II 

117TH CONGRESS 

2D SESSION S. 4293 

To prevent unfair and deceptive acts or practices and the dissemination 

of false information related to pharmacy benefit management services 

for prescription drugs, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 24, 2022 

Ms. CANTWELL (for herself and Mr. GRASSLEY) introduced the following bill; 

which was read twice and referred to the Committee on Commerce, 

Science, and Transportation 

A BILL 

To prevent unfair and deceptive acts or practices and the 

dissemination of false information related to pharmacy 

benefit management services for prescription drugs, 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 ‘‘Pharmacy Benefit 

5 Manager Transparency Act of 2022’’. 


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1 SEC. 2. PROHIBITION ON UNFAIR OR DECEPTIVE PRE2 SCRIPTION DRUG PRICING PRACTICES. 

3 (a) CONDUCT PROHIBITED.—Except as provided in 

4 subsection (b), it shall be unlawful for any pharmacy ben5 efit manager (or affiliate, subsidiary, or agent of a phar6 macy benefit manager), directly or indirectly, to engage 

7 in any of the following activities related to pharmacy ben8 efit management services: 

9 (1) Charge a health plan or payer a different 

10 amount for a prescription drug’s ingredient cost or 

11 dispensing fee than the amount the pharmacy ben12 efit manager reimburses a pharmacy for the pre13 scription drug’s ingredient cost or dispensing fee 

14 where the pharmacy benefit manager retains the 

15 amount of any such difference. 

16 (2) Arbitrarily, unfairly, or deceptively, by con17 tract or any other means, reduce, rescind, or other18 wise claw back any reimbursement payment, in 

19 whole or in part, to a pharmacist or pharmacy for 

20 a prescription drug’s ingredient cost or dispensing 

21 fee. 

22 (3) Arbitrarily, unfairly, or deceptively, by con23 tract or any other means, increase fees or lower re24 imbursement to a pharmacy in order to offset reim25 bursement changes instructed by the Federal GovVerDate Sep 11 2014 05:35 Jun 01, 2022 Jkt 029200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4293.IS S4293

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1 ernment under any health plan funded by the Fed2 eral Government. 

3 (b) EXCEPTIONS.—A pharmacy benefit manager 

4 shall not be in violation of subsection (a) if the pharmacy 

5 benefit manager meets the following conditions: 

6 (1) The pharmacy benefit manager, affiliate, 

7 subsidiary, or agent passes along or returns 100 per8 cent of any price concession to a health plan or 

9 payer, including any rebate, discount, or other price 

10 concession. 

11 (2) The pharmacy benefit manager, affiliate, 

12 subsidiary, or agent provides full and complete dis13 closure of— 

14 (A) the cost, price, and reimbursement of 

15 the prescription drug to each health plan, 

16 payer, and pharmacy with which the pharmacy 

17 benefit manager, affiliate, subsidiary, or agent 

18 has a contract or agreement to provide phar19 macy benefit management services; 

20 (B) each fee, markup, and discount 

21 charged or imposed by the pharmacy benefit 

22 manager, affiliate, subsidiary, or agent to each 

23 health plan, payer, and pharmacy with which 

24 the pharmacy benefit manager, affiliate, subVerDate Sep 11 2014 05:35 Jun 01, 2022 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4293.IS S4293

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1 sidiary, or agent has a contract or agreement 

2 for pharmacy benefit management services; or 

3 (C) the aggregate amount of all remunera4 tion the pharmacy benefit manager receives 

5 from a prescription drug manufacturer for a 

6 prescription drug, including any rebate, dis7 count, administration fee, and any other pay8 ment or credit obtained or retained by the phar9 macy benefit manager, or affiliate, subsidiary, 

10 or agent of the pharmacy benefit manager, pur11 suant to a contract or agreement for pharmacy 

12 benefit management services to a health plan, 

13 payer, or any Federal agency (upon the request 

14 of the agency). 

