I 

109TH CONGRESS 

1ST SESSION H. R. 1669

To ensure integrity in the operation of pharmacy benefit managers. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 14, 2005

Mr. WEINER (for himself and Mr. MORAN of Kansas) introduced the following 

bill; which was referred to the Committee on Energy and Commerce 

A BILL

To ensure integrity in the operation of pharmacy benefit 

managers.

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 Transparency Act of 2005’’. 

6 SEC. 2. REQUIREMENTS RELATING TO PHARMACY BENEFIT 

7 MANAGERS. 

8 (a) PROHIBITION ON CROSS OWNERSHIP.—

9 (1) IN GENERAL.—No pharmaceutical drug 

10 manufacturer may have a controlling interest in an 

11 entity that is a pharmacy benefit manager. 
2

•HR 1669 IH 

1 (2) PENALTY.—The Secretary of Health and 

2 Human Services may issue such civil penalties for a 

3 violation of paragraph (1) as the Secretary of 

4 Health and Human Services determines necessary. 

5 (b) DRUG INTERCHANGE.—

6 (1) PROHIBITIONS.—

7 (A) COST INCREASE.—A pharmacy benefit 

8 manager shall not make any drug interchange 

9 proposal for an individual who is served by such 

10 manager where the net cost of the drug to 

11 which the prescription would be changed ex12 ceeds that of the drug from which the prescrip13 tion would be changed. 

14 (B) DISCLOSURE TO INDIVIDUAL.—A 

15 pharmacy benefit manager shall not make any 

16 drug interchange for an individual who is 

17 served by such manager unless the pharmacy 

18 benefit manager discloses to the individual, in a 

19 clear and conspicuous manner, the savings to 

20 the individual associated with such interchange. 

21 (C) GENERICS.—A pharmacy benefit man22 ager shall not make any drug interchange pro23 posal for an individual who is served by such 

24 manager if the drug from which the prescrip25 tion would be changed has generic equivalents 
3

•HR 1669 IH 

1 and the drug to which the prescription would be 

2 changed has no generic equivalents, unless the 

3 drug to which the prescription would be 

4 changed has a lower net cost to the individual 

5 than does each of the generic equivalents of the 

6 drug from which the prescription would be 

7 changed. 

8 (2) PENALTY.—A pharmacy benefit manager 

9 that violates subparagraph (A), (B), or (C) of para10 graph (1) with respect to an individual and presents 

11 a claim for payment to the United States Govern12 ment as reimbursement for services to such indi13 vidual, shall be considered in violation of section 

14 3729 of title 31, United States Code. 

15 (c) DISCLOSURE OF COMPENSATION FROM DRUG

16 MANUFACTURERS.—

17 (1) QUARTERLY AND ANNUAL DISCLOSURES.—

18 At the end of each fiscal year quarter, each phar19 macy benefit manager shall disclose—

20 (A) to the client plans of such manager 

21 and to the Antitrust Division of the Depart22 ment of Justice, all compensation and remu23 neration that the pharmacy benefit manager re24 ceived during such fiscal year quarter from a 

25 pharmaceutical drug manufacturer, including, 
4

•HR 1669 IH 

1 regardless of how categorized, market share in2 centives, commissions, mail service purchase 

3 discounts, and administrative or management 

4 fees; and 

5 (B) to the client plans of such manager, 

6 any fees received for sales of utilization data to 

7 a pharmaceutical drug manufacturer. 

8 (2) DISCLOSURE AT CONTRACTING STAGE.—

9 Each pharmacy benefit manager shall disclose to 

10 each client plan and prospective client plan of such 

11 manager, in advance of executing an agreement with 

12 such plan, information relating to the pharmacy ben13 efit manager’s methodology of soliciting and receiv14 ing payments from pharmaceutical drug manufac15 turers. 

16 (d) DEFINITIONS.—For purposes of this section: 

17 (1) CLIENT PLAN.—The term ‘‘client plan’’ 

18 means a pharmaceutical plan in which the entity 

19 that offers such plan to its beneficiaries contracts di20 rectly with a pharmacy benefit manager to provide 

21 or administer such plan. 

22 (2) DRUG INTERCHANGE.—The term ‘‘drug 

23 interchange’’ means any change from one prescrip24 tion drug to another prescription drug that is in-
5

•HR 1669 IH 

1 tended to address or treat the same illness or condi2 tion.

Æ