I 

113TH CONGRESS 

2D SESSION H. R. 5815 

To amend title XVIII of the Social Security Act to provide for pharmacy 

benefits manager standards under the Medicare prescription drug program to further transparency of payment methodologies to pharmacies, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 9, 2014 

Mr. COLLINS of Georgia (for himself and Mr. LOEBSACK) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Armed 

Services, and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of 

such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend title XVIII of the Social Security Act to provide 

for pharmacy benefits manager standards under the 

Medicare prescription drug program to further transparency of payment methodologies to pharmacies, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Generic Drug Pricing 

5 Fairness Act’’. 


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1 SEC. 2. PHARMACY BENEFITS MANAGER STANDARDS 

2 UNDER THE MEDICARE PROGRAM. 

3 (a) IN GENERAL.—Section 1860D–12(b) of the So4 cial Security Act (42 U.S.C. 1395w–112(b)) is amended 

5 by adding at the end the following new paragraph: 

6 ‘‘(7) PHARMACY BENEFITS MANAGER TRANS7 PARENCY REQUIREMENTS.—Each contract entered 

8 into with a PDP sponsor under this part with re9 spect to a prescription drug plan offered by such 

10 sponsor shall provide that the PDP may not enter 

11 into a contract with any pharmacy benefits manager 

12 (referred to in this paragraph as a ‘PBM’) to man13 age the prescription drug coverage provided under 

14 such plan, or to control the costs of the prescription 

15 drug coverage under such plan, unless the PBM ad16 heres to the following criteria when handling person17 ally identifiable utilization and claims data or other 

18 sensitive patient data: 

19 ‘‘(A) The PBM may not transmit any per20 sonally identifiable utilization or claims data, 

21 with respect to a plan enrollee, to a pharmacy 

22 owned by a PBM if the plan enrollee has not 

23 voluntarily elected in writing or via secure elec24 tronic means to fill that particular prescription 

25 at the PBM-owned pharmacy. 


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

2 plan enrollee use a retail pharmacy, mail order 

3 pharmacy, specialty pharmacy, or other phar4 macy entity providing pharmacy services in 

5 which the PBM has an ownership interest or 

6 that has an ownership interest in the PBM or 

7 provide an incentive to a plan enrollee to en8 courage the enrollee to use a retail pharmacy, 

9 mail order pharmacy, specialty pharmacy, or 

10 other pharmacy entity providing pharmacy serv11 ices in which the PBM has an ownership inter12 est or that has an ownership interest in the 

13 PBM, if the incentive is applicable only to such 

14 pharmacies.’’. 

15 (b) REGULAR UPDATE OF PRESCRIPTION DRUG

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

17 12(b) of the Social Security Act (42 U.S.C. 1395w– 

18 112(b)) is amended to read as follows: 

19 ‘‘(6) REGULAR UPDATE OF PRESCRIPTION

20 DRUG PRICING STANDARD.— 

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

22 a prescription drug plan uses a standard for re23 imbursement (as described in subparagraph 

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

25 each contract entered into with such sponsor 


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1 under this part with respect to the plan shall 

2 provide that the sponsor shall— 

3 ‘‘(i) update such standard not less fre4 quently than once every 7 days, beginning 

5 with an initial update on January 1 of 

6 each year, to accurately reflect the market 

7 price of acquiring the drug; 

8 ‘‘(ii) disclose to applicable pharmacies 

9 the sources used for making any such up10 date; 

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

12 for reimbursement is not publicly available, 

13 disclose to the applicable pharmacies all in14 dividual drug prices to be so updated in 

15 advance of the use of such prices for the 

16 reimbursement of claims; and 

17 ‘‘(iv) establish a process to appeal, in18 vestigate, and resolve disputes regarding 

19 individual drug prices that are less than 

20 the pharmacy acquisition price for such 

21 drug. 

