I 

115TH CONGRESS 

2D SESSION H. R. 5958 

To amend title XVIII of the Social Security Act to require pharmacy-negotiated price concessions and pharmacy incentive payments and adjustments to be included in negotiated prices at the point-of-sale under 

part D of the Medicare program, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 24, 2018 

Mr. COLLINS of Georgia (for himself, Mr. CARTER of Georgia, Mr. DUNCAN

of Tennessee, and Mr. GONZALEZ of Texas) 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 require 

pharmacy-negotiated price concessions and pharmacy incentive payments and adjustments to be included in negotiated prices at the point-of-sale under part D of the 

Medicare program, 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 ‘‘Phair Pricing Act of 

5 2018’’. 


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1 SEC. 2. REQUIRING PHARMACY-NEGOTIATED PRICE CON2 CESSIONS AND PHARMACY INCENTIVE PAY3 MENTS AND ADJUSTMENTS TO BE INCLUDED 

4 IN NEGOTIATED PRICES AT THE POINT-OF5 SALE UNDER PART D OF THE MEDICARE PRO6 GRAM. 

7 Section 1860D–2(d)(1)(B) of the Social Security Act 

8 (42 U.S.C. 1395w–102(d)(1)(B)) is amended— 

9 (1) by striking ‘‘PRICES.—For purposes’’ and 

10 inserting ‘‘PRICES.— 

11 ‘‘(i) IN GENERAL.—For purposes’’; 

12 and 

13 (2) by adding at the end the following new 

14 clauses: 

15 ‘‘(ii) PRICES NEGOTIATED WITH

16 PHARMACY AT POINT-OF-SALE.— 

17 ‘‘(I) IN GENERAL.—Subject to 

18 subclause (III), for plan years begin19 ning on or after January 1, 2019, ne20 gotiated prices for covered part D 

21 drugs described in clause (i) provided 

22 under a prescription drug plan, in23 cluding all pharmacy price concessions 

24 and all incentive payments and ad25 justments negotiated with the phar26 macy dispensing such drug, shall be 


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1 provided at the point-of-sale of the 

2 covered part D drug. If the negotiated 

3 price of such drug, including all phar4 macy price concessions and all incen5 tive payments and adjustments nego6 tiated with such pharmacy, is not pos7 sible to calculate at the point-of-sale, 

8 the PDP sponsor of such plan shall 

9 use an estimated negotiated price, in10 cluding all estimated pharmacy nego11 tiated price concessions and incentive 

12 payments and adjustments and taking 

13 into account the negotiated price of 

14 such drug in the prior year (if avail15 able). 

16 ‘‘(II) APPLICATION OF INCEN17 TIVE PAYMENTS AND ADJUST18 MENTS.—For plan years beginning on 

19 or after January 1, 2019, in the case 

20 that a PDP sponsor uses incentive 

21 payments and adjustments with re22 spect to payment to a pharmacy for a 

23 covered part D drug, such payments 

24 and adjustments shall be determined 

25 through the use of a quality measure 


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1 approved by the Secretary and estab2 lished by the working group estab3 lished under clause (iii). 

4 ‘‘(III) NO INCREASE IN COST

5 SHARING.—Subclause (I) shall not 

6 apply in the case where application of 

7 such subclause would increase the 

8 amount owed by an individual in cost 

9 sharing above the amount such indi10 vidual would have owed in cost shar11 ing without application of such sub12 clause. 

13 ‘‘(IV) DISCREPANCIES BETWEEN

14 NEGOTIATED PRICES AND ACTUAL RE15 IMBURSEMENT.—In the case that the 

16 Secretary determines that the nego17 tiated price of a PDP sponsor applied 

18 at the point-of-sale with respect to a 

19 covered part D drug for a year dis20 pensed by a pharmacy was not equal 

21 to the total reimbursement made to 

22 such pharmacy for such drug for such 

23 year (taking into account any incen24 tive payments and adjustments and 

25 pharmacy price concessions, regardVerDate Sep 11 2014 20:20 May 31, 2018 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5958.IH H5958

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1 less of when such payments and ad2 justments or price concessions were 

3 applied), such sponsor shall, not later 

4 than 90 days after receiving notice of 

5 such determination, furnish to the 

6 pharmacy that dispensed such drug 

7 and to the Secretary a written expla8 nation of why such negotiated price 

9 was not equal to such reimbursement. 