15 SEC. 3. PROHIBITION ON FALSE INFORMATION. 

16 It shall be unlawful for any person to report informa17 tion related to pharmacy benefit management services to 

18 a Federal department or agency if— 

19 (1) the person knew, or reasonably should have 

20 known, the information to be false or misleading; 

21 (2) the information was required by law to be 

22 reported; and 

23 (3) the false or misleading information reported 

24 by the person would affect analysis or information 

25 compiled by the Federal department or agency for 


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1 statistical or analytical purposes with respect to the 

2 market for pharmacy benefit management services. 

3 SEC. 4. TRANSPARENCY. 

4 (a) REPORTING BY PHARMACY BENEFIT MAN5 AGERS.—Not later than 1 year after the date of enactment 

6 of this Act, and annually thereafter, each pharmacy ben7 efit manager (or affiliate, subsidiary, or agent of a phar8 macy benefit manager) shall report to the Commission the 

9 following information: 

10 (1) The aggregate amount of the difference be11 tween the amount the pharmacy benefit manager 

12 was paid by each health plan and the amount that 

13 the pharmacy benefit manager paid each pharmacy 

14 on behalf of the health plan for prescription drugs. 

15 (2) The aggregate amount of any— 

16 (A) generic effective rate fee charged to 

17 each pharmacy; 

18 (B) direct and indirect remuneration fee 

19 charged or other price concession to each phar20 macy; and 

21 (C) payment rescinded or otherwise clawed 

22 back from a reimbursement made to each phar23 macy. 

24 (3) If, during the reporting year, the pharmacy 

25 benefit manager moved or reassigned a prescription 


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1 drug to a formulary tier that has a higher cost, 

2 higher copayment, higher coinsurance, or higher de3 ductible to a consumer, or a lower reimbursement to 

4 a pharmacy, an explanation of the reason why the 

5 drug was moved or reassigned from 1 tier to an6 other, including whether the move or reassignment 

7 was determined or requested by a prescription drug 

8 manufacturer or other entity. 

9 (4) With respect to any pharmacy benefit man10 ager that owns, controls, or is affiliated with a phar11 macy, a report regarding any difference in reim12 bursement rates or practices, direct and indirect re13 muneration fees or other price concessions, and 

14 clawbacks between a pharmacy that is owned, con15 trolled, or affiliated with the pharmacy benefit man16 ager and any other pharmacy. 

17 (b) REPORT TO CONGRESS.— 

18 (1) IN GENERAL.—Not later than 1 year after 

19 the date of enactment of this Act, and annually 

20 thereafter, the Commission shall submit to the Com21 mittee on Commerce, Science, and Transportation of 

22 the Senate and the Committee on Energy and Com23 merce of the House of Representatives a report that 

24 addresses, at a minimum— 


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1 (A) the number actions brought by the 

2 Commission during the reporting year to en3 force this Act and the outcome of each such en4 forcement action; 

5 (B) the number of open investigations or 

6 inquiries into potential violations of this Act as 

7 of the time the report is submitted; 

8 (C) the number and nature of complaints 

9 received by the Commission relating to an alle10 gation of a violation of this Act during the re11 porting year; 

12 (D) an anonymized summary of the re13 ports filed with the Commission pursuant to 

14 subsection (a) for the reporting year; and 

15 (E) policy or legislative recommendations 

16 to strengthen any enforcement action relating 

17 to a violation of this Act, including rec18 ommendations to include additional prohibited 

19 conducted in section 2(a). 