22 ‘‘(B) PRESCRIPTION DRUG PRICING

23 STANDARD DEFINED.—For purposes of sub24 paragraph (A), a standard for reimbursement 

25 of a pharmacy is any methodology or formula 


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1 for varying the pricing of a drug or drugs dur2 ing the term of the pharmacy reimbursement 

3 contract that is based on the cost of the drug 

4 involved, including drug pricing references and 

5 amounts that are based upon average wholesale 

6 price, wholesale average cost, average manufac7 turer price, average sales price, maximum al8 lowable cost (MAC), or other costs, whether 

9 publicly available or not.’’. 

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

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

12 January 1, 2015. 

13 SEC. 3. REGULAR UPDATE OF PRESCRIPTION DRUG PRIC14 ING STANDARD UNDER TRICARE RETAIL 

15 PHARMACY PROGRAM. 

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

17 amended by adding at the end the following new para18 graph: 

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

20 TRICARE retail pharmacy program described in sub21 section (a)(2)(E)(ii), the Secretary shall ensure that a con22 tract entered into with a TRICARE managed care support 

23 contractor includes requirements described in section 

24 1860D–12(b)(6) of the Social Security Act (42 U.S.C. 


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1 1395w–112(b)(6)) to ensure the provision of information 

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

3 SEC. 4. PRESCRIPTION DRUG TRANSPARENCY IN THE FED4 ERAL EMPLOYEE HEALTH BENEFITS PRO5 GRAM. 

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

7 States Code, is amended by adding at the end the fol8 lowing new subsections: 

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

10 under this chapter under which a carrier has an agree11 ment with a pharmacy benefits manager (in this sub12 section referred to as a ‘PBM’) to manage prescription 

13 drug coverage or to control the costs of the prescription 

14 drug coverage unless the carrier and PBM adhere to the 

15 following criteria: 

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

17 identifiable utilization or claims data with respect to 

18 an individual enrolled under such contract or plan to 

19 a pharmacy owned by the PBM if the individual has 

20 not voluntarily elected in writing or via secure elec21 tronic means to fill that particular prescription at 

22 such a pharmacy. 

23 ‘‘(2) The PBM may not require that an indi24 vidual enrolled under such contract or plan use a re25 tail pharmacy, mail order pharmacy, specialty pharVerDate Sep 11 2014 03:03 Dec 11, 2014 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5815.IH H5815

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1 macy, or other pharmacy entity providing pharmacy 

2 services in which the PBM has an ownership interest 

3 or that has an ownership interest in the PBM or 

4 provide an incentive to a plan enrollee to encourage 

5 the enrollee to use a retail pharmacy, mail order 

6 pharmacy, specialty pharmacy, or other pharmacy 

7 entity providing pharmacy services in which the 

8 PBM has an ownership interest or that has an own9 ership interest in the PBM, if the incentive is appli10 cable only to such pharmacies. 

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

12 this chapter provides for a standard for reimbursement 

13 (as described in paragraph (2)) with respect to a prescrip14 tion drug plan, such contract or plan shall provide that 

15 the applicable carrier— 

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

17 than once every 7 days, beginning with an initial up18 date on January 1 of each year, to accurately reflect 

19 the market price of acquiring the drug; 

20 ‘‘(B) disclose to applicable pharmacies the 

21 sources used for making any such update; 

22 ‘‘(C) if the source for such a standard for reim23 bursement is not publicly available, disclose to the 

24 applicable pharmacies all individual drug prices to be 


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1 so updated in advance of the use of such prices for 

2 the reimbursement of claims; and 

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

4 and resolve disputes regarding individual drug prices 

5 that are less than the pharmacy acquisition price for 

6 such drug. 

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

8 reimbursement of a pharmacy is any methodology or for9 mula for varying the pricing of a drug or drugs during 

10 the term of the pharmacy reimbursement contract that is 

11 based on the cost of the drug involved, including drug pric12 ing references and amounts that are based upon average 

13 wholesale price, wholesale average cost, average manufac14 turer price, average sales price, maximum allowable cost, 

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

16 (b) APPLICATION.—The amendment made by sub17 section (a) shall apply to any contract entered into under 

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

19 the date of enactment of this section. 

Æ 


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