties under section 399OO and use the 

12 funds derived from such civil penalties, in addition to any 

13 other amounts available to the Secretary, to carry out ac14 tivities described in this part and to improve consumer and 

15 provider information about drug value and drug price 

16 transparency. 

17 ‘‘SEC. 399OO–2. ANNUAL REPORT TO CONGRESS. 

18 ‘‘(a) IN GENERAL.—Subject to subsection (b), the Sec19 retary shall submit to Congress, and post on the public 

20 website of the Department of Health and Human Services 

21 in a way that is easy to find, use, and understand, an an22 nual report— 

23 ‘‘(1) summarizing the information reported pur24 suant to section 399OO; and 


pbinns on DSKJLVW7X2PROD with $$_JOB
206 

•S 1339 RS

1 ‘‘(2) including copies of the reports and sup2 porting detailed economic analyses submitted pursu3 ant to section 399OO. 

4 ‘‘(b) TRADE SECRETS AND CONFIDENTIAL INFORMA5 TION.— This section does not authorize the disclosure of 

6 confidential commercial information or trade secrets.’’. 

7 SEC. 4. STUDY ON FIDUCIARY DUTIES OF PHARMACY BEN8 EFIT MANAGERS. 

9 (a) IN GENERAL.—The Secretary of Labor shall con10 duct, and submit to Congress a report describing the results 

11 of, a study on the impacts of a change in policy described 

12 in subsection (b). 

13 (b) POLICY DESCRIBED.—Under a policy referred to 

14 in subsection (a)— 

15 (1) an entity providing pharmacy benefit man16 agement services would be considered a fiduciary 

17 within the meaning of section 3(21) of the Employee 

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

19 1002(21)) with respect to a group health plan or 

20 group health insurance coverage; and 

21 (2) such an entity would— 

22 (A) be subject to the responsibilities, obliga23 tions, and duties imposed on fiduciaries under 

24 part 4 of subtitle B of title I of such Act (29 

25 U.S.C. 1101 et seq.); and 


pbinns on DSKJLVW7X2PROD with $$_JOB
207 

•S 1339 RS

1 (B) make the required fiduciary disclosure 

2 under section 408(b)(2)(B)(iii) of such Act (29 

3 U.S.C. 1108(b)(2)(B)(iii)) with respect to the 

4 pharmacy benefit management services provided 

5 to the plan or coverage. 

6 (c) DEFINITION OF PHARMACY BENEFIT MANAGEMENT

7 SERVICES.—In this section, the term ‘‘pharmacy benefit 

8 management services’’ means services related to— 

9 (1) negotiating prices with respect to prescrip10 tion drugs on behalf of a group health plan or health 

11 insurance issuer offering group health insurance cov12 erage; and 

13 (2) managing the prescription drug benefits pro14 vided by such plan or coverage, including designing 

15 and implementing a drug formulary, the processing 

16 and payment of claims for prescription drugs, the 

17 performance of drug utilization review, the processing 

18 of drug prior authorization requests, the adjudication 

19 of appeals or grievances related to the prescription 

20 drug benefit, contracting with network pharmacies, 

21 controlling the cost of covered prescription drugs, or 

22 the provision of related services. 


pbinns on DSKJLVW7X2PROD with $$_JOB
208 

•S 1339 RS

1 SEC. 5. CLARIFICATION OF REQUIREMENT TO DISCLOSE DI2 RECT AND INDIRECT COMPENSATION FOR 

3 BROKERS AND CONSULTANTS TO EMPLOYER4 SPONSORED HEALTH PLANS. 

5 (a) IN GENERAL.—Section 408(b)(2)(B)(ii)(I)(bb) of 

6 the Employee Retirement Income Security Act of 1974 (29 

7 U.S.C. 1108(b)(2)(B)(ii)(I)(bb)) is amended by adding at 

8 the end the following: 

9 ‘‘(CC) Pharmacy benefit management services 

10 provided by pharmacy benefit managers or other serv11 ice providers and related services provided by third12 party administrators (or other entities providing such 

13 services) for which the covered service provider, an af14 filiate, or a subcontractor reasonably expects to re15 ceive indirect compensation or direct compensation 

16 described in item (dd).’’. 

17 (b) REGULATIONS.—Not later than 18 months after the 

18 date of enactment of this Act, the Secretary of Labor shall 

19 promulgate regulations, through notice and comment rule20 making, clarifying the requirements of section 408(b)(2)(B) 

21 of the Employee Retirement Income Security Act of 1974 

22 (29 U.S.C. 1108(b)(2)(B)) with respect to covered service 

23 providers providing services described in subitem (CC) of 

24 subclause (I)(bb) of such section, as amended by subsection 

25 (a). Such regulations shall apply with respect to any plan 


pbinns on DSKJLVW7X2PROD with $$_JOB
209 

•S 1339 RS

1 year that begins on or after the date that is 6 months after 

2 such regulations are promulgated. 

3 (c) SENSE OF CONGRESS.—It is the sense of Congress 

4 that the amendment made by subsection (a) clarifies the 

5 existing requirement of covered service providers with re6 spect to services described in section 

7 408(b)(2)(B)(ii)(I)(bb)(BB) of the Employee Retirement In8 come Security Act of 1974 (29 U.S.C. 

