I 

113TH CONGRESS 

2D SESSION H. R. 4437 

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 

APRIL 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 Committee on Ways and Means, 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 paragraphs: 

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. 

Æ 


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