20 (2) FORMULARY DESIGN OR PLACEMENT PRAC21 TICES.—Not later than 1 year after the date of en22 actment of this Act, the Commission shall submit to 

23 the Committee on Commerce, Science, and Trans24 portation of the Senate and the Committee on En25 ergy and Commerce of the House of Representatives 


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1 a report that addresses the policies, practices, and 

2 role of pharmacy benefit managers (including their 

3 affiliates, subsidiaries, and agents) regarding for4 mulary design or placement, including whether— 

5 (A) pharmacy benefit managers (including 

6 their affiliates, subsidiaries, and agents) use 

7 formulary design or placement to increase their 

8 gross revenue without an accompanying in9 crease in patient access or decrease in patient 

10 cost; or 

11 (B) such policies or practices of pharmacy 

12 benefit managers regarding formulary design or 

13 placement violate section 5(a) of the Federal 

14 Trade Commission Act (45 U.S.C. 45(a)). 

15 (3) CONSTRUCTION.—Nothing in this section 

16 shall be construed as authorizing the Commission to 

17 disclose any information that is a trade secret or 

18 confidential information described in section 

19 552(b)(4) of title 5, United States Code. 

20 SEC. 5. WHISTLEBLOWER PROTECTIONS. 

21 (a) IN GENERAL.—A pharmacy benefit manager, 

22 health plan, pharmaceutical manufacturer, pharmacy, or 

23 any affiliate, subsidiary, or agent thereof shall not, directly 

24 or indirectly, discharge, demote, suspend, diminish, or 

25 withdraw benefits from, threaten, harass, or in any other 


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1 manner discriminate against or adversely impact a covered 

2 individual because— 

3 (1) the covered individual, or anyone perceived 

4 as assisting the covered individual, takes (or is sus5 pected to have taken or will take) a lawful action in 

6 providing to Congress, an agency of the Federal 

7 Government, the attorney general of a State, a State 

8 regulator with authority over the distribution or in9 surance coverage of prescription drugs, or a law en10 forcement agency relating to any act or omission 

11 that the covered individual reasonably believes to be 

12 a violation of this Act; 

13 (2) the covered individual provides information 

14 that the covered individual reasonably believes evi15 dences such a violation to— 

16 (A) a person with supervisory authority 

17 over the covered individual at the pharmacy 

18 benefit manager, health plan, pharmaceutical 

19 manufacturer, pharmacy, or any affiliate, sub20 sidiary, or agent thereof; or 

21 (B) another individual working for the 

22 pharmacy benefit manager, health plan, phar23 maceutical manufacturer, pharmacy, or any af24 filiate, subsidiary, or agent thereof who the cov25 ered individual reasonably believes has the auVerDate Sep 11 2014 05:35 Jun 01, 2022 Jkt 029200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4293.IS S4293

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1 thority to investigate, discover, or terminate the 

2 violation or to take any other action to address 

3 the violation; 

4 (3) the covered individual testifies (or it is sus5 pected that the covered individual will testify) in an 

6 investigation or judicial or administrative proceeding 

7 concerning such a violation; 

8 (4) the covered individual assists or participates 

9 (or it is expected that the covered individual will as10 sist or participate) in such an investigation or judi11 cial or administrative proceeding; or 

12 (5) the covered individual takes any other ac13 tion to assist in carrying out the purposes of this 

14 Act. 

15 (b) ENFORCEMENT.—An individual who alleges any 

16 adverse action in violation of subsection (a) may bring an 

17 action for a jury trial in the appropriate district court of 

18 the United States for the following relief: 

19 (1) Temporary relief while the case is pending. 

20 (2) Reinstatement with the same seniority sta21 tus that the individual would have had, but for the 

22 discharge or discrimination. 

23 (3) Twice the amount of back pay otherwise 

24 owed to the individual, with interest. 


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1 (4) Consequential and compensatory damages, 

2 and compensation for litigation costs, expert witness 

3 fees, and reasonable attorneys’ fees. 

4 (c) WAIVER OF RIGHTS AND REMEDIES.—The rights 

5 and remedies provided for in this section shall not be 

6 waived by any policy form or condition of employment, in7 cluding by a predispute arbitration agreement. 

8 (d) PREDISPUTE ARBITRATION AGREEMENTS.—No 

9 predispute arbitration agreement shall be valid or enforce10 able if the agreement requires arbitration of a dispute 

11 arising under this section. 