9 1108(b)(2)(B)(ii)(I)(bb)(BB)) that were in effect since the 

10 application date described in section 202(e) of the No Sur11 prises Act (Public Law 116–260; 29 U.S.C. 1108 note), and 

12 does not impose any additional requirement under section 

13 408(b)(2)(B) of such Act. 

14 SEC. 6. STUDY ON NALOXONE ACCESS. 

15 (a) IN GENERAL.—The Comptroller General of the 

16 United States shall conduct a study on actions that may 

17 be taken to ensure appropriate access and affordability of 

18 naloxone for individuals seeking to purchase naloxone. Such 

19 study shall address what is known about— 

20 (1) coverage of naloxone (in any available form), 

21 including whether naloxone can be covered as an over22 the-counter drug under a group health plan or group 

23 or individual health insurance coverage (as such 

24 terms are defined in section 2791 of the Public Health 

25 Service Act (42 U.S.C. 300gg–91)); 


pbinns on DSKJLVW7X2PROD with $$_JOB
210 

•S 1339 RS

1 (2) the out-of-pocket cost to consumers pur2 chasing naloxone— 

3 (A) with a prescription, with and without 

4 coverage under any such plan or coverage; and 

5 (B) over the counter, with and without cov6 erage under any such plan or coverage; and 

7 (3) other factors impacting coverage, including 

8 barriers in covering naloxone as an over-the-counter 

9 drug, the relative net costs of naloxone when pur10 chased over the counter without insurance coverage 

11 compared to when purchased with a prescription and 

12 covered under a group health plan or health insur13 ance coverage, and the availability of naloxone pur14 chased and distributed through public health entities. 

15 (b) REPORT.—Not later than 2 years after the date 

16 of the enactment of this Act, the Comptroller General of the 

17 United States shall submit to Congress a report that con18 tains the findings of the study conducted under subsection 

19 (a). 

20 SEC. 7. PROHIBITION ON BLOCKING CONSUMER DECISION21 SUPPORT TOOLS. 

22 (a) PHSA.—Part D of title XXVII of the Public 

23 Health Service Act (42 U.S.C. 300gg–111 et seq.), as 

24 amended by section 2, is further amended by adding at the 

25 end the following: 


pbinns on DSKJLVW7X2PROD with $$_JOB
211 

•S 1339 RS

1 ‘‘SEC. 2799A–12. PROHIBITION ON BLOCKING CONSUMER 

2 DECISION-SUPPORT TOOLS. 

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

4 insurance issuer offering group or individual health insur5 ance coverage shall not enter into a contract with an entity 

6 that provides pharmacy benefit management services with 

7 respect to such plan or coverage if such contract includes 

8 any terms, conditions, or costs that would prevent or re9 strict a covered third party from accessing or using infor10 mation, for purposes of the consumer decision-support tool, 

11 relevant to the operability, implementation, and utilization 

12 of the consumer-decision support tool regarding prescrip13 tion drug benefits under the plan or coverage that are ad14 ministered by the entity providing pharmacy benefit man15 agement services in contract with the plan or issuer. 

16 ‘‘(b) DEFINITIONS.—In this section: 

17 ‘‘(1) CONSUMER DECISION-SUPPORT TOOL.—The 

18 term ‘consumer decision-support tool’ means a tool 

19 designed to inform enrollees in a group health plan 

20 or health insurance coverage about all costs to the en21 rollee for prescription drugs covered by the plan or 

22 coverage, including out-of-pocket, copayment, and co23 insurance responsibility, as well as means for reduc24 ing the cost to the enrollee, such as manufacturer co25 payment assistance, purchasing at the cash price, and 

26 purchasing through mail order pharmacy benefits. 


pbinns on DSKJLVW7X2PROD with $$_JOB
212 

•S 1339 RS

1 ‘‘(2) COVERED THIRD PARTY.—The term ‘covered 

2 third party’ means a third party that is in contract, 

3 as a business associate (as defined in section 160.103 

4 of title 45, Code of Federal Regulations (or successor 

5 regulations)), with a group health plan or a health 

6 insurance issuer offering group or individual health 

7 insurance coverage to provide a consumer decision8 support tool. 

9 ‘‘(c) RULES OF CONSTRUCTION REGARDING PRI10 VACY.— 

11 ‘‘(1) Nothing in this section shall be construed to 

12 alter existing obligations of a covered entity or busi13 ness associate under the privacy, security, and breach 

14 notification regulations in parts 160 and 164 of title 

15 45, Code of Federal Regulations (or successor regula16 tions). 

17 ‘‘(2) Nothing in this section shall be construed to 

18 require a group health plan, a health insurance issuer 

19 offering group or individual health insurance cov20 erage, or an entity providing pharmacy benefit man21 agement services to share protected health informa22 tion, as defined in section 160.103 of title 45, Code 

23 of Federal Regulations (or successor regulations), with 

24 a covered third party.’’. 

25 (b) ERISA.— 


pbinns on DSKJLVW7X2PROD with $$_JOB
213 

•S 1339 RS

1 (1) IN GENERAL.—Subpart B of part 7 of sub2 title B of title I of the Employee Retirement Income 

3 Security Act of 1974 (29 U.S.C. 1185 et seq.), as 

4 amended by section 2, is further amended by adding 

5 at the end the following: 

6 ‘‘SEC. 727. PROHIBITION ON BLOCKING CONSUMER DECI7 SION-SUPPORT TOOLS. 