10 ‘‘(V) DEFINITIONS.—In this 

11 clause: 

12 ‘‘(aa) INCENTIVE PAYMENTS

13 AND ADJUSTMENTS.—The term 

14 ‘incentive payments and adjust15 ments’ means, with respect to 

16 payment to a pharmacy by a 

17 PDP sponsor for a covered part 

18 D drug, any prospective or retro19 spective price concessions, re20 bates, discounts, fees, reconcili21 ation adjustments, bonuses, per22 formance payments, incentives, 

23 and any other adjustment to 

24 such payment determined 

25 through the use of a quality 


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1 measure, and any other adjust2 ment made with respect to such 

3 payment, regardless of when such 

4 payments and adjustments are 

5 applied. Such term does not in6 clude any manufacturer rebates 

7 or concessions made with respect 

8 to such drug. 

9 ‘‘(bb) PDP SPONSOR.—The 

10 term ‘PDP sponsor’ includes an 

11 MA organization offering an 

12 MA–PD plan under part C and 

13 an entity that contracts with 

14 such sponsor or organization, 

15 such as a pharmacy benefit man16 ager. 

17 ‘‘(cc) QUALITY MEASURE.— 

18 The term ‘quality measure’ 

19 means performance criteria es20 tablished by a PDP sponsor (in21 cluding an entity that contracts 

22 with such sponsor, such as a 

23 pharmacy benefit manager) to 

24 determine the amount or applicaVerDate Sep 11 2014 20:58 May 31, 2018 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5958.IH H5958

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1 bility of incentive payments and 

2 adjustments. 

3 ‘‘(iii) QUALITY MEASURE WORKING

4 GROUP.— 

5 ‘‘(I) IN GENERAL.—Not later 

6 than September 1, 2018, the Sec7 retary shall convene a quality meas8 ures working group (in this clause re9 ferred to as the ‘working group’) for 

10 purposes of establishing quality meas11 ures (as defined in clause (ii)(IV)) 

12 that may be used by a PDP sponsor 

13 (as defined in clause (ii)) under this 

14 part. 

15 ‘‘(II) COMPOSITION.—The work16 ing group shall consist of representa17 tives from each the following: 

18 ‘‘(aa) PDP sponsors. 

19 ‘‘(bb) Pharmacies rep20 resenting all pharmacy practice 

21 types. 

22 ‘‘(cc) Pharmacy benefit 

23 managers. 

24 ‘‘(dd) Patient advocacy or25 ganizations. 


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1 ‘‘(ee) Such other entities as 

2 the Secretary determines appro3 priate. 

4 ‘‘(III) DUTIES.—The working 

5 group shall provide for the establish6 ment of quality measures that may be 

7 used by a PDP sponsor (as defined in 

8 clause (ii)) with respect to incentive 

9 payments and adjustments (as defined 

10 in clause (ii)(IV)) for a pharmacy 

11 under this part. Such measures estab12 lished by such group shall include only 

13 such measures that— 

14 ‘‘(aa) are reasonable and rel15 evant with respect to the practice 

16 type of the applicable pharmacy; 

17 and 

18 ‘‘(bb) evaluate criteria over 

19 which the pharmacy has mean20 ingful control and ability to influ21 ence, consistent with the phar22 macy’s practice type.’’. 


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1 SEC. 3. PHARMACY BENEFIT MANAGER PROVISION OF IN2 FORMATION. 

3 (a) IN GENERAL.—Section 1150A(b)(2) of the Social 

4 Security Act (42 U.S.C. 1320b–23(b)(2)) is amended by 

5 striking ‘‘excluding’’ and inserting ‘‘including’’. 

6 (b) EFFECTIVE DATE.—The amendment made by 

7 subsection (a) shall apply with respect to contract years 

8 beginning on or after January 1, 2019. 

Æ 


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