12 SEC. 6. ENFORCEMENT. 

13 (a) ENFORCEMENT BY THE COMMISSION.— 

14 (1) UNFAIR AND DECEPTIVE ACTS OR PRAC15 TICES.—A violation of this Act shall be treated as 

16 a violation of a rule defining an unfair or deceptive 

17 act or practice under section 18(a)(1)(B) of the Fed18 eral Trade Commission Act (15 U.S.C. 

19 57a(a)(1)(B)). 

20 (2) POWERS OF THE COMMISSION.— 

21 (A) IN GENERAL.—Except as provided in 

22 subparagraph (C), the Commission shall enforce 

23 this Act in the same manner, by the same 

24 means, and with the same jurisdiction, powers, 

25 and duties as though all applicable terms and 


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1 provisions of the Federal Trade Commission 

2 Act (15 U.S.C. 41 et seq.) were incorporated 

3 into and made a part of this Act. 

4 (B) PRIVILEGES AND IMMUNITIES.—Sub5 ject to paragraph (3), any person who violates 

6 this Act shall be subject to the penalties and 

7 entitled to the privileges and immunities pro8 vided in the Federal Trade Commission Act (15 

9 U.S.C. 41 et. seq.). 

10 (C) NONPROFIT ORGANIZATIONS AND IN11 SURANCE.—Notwithstanding section 4 or 6 of 

12 the Federal Trade Commission Act (15 U.S.C. 

13 44, 46), section 2 of McCarran-Ferguson Act 

14 (15 U.S.C. 1012), or any other jurisdictional 

15 limitation of the Commission, the Commission 

16 shall also enforce this Act, in the same manner 

17 provided in subparagraphs (A) and (B) of this 

18 paragraph, with respect to— 

19 (i) organizations not organized to 

20 carry on business for their own profit or 

21 that of their members; and 

22 (ii) the business of insurance, and 

23 persons engaged in such business. 

24 (D) AUTHORITY PRESERVED.—Nothing in 

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1 thority of the Commission under any other pro2 vision of law. 

3 (3) PENALTIES.— 

4 (A) ADDITIONAL CIVIL PENALTY.—In ad5 dition to any penalty applicable under the Fed6 eral Trade Commission Act (15 U.S.C. 41 et 

7 seq.), any person that violates this Act shall be 

8 liable for a civil penalty of not more than 

9 $1,000,000. 

10 (B) METHOD.—The penalties provided by 

11 subparagraph (A) shall be obtained in the same 

12 manner as civil penalties imposed under section 

13 18(a)(1)(B) of the Federal Trade Commission 

14 Act (15 U.S.C. 57a(a)(1)(B)). 

15 (C) MULTIPLE OFFENSES; MITIGATING

16 FACTORS.—In assessing a penalty under sub17 paragraph (A)— 

18 (i) each day of a continuing violation 

19 shall be considered a separate violation; 

20 and 

21 (ii) the court shall take into consider22 ation, among other factors— 

23 (I) the seriousness of the viola24 tion; 


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1 (II) the efforts of the person 

2 committing the violation to remedy 

3 the harm caused by the violation in a 

4 timely manner; and 

5 (III) whether the violation was 

6 intentional. 

7 (b) ENFORCEMENT BY STATES.— 

8 (1) IN GENERAL.—If the attorney general of a 

9 State has reason to believe that an interest of the 

10 residents of the State has been or is being threat11 ened or adversely affected by a practice that violates 

12 this Act, the attorney general of the State may bring 

13 a civil action on behalf of the residents of the State 

14 in an appropriate district court of the United States 

15 to obtain appropriate relief. 

16 (2) RIGHTS OF THE COMMISSION.— 

17 (A) NOTICE TO THE COMMISSION.— 

18 (i) IN GENERAL.—Except as provided 

19 in clause (iii), the attorney general of a 

20 State, before initiating a civil action under 

21 paragraph (1), shall provide written notifi22 cation to the Commission that the attorney 

23 general intends to bring such civil action. 