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

9 insurance issuer offering group health insurance coverage 

10 shall not enter into a contract with an entity that provides 

11 pharmacy benefit management services with respect to such 

12 plan or coverage if such contract includes any terms, condi13 tions, or costs that would prevent or restrict a covered third 

14 party from accessing or using information, for purposes of 

15 the consumer decision-support tool, relevant to the oper16 ability, implementation, and utilization of the consumer17 decision support tool regarding prescription drug benefits 

18 under the plan or coverage that are administered by the 

19 entity providing pharmacy benefit management services in 

20 contract with the plan or issuer. 

21 ‘‘(b) DEFINITIONS.—In this section: 

22 ‘‘(1) CONSUMER DECISION-SUPPORT TOOL.—The 

23 term ‘consumer decision-support tool’ means a tool 

24 designed to inform participants and beneficiaries in 

25 a group health plan or health insurance coverage 


pbinns on DSKJLVW7X2PROD with $$_JOB
214 

•S 1339 RS

1 about all costs to the participant or beneficiary for 

2 prescription drugs covered by the plan or coverage, 

3 including out-of-pocket, copayment, and coinsurance 

4 responsibility, as well as means for reducing the cost 

5 to the participant or beneficiary, such as manufac6 turer copayment assistance, purchasing at the cash 

7 price, and purchasing through mail order pharmacy 

8 benefits. 

9 ‘‘(2) COVERED THIRD PARTY.—The term ‘covered 

10 third party’ means a third party that is in contract, 

11 as a business associate (as defined in section 160.103 

12 of title 45, Code of Federal Regulations (or successor 

13 regulations)), with a group health plan or a health 

14 insurance issuer offering group health insurance cov15 erage to provide a consumer decision-support tool. 

16 ‘‘(c) RULES OF CONSTRUCTION.— 

17 ‘‘(1) Nothing in this section shall be construed to 

18 alter existing obligations of a covered entity or busi19 ness associate under the privacy, security, and breach 

20 notification regulations in parts 160 and 164 of title 

21 45, Code of Federal Regulations (or successor regula22 tions). 

23 ‘‘(2) Nothing in this section shall be construed to 

24 require a group health plan, a health insurance issuer 

25 offering group health insurance coverage, or an entity 


pbinns on DSKJLVW7X2PROD with $$_JOB
215 

•S 1339 RS

1 providing pharmacy benefit management services to 

2 share protected health information, as defined in sec3 tion 160.103 of title 45, Code of Federal Regulations 

4 (or successor regulations), with a covered third 

5 party.’’. 

6 (2) CLERICAL AMENDMENT.—The table of con7 tents in section 1 of the Employee Retirement Income 

8 Security Act of 1974 (29 U.S.C. 1001 et seq.), as 

9 amended by section 2, is further amended by insert10 ing after the item relating to section 726 the fol11 lowing: 

‘‘Sec. 727. Prohibition on blocking consumer decision-support tools.’’. 

12 (c) INTERNAL REVENUE CODE.— 

13 (1) IN GENERAL.—Subchapter B of chapter 100 

14 of the Internal Revenue Code of 1986, as amended by 

15 section 2, is further amended by adding at the end the 

16 following new section: 

17 ‘‘SEC. 9827. PROHIBITION ON BLOCKING CONSUMER DECI18 SION-SUPPORT TOOLS. 

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

20 group health insurance coverage shall not enter into a con21 tract with an entity that provides pharmacy benefit man22 agement services with respect to such plan if such contract 

23 includes any terms, conditions, or costs that would prevent 

24 or restrict a covered third party from accessing or using 

25 information, for purposes of the consumer decision-support 


pbinns on DSKJLVW7X2PROD with $$_JOB
216 

•S 1339 RS

1 tool, relevant to the operability, implementation, and utili2 zation of the consumer-decision support tool regarding pre3 scription drug benefits under the plan that are adminis4 tered by the entity providing pharmacy benefit manage5 ment services in contract with the plan. 

6 ‘‘(b) DEFINITIONS.—In this section: 

7 ‘‘(1) CONSUMER DECISION-SUPPORT TOOL.—The 

8 term ‘consumer decision-support tool’ means a tool 

9 designed to inform participants and beneficiaries in 

10 a group health plan about all costs to the participant 

11 or beneficiary for prescription drugs covered by the 

12 plan, including out-of-pocket, copayment, and coin13 surance responsibility, as well as means for reducing 

14 the cost to the participant or beneficiary, such as 

15 manufacturer copayment assistance, purchasing at 

16 the cash price, and purchasing through mail order 

17 pharmacy benefits. 

18 ‘‘(2) COVERED THIRD PARTY.—The term ‘covered 

19 third party’ means a third party that is in contract, 

20 as a business associate (as defined in section 160.103 

21 of title 45, Code of Federal Regulations (or successor 

22 regulations)), with a group health plan or a health 

23 insurance issuer offering group health insurance cov24 erage to provide a consumer decision-support tool. 