24 (ii) CONTENTS.—The notification re25 quired under clause (i) shall include a copy 


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1 of the complaint to be filed to initiate the 

2 civil action. 

3 (iii) EXCEPTION.—If it is not feasible 

4 for the attorney general of a State to pro5 vide the notification required under clause 

6 (i) before initiating a civil action under 

7 paragraph (1), the attorney general shall 

8 notify the Commission immediately upon 

9 instituting the civil action. 

10 (B) INTERVENTION BY THE COMMIS11 SION.—The Commission may— 

12 (i) intervene in any civil action 

13 brought by the attorney general of a State 

14 under paragraph (1); and 

15 (ii) upon intervening— 

16 (I) be heard on all matters aris17 ing in the civil action; and 

18 (II) file petitions for appeal of a 

19 decision in the civil action. 

20 (3) CONSTRUCTION.—Nothing in this sub21 section may be construed to prevent the attorney 

22 general of a State from exercising the powers con23 ferred on the attorney general by the laws of the 

24 State to conduct investigations, to administer oaths 

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1 nesses or the production of documentary or other 

2 evidence. 

3 (4) VENUE; SERVICE OF PROCESS.— 

4 (A) VENUE.—Any action brought under 

5 paragraph (1) may be brought in— 

6 (i) the district court of the United 

7 States that meets applicable requirements 

8 relating to venue under section 1391 of 

9 title 28, United States Code; or 

10 (ii) another court of competent juris11 diction. 

12 (B) SERVICE OF PROCESS.—In an action 

13 brought under paragraph (1), process may be 

14 served in any district in which— 

15 (i) the defendant is an inhabitant, 

16 may be found, or transacts business; or 

17 (ii) venue is proper under section 

18 1391 of title 28, United States Code. 

19 (5) ACTIONS BY OTHER STATE OFFICIALS.— 

20 (A) IN GENERAL.—In addition to a civil 

21 action brought by an attorney general under 

22 paragraph (1), any other officer of a State who 

23 is authorized by the State to do so may bring 

24 a civil action under paragraph (1), subject to 

25 the same requirements and limitations that 


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1 apply under this subsection to civil actions 

2 brought by attorneys general. 

3 (B) SAVINGS PROVISION.—Nothing in this 

4 subsection may be construed to prohibit an au5 thorized official of a State from initiating or 

6 continuing any proceeding in a court of the 

7 State for a violation of any civil or criminal law 

8 of the State. 

9 (c) AFFIRMATIVE DEFENSE.—In an action brought 

10 under this section to enforce section 2, it shall be an af11 firmative defense, on which the defendant has the burden 

12 of persuasion by a preponderance of the evidence, that the 

13 conduct alleged to be a violation of section 2 was 

14 nonpretextual and reasonably necessary to— 

15 (1) prevent a violation of, or comply with, Fed16 eral or State law; 

17 (2) protect patient safety; or 

18 (3) protect patient access. 

19 SEC. 7. EFFECT ON STATE LAWS. 

20 Nothing in this Act shall be construed to preempt, 

21 displace, or supplant any State laws, rules, regulations, 

22 or requirements, or the enforcement thereof. 

23 SEC. 8. DEFINITIONS. 

24 In this Act: 


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1 (1) COMMISSION.—The term ‘‘Commission’’ 

2 means the Federal Trade Commission. 

3 (2) COVERED INDIVIDUAL.—The term ‘‘covered 

4 individual’’ means a current or former employee, 

5 contractor, subcontractor, service provider, or agent 

6 of a pharmacy benefit manager, health plan, phar7 maceutical manufacturer, pharmacy, or any affiliate, 

8 subsidiary, or agent thereof. 

9 (3) HEALTH PLAN.—