25 ‘‘(c) RULES OF CONSTRUCTION.— 


pbinns on DSKJLVW7X2PROD with $$_JOB
217 

•S 1339 RS

1 ‘‘(1) Nothing in this section shall be construed to 

2 alter existing obligations of a covered entity or busi3 ness associate under the privacy, security, and breach 

4 notification regulations in parts 160 and 164 of title 

5 45, Code of Federal Regulations (or successor regula6 tions). 

7 ‘‘(2) Nothing in this section shall be construed to 

8 require a group health plan or an entity providing 

9 pharmacy benefit management services to share pro10 tected health information, as defined in section 

11 160.103 of title 45, Code of Federal Regulations (or 

12 successor regulations), with a covered third party.’’. 

13 (2) CLERICAL AMENDMENT.—The table of sec14 tions for subchapter B of chapter 100 of such Code, 

15 as amended by section 2, is further amended by add16 ing at the end the following new item: 

‘‘Sec. 9827. Prohibition on blocking consumer decision-support tools.’’. 

17 (d) APPLICATION.—The amendments made by sub18 sections (a), (b), and (c) shall apply with respect to plan 

19 years beginning on or after the date that is 2 years after 

20 the date of enactment of this Act. 

21 (e) REGULATIONS.—The Secretary of Health and 

22 Human Services, the Secretary of Labor, and the Secretary 

23 of the Treasury shall jointly promulgate regulations to 

24 carry out the amendments made by subsections (a), (b), and 


pbinns on DSKJLVW7X2PROD with $$_JOB
218 

•S 1339 RS

1 (c), and shall issue draft regulations not later than 1 year 

2 after the date of enactment of this Act. 

3 SEC. 8. REQUIREMENT TO PROVIDE HEALTH CLAIMS, NET4 WORK, AND COST INFORMATION. 

5 (a) IN GENERAL.—Part A of title XXVII of the Public 

6 Health Service Act (42 U.S.C. 300gg et seq.) is amended 

7 by inserting after section 2715A the following: 

8 ‘‘SEC. 2715B. REQUIREMENT TO PROVIDE HEALTH CLAIMS, 

9 NETWORK, AND COST INFORMATION. 

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

11 insurance issuer offering group or individual health insur12 ance coverage shall make available for access, exchange, and 

13 use without special effort, through application program14 ming interfaces (or successor technology or standards), con15 sistent with standards and implementation specifications 

16 adopted under section 3004, the information described in 

17 subsection (b), in the manner described in subsection (b), 

18 as applicable, and otherwise consistent with this section. 

19 ‘‘(b) ELECTRONIC INFORMATION.—The following elec20 tronic information is required to be made available, as the 

21 Secretary may specify: 

22 ‘‘(1) Historical claims, provider encounter, and 

23 payment data for each enrollee, which— 

24 ‘‘(A) may include adjudicated medical and 

25 prescription drug claims and equivalent encounVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00218 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
219 

•S 1339 RS

1 ters, including all data elements contained in 

2 such transactions— 

3 ‘‘(i) that were adjudicated by the group 

4 health plan or health insurance issuer dur5 ing the previous 5 years or the enrollee’s en6 tire period of enrollment in the applicable 

7 plan or coverage if such period is less than 

8 the previous 5 years; 

9 ‘‘(ii) that involve benefits managed by 

10 any third party, such as a pharmacy bene11 fits manager or radiology benefits manager 

12 that manages benefits or adjudicates claims 

13 on behalf of the plan or coverage; and 

14 ‘‘(iii) from any other group health 

15 plan or health insurance coverage offered by 

16 the same insurance issuer, in which the 

17 same enrollee was enrolled during the pre18 vious 5 years; and 

19 ‘‘(B) shall be available to an enrollee or 

20 former enrollee, the enrollee’s providers, and any 

21 third-party applications or services authorized 

22 by the enrollee— 

23 ‘‘(i) through the application program24 ming interfaces (or successor technology or 

25 standards) consistent with standards and 


pbinns on DSKJLVW7X2PROD with $$_JOB
220 

•S 1339 RS

1 specifications adopted under section 3004, 

2 in a single, longitudinal format that is easy 

3 to understand, secure, and that may update 

4 automatically; 

5 ‘‘(ii) as soon as practicable, and in no 

6 case later than the period of time deter7 mined by the Secretary, after the claim is 

8 adjudicated or the data is received by the 

9 group health plan or health insurance 

10 issuer; and 

11 ‘‘(iii) for a period of 5 years after the 

12 end date of the enrollee’s enrollment in the 

13 plan or in any coverage offered by the 

14 health insurance issuer. 

15 ‘‘(2) Identifying directory information for all in16 network providers, including facilities and practi17 tioners, that participate in the plan or coverage, 

18 which shall— 

19 ‘‘(A) include— 

20 ‘‘(i) the national provider identifier for 

21 in-network facilities and practitioners; and 

22 ‘‘(ii) the name, address, phone number, 

23 and specialty for each such facility and 

24 practitioner, within a timeframe deter25 mined by the Secretary, from when the plan 


pbinns on DSKJLVW7X2PROD with $$_JOB
221 

•S 1339 RS

1 or coverage receives provider directory in2 formation or updates from that facility or 

3 practitioner; 

4 ‘‘(B) be capable of returning the informa5 tion necessary to establish a list of participating 

6 in-network facilities and practitioners, in a 

7 given specialty or at a particular facility type, 

8 within a specified geographic radius; and 

9 ‘‘(C) be capable of returning the network 

10 status, when presented with identifiers for a 

11 given enrollee and facility or practitioner. 

12 ‘‘(3) Estimated enrollee out-of-pocket costs, in13 cluding costs expected to be incurred through a de14 ductible, co-payment, coinsurance, or other form of 

15 cost-sharing, for— 

16 ‘‘(A) a designated set of common services or 

17 episodes of care, to be established by the Sec18 retary through rulemaking, including, at a min19 imum— 

20 ‘‘(i) in the case of services provided by 

21 a hospital, the 100 most common diagnosis22 related groups, as used in the Medicare In23 patient Prospective Patient System (or suc24 cessor episode-based reimbursement method25 ology) at that hospital, based on claims 


pbinns on DSKJLVW7X2PROD with $$_JOB
222 

•S 1339 RS

1 data adjudicated by the group health plan 

2 or health insurance issuer; 

3 ‘‘(ii) in the case of services provided in 

4 an out-patient setting, including radiology, 

5 lab tests, and out-patient surgical proce6 dures, any service rendered by the facility 

7 or practitioner, and reimbursed by the 

8 group health plan or health insurance 

9 issuer; and 

10 ‘‘(iii) in the case of post-acute care, in11 cluding home health providers, skilled nurs12 ing facilities, inpatient rehabilitation facili13 ties, and long-term care hospitals, the pa14 tient out-of-pocket costs for an episode of 

15 care, as the Secretary may determine, which 

16 permits users to reasonably compare costs 

17 across different facility and service types; 

18 and 

19 ‘‘(B) all prescription drugs currently in20 cluded on any tier of the formulary of the plan 

21 or coverage. 

22 ‘‘(c) AVAILABILITY AND ACCESS.—Subject to all appli23 cable Federal and State privacy, security, and breach noti24 fication laws, and within a timeframe determined by the 

25 Secretary, the application programming interfaces (or sucVerDate Sep 11 2014 00:11 Jun 23, 2023 Jkt 039200 PO 00000 Frm 00222 Fmt 6652 Sfmt 6203 E:\BILLS\S1339.RS S1339

pbinns on DSKJLVW7X2PROD with $$_JOB
223 

•S 1339 RS

1 cessor technology or standards), including all data required 

2 to be made available through such interfaces, shall— 

3 ‘‘(1) be made available by the applicable group 

4 health plan or health insurance issuer, at no charge, 

5 to— 

6 ‘‘(A) enrollees and prospective enrollees in 

7 the group health plan or health insurance cov8 erage; 

9 ‘‘(B) third parties authorized by the en10 rollee; 

11 ‘‘(C) facilities and practitioners who are 

12 under contract with the plan or coverage; and 

13 ‘‘(D) business associates of such facilities 

14 and practitioners, as defined in section 160.103 

15 of title 45, Code of Federal Regulations (or any 

16 successor regulations); 

17 ‘‘(2) be available to enrollees in the group health 

18 plan or health insurance coverage, and to third-party 

19 applications or services facilitating such access by en20 rollees, during the enrollment process and for a min21 imum of 5 years after the end date of the enrollee’s 

22 enrollment in the plan or in any coverage offered by 

23 the health insurance issuer; 


pbinns on DSKJLVW7X2PROD with $$_JOB
224 

•S 1339 RS

1 ‘‘(3) permit persistent access by third-party ap2 plications or services authorized by the enrollee, for a 

3 reasonable period of time; 

4 ‘‘(4) employ the applicable content, vocabulary, 

5 and technical standards, as determined by the Sec6 retary pursuant to title XXX; and 

7 ‘‘(5) employ security and authentication stand8 ards, as the Secretary determines appropriate. 

9 ‘‘(d) DENIAL OR DISCONTINUANCE OF ACCESS.—A 

10 group health plan or health insurance issuer offering group 

11 or individual health insurance coverage may deny access 

12 or discontinue access of the application programming inter13 faces (or successor technology or standards) to third-party 

14 applications or services on the basis of reasonable privacy 

15 or security concerns, as determined by the Secretary, in16 cluding at the request of the enrollee. 

17 ‘‘(e) NOTIFICATION.—When obtaining enrollee author18 ization to share information with a third party under this 

19 section, a group health plan or a health insurance issuer 

20 offering group or individual health insurance coverage shall 

21 include a notification for the enrollee that information 

22 shared with a third party that is not a covered entity or 

23 business associate is not subject to the privacy, security, or 

24 breach notification rules under parts 160 and 164 of title 

25 45, Code of Federal Regulations (or successor regulations). 


pbinns on DSKJLVW7X2PROD with $$_JOB
225 

•S 1339 RS

1 ‘‘(f) RULE OF CONSTRUCTION REGARDING PRIVACY.— 

2 Nothing in this section shall be construed to alter existing 

3 obligations of a covered entity or business associate under 

4 the privacy, security, and breach notification rules promul5 gated under section 264(c) of the Health Insurance Port6 ability and Accountability Act or section 13402 of the 

7 HITECH Act, or to alter the Secretary’s existing authority 

8 to modify such rules, under part 2 of title 42, Code of Fed9 eral Regulations (or successor regulations), under section 

10 444 of the General Education Provisions Act (20 U.S.C. 

11 1232g) (commonly referred to as the ‘Family Educational 

12 Rights and Privacy Act of 1974’), under the amendments 

13 made by the Genetic Information Nondiscrimination Act, 

14 or under State privacy law.’’. 

15 (b) EFFECTIVE DATE.—Section 2715B of the Public 

16 Health Service Act, as added by subsection (a), shall take 

17 effect 18 months after the date of enactment of this Act. 

18 SEC. 9. REQUIRED EXCEPTIONS PROCESS FOR MEDICATION 

19 STEP THERAPY PROTOCOLS. 

20 (a) SHORT TITLE.—This section may be cited as the 

21 ‘‘Safe Step Act’’. 

22 (b) REQUIRED EXCEPTIONS PROCESS FOR MEDICA23 TION STEP THERAPY PROTOCOLS.—The Employee Retire24 ment Income Security Act of 1974 is amended by inserting 


pbinns on DSKJLVW7X2PROD with $$_JOB
226 

•S 1339 RS

1 after section 713 of such Act (29 U.S.C. 1185b) the following 

2 new section: 

3 ‘‘SEC. 713A. REQUIRED EXCEPTIONS PROCESS FOR MEDICA4 TION STEP THERAPY PROTOCOLS. 

5 ‘‘(a) IN GENERAL.—In the case of a group health plan 

6 or health insurance issuer offering coverage offered in con7 nection with such a plan that provides coverage of a pre8 scription drug pursuant to a medication step therapy pro9 tocol, the plan or issuer shall— 

10 ‘‘(1) implement a clear, prompt, and transparent 

11 process for a participant or beneficiary (or the pre12 scribing health care provider (referred to in this sec13 tion as the ‘prescriber’) on behalf of the participant 

14 or beneficiary) to request an exception to such medi15 cation step therapy protocol, pursuant to subsection 

16 (b); and 

17 ‘‘(2) where the participant or beneficiary or pre18 scriber’s request for an exception to the medication 

19 step therapy protocols satisfies the criteria and re20 quirements of subsection (b), cover the requested drug 

21 in accordance with the terms established by the plan 

22 or coverage for patient cost-sharing rates or amounts 

23 at the beginning of the plan year. 

24 ‘‘(b) CIRCUMSTANCES FOR EXCEPTION APPROVAL.— 

25 The circumstances requiring an exception to a medication 


pbinns on DSKJLVW7X2PROD with $$_JOB
227 

•S 1339 RS

1 step therapy protocol, pursuant to a request under sub2 section (a), are any of the following: 

3 ‘‘(1) Any treatments otherwise required under 

4 the protocol, or treatments in the same pharma5 cological class or having the same mechanism of ac6 tion, including treatments provided prior to the effec7 tive date of the participant’s or beneficiary’s coverage 

8 under the plan or coverage, have been ineffective in 

9 the treatment of the disease or condition of the partic10 ipant or beneficiary, when prescribed consistent with 

11 clinical indications, clinical guidelines, or other peer12 reviewed evidence, based on the prescribing health 

13 care professional’s judgement or relevant information 

14 provided by the participant or beneficiary (including 

15 the medical records of the participant or beneficiary). 

16 ‘‘(2) Delay of effective treatment would lead to 

17 severe or irreversible consequences, or worsen disease 

18 progression or a comorbidity and the treatment other19 wise required under the protocol is reasonably ex20 pected by the prescriber to be ineffective based upon 

21 the documented physical or mental characteristics of 

22 the participant or beneficiary and the known charac23 teristics of such treatment. 

24 ‘‘(3) Any treatments otherwise required under 

25 the protocol are contraindicated for the participant or 


pbinns on DSKJLVW7X2PROD with $$_JOB
228 

•S 1339 RS

1 beneficiary or have caused, or are likely to cause, 

2 based on clinical, peer-reviewed evidence, an adverse 

3 reaction or other physical or mental harm to the par4 ticipant or beneficiary. 

5 ‘‘(4) Any treatment otherwise required under the 

6 protocol has prevented, will prevent, or is likely to 

7 prevent a participant or beneficiary from achieving 

8 or maintaining reasonable and safe functional ability 

9 in performing occupational responsibilities or activi10 ties of daily living (as defined in section 441.505 of 

11 title 42, Code of Federal Regulations (or successor reg12 ulations)). 

13 ‘‘(5) The participant or beneficiary is stable for 

14 his or her disease or condition on the prescription 

15 drug or drugs selected by the prescriber and has pre16 viously received approval for coverage of the relevant 

17 drug or drugs for the disease or condition by any 

18 public or private health plan. 

19 ‘‘(6) Other circumstances, as determined by the 

20 Secretary. 

21 ‘‘(c) REQUIREMENT OF A CLEAR PROCESS.— 

22 ‘‘(1) IN GENERAL.—The process required by sub23 section (a) shall— 

24 ‘‘(A) provide the prescriber or participant 

25 or beneficiary an opportunity to present such 


pbinns on DSKJLVW7X2PROD with $$_JOB
229 

•S 1339 RS

1 prescriber’s clinical rationale and relevant med2 ical information for the group health plan or 

3 health insurance issuer to evaluate such request 

4 for exception; 

5 ‘‘(B) develop and use a standard form and 

6 instructions for the request of an exception under 

7 subsection (b), available in paper and electronic 

8 forms, and allow for submission of such form by 

9 paper and electronic means; 

10 ‘‘(C) provide both paper and electronic 

11 means for the submission of requests for addi12 tional information; 

13 ‘‘(D) clearly set forth all required informa14 tion and the specific criteria that will be used to 

15 determine whether an exception is warranted, 

16 which may require disclosure of— 

17 ‘‘(i) the medical history or other health 

18 records of the participant or beneficiary 

19 demonstrating that the participant or bene20 ficiary seeking an exception— 

21 ‘‘(I) has tried other drugs in22 cluded in the drug therapy class with23 out success; or 

24 ‘‘(II) has taken the requested drug 

25 for a clinically appropriate amount of 


pbinns on DSKJLVW7X2PROD with $$_JOB
230 

•S 1339 RS

1 time to establish stability, in relation 

2 to the condition being treated and pre3 scription guidelines given by the pre4 scribing physician; or 

5 ‘‘(ii) other clinical information that 

6 may be relevant to conducting the exception 

7 review; 

8 ‘‘(E) not require the submission of any in9 formation or supporting documentation beyond 

10 what is strictly necessary (as determined by the 

11 Secretary) to determine whether a circumstance 

12 listed in subsection (b) exists; 

13 ‘‘(F) clearly outline conditions under which 

14 an exception request warrants expedited resolu15 tion from the group health plan or health insur16 ance issuer, pursuant to subsection (d)(2); and 

17 ‘‘(G) allow a representative of a participant 

18 or beneficiary, which may include a designated 

19 third-party advocate, to act on behalf of the par20 ticipant or beneficiary. 

21 ‘‘(2) AVAILABILITY OF PROCESS INFORMATION.— 

22 The group health plan or health insurance issuer shall 

23 make information regarding the process required 

24 under subsection (a) readily available in the relevant 

25 plan materials, including the summary of benefits 


pbinns on DSKJLVW7X2PROD with $$_JOB
231 

•S 1339 RS

1 and, if available, on the website of the group health 

2 plan or health insurance issuer. Such information 

3 shall include— 

4 ‘‘(A) the requirements for requesting an ex5 ception to a medication step therapy protocol 

6 pursuant to this section; and 

7 ‘‘(B) any forms, supporting information, 

8 and contact information, as appropriate. 

9 ‘‘(d) TIMING FOR DETERMINATION OF EXCEPTION.— 

10 The process required under subsection (a)(1) shall provide 

11 for the disposition of requests received under such para12 graph in accordance with the following: 

13 ‘‘(1) Subject to paragraph (2), not later than 72 

14 hours after receiving an initial exception request, the 

15 plan or issuer shall respond to the participant or ben16 eficiary and, if applicable, the requesting prescriber 

17 with either a determination of exception eligibility or 

18 a request for additional required information strictly 

19 necessary to make a determination of whether the con20 ditions specified in subsection (b) are met. The plan 

21 or issuer shall respond to the participant or bene22 ficiary and, if applicable, the requesting prescriber, 

23 with a determination of exception eligibility no later 

24 than 72 hours after receipt of the additional required 

25 information. 


pbinns on DSKJLVW7X2PROD with $$_JOB
232 

•S 1339 RS

1 ‘‘(2) In the case of a request under circumstances 

2 in which the applicable medication step therapy pro3 tocol may seriously jeopardize the life or health of the 

4 participant or beneficiary, may jeopardize the ability 

5 of the participant or beneficiary to regain maximum 

6 function, or may subject the participant or bene7 ficiary to severe pain that cannot be adequately man8 aged without the treatment that is the subject of the 

9 request, the plan or issuer shall conduct a review of 

10 the request and respond to the participant or bene11 ficiary and, if applicable, the requesting prescriber, 

12 with either a determination of exception eligibility or 

13 a request for additional required information strictly 

14 necessary to make a determination of whether the con15 ditions specified in subsection (b) are met, in accord16 ance with the following: 

17 ‘‘(A) If the plan or issuer can make a deter18 mination of exception eligibility without addi19 tional information, such determination shall be 

20 made on an expedited basis, and no later than 

21 24 hours after receipt of such request. 

22 ‘‘(B) If the plan or issuer requires addi23 tional information before making a determina24 tion of exception eligibility, the plan or issuer 

25 shall respond to the participant or beneficiary 


pbinns on DSKJLVW7X2PROD with $$_JOB
233 

•S 1339 RS

1 and, if applicable, the requesting prescriber, with 

2 a request for such information within 24 hours 

3 of the request for a determination, and shall re4 spond with a determination of exception eligi5 bility as quickly as the condition or disease re6 quires, and no later than 24 hours after receipt 

7 of the additional required information. 

8 ‘‘(e) DURATION OF A GRANT.—If an exception to a 

9 medication step therapy protocol is granted under this sec10 tion to a participant or beneficiary, coverage for the re11 quested drug shall remain in effect with respect to such par12 ticipant or beneficiary for not less than one year. 

13 ‘‘(f) MEDICATION STEP THERAPY PROTOCOL.—In this 

14 section, the term ‘medication step therapy protocol’ means 

15 a drug therapy utilization management protocol or pro16 gram under which a group health plan or health insurance 

17 issuer offering group health insurance coverage of prescrip18 tion drugs requires a participant or beneficiary to try an 

19 alternative preferred prescription drug or drugs before the 

20 plan or health insurance issuer approves coverage for the 

21 non-preferred drug therapy prescribed. 

22 ‘‘(g) CLARIFICATION.—This section shall apply with 

23 respect to any group health plan or health insurance cov24 erage offered in connection with such a plan that provides 

25 coverage of a prescription drug pursuant to a policy that 


pbinns on DSKJLVW7X2PROD with $$_JOB
234 

•S 1339 RS

1 meets the definition of the term ‘medication step therapy 

2 protocol’ in subsection (f), regardless of whether such policy 

3 is described by such group health plan or health insurance 

4 coverage as a step therapy protocol. 

5 ‘‘(h) REPORTING.— 

6 ‘‘(1) REPORTING TO THE SECRETARY.—Not later 

7 than 3 years after the date of enactment of the Safe 

8 Step Act and not later than October 1 of each year 

9 thereafter, each group health plan and health insur10 ance issuer offering group health insurance coverage 

11 shall report to the Secretary, in such manner as the 

12 Secretary shall require, the following: 

13 ‘‘(A) The number of step therapy exception 

14 requests received for each exception circumstance 

15 described in paragraphs (1) through (6) of sub16 section (b), and the numbers of such requests for 

17 each such circumstance that were— 

18 ‘‘(i) approved; 

19 ‘‘(ii) deemed approved under sub20 section (d)(3) due to the failure of the plan 

21 or issuer to timely respond; 

22 ‘‘(iii) denied, and the reasons for the 

23 denials; 

24 ‘‘(iv) initially denied and appealed; 

25 and 


pbinns on DSKJLVW7X2PROD with $$_JOB
235 

•S 1339 RS

1 ‘‘(v) initially denied and then subse2 quently reversed by internal appeals or ex3 ternal reviews. 

4 ‘‘(B) The number of times a plan or issuer 

5 requested additional information in response to 

6 a step therapy exception request, by exception 

7 circumstance described in paragraphs (1) 

8 through (6) of subsection (b). 

9 ‘‘(C) The number of exception requests sub10 mitted by participants or beneficiaries, and the 

11 number of exception requests submitted by pre12 scribers, by medical specialty. 

13 ‘‘(D) The medical conditions for which par14 ticipants and beneficiaries were granted excep15 tions due to the likelihood that switching from a 

16 prescription drug will likely cause an adverse re17 action by, or physical or mental harm to, the 

18 participant or beneficiary, as described in sub19 section (b)(3). 

20 ‘‘(E) The entities responsible for providing 

21 pharmacy benefit management services for the 

22 group health plan or health insurance coverage. 

23 ‘‘(2) INFORMATION.—A group health plan or 

24 health insurance issuer offering group health insur25 ance coverage shall not enter into a contract with a 


pbinns on DSKJLVW7X2PROD with $$_JOB
236 

•S 1339 RS

1 third-party administrator or an entity providing 

2 pharmacy benefit management services on behalf of 

3 the plan or coverage that prevents the plan or issuer 

4 from obtaining from the third-party administrator or 

5 the entity providing pharmacy benefit management 

6 services any information needed for the plan or issuer 

7 to comply with the reporting requirements under 

8 paragraph (1). 

9 ‘‘(3) REPORTS TO CONGRESS.—Not later than 3 

10 years after the date of enactment of the Safe Step Act, 

11 and not later than October 1 of each year thereafter, 

12 the Secretary shall submit to Congress, and make 

13 publicly available, a report that contains a summary 

14 and analysis of the information reported under para15 graph (1), including an analysis of, with respect to 

16 requests for exceptions under this section, approvals, 

17 and denials, including the reasons for denials; ap18 peals and external reviews; and trends, if any, in ex19 ception requests by medical specialty or medical con20 dition.’’. 

21 (c) CLERICAL AMENDMENT.—The table of contents in 

22 section 1 of the Employee Retirement Income Security Act 

23 of 1974 (29 U.S.C. 1001 et seq.) is amended by inserting 

24 after the item relating to section 713 the following new 

25 items: 

‘‘Sec. 713A. Required exceptions process for medication step therapy protocols.’’. 


pbinns on DSKJLVW7X2PROD with $$_JOB
237 

•S 1339 RS

1 (d) EFFECTIVE DATE.— 

2 (1) IN GENERAL.—The amendment made by sub3 section (b) applies with respect to plan years begin4 ning with the first plan year that begins at least 6 

5 months after the date of the enactment of this Act. 

6 (2) REGULATIONS.—Not later than 6 months 

7 after the date of the enactment of this Act, the Sec8 retary of Labor shall issue final regulations, through 

9 notice and comment rulemaking, to implement the 

10 provisions of section 713A of the Employee Retire11 ment Income Security Act of 1974, as added by sub12 section (b). 


pbinns on DSKJLVW7X2PROD with $$_JOB
Calendar No. 113 

118TH CONGRESS 

1ST SESSION S. 1339 

A BILL 

To provide for increased oversight of entities that 

ance coverage. on behalf of group health plans and health insurprovide pharmacy benefit management services 

JUNE 22, 2023 

Reported with an amendment 


pbinns on DSKJLVW7X2PROD with $$_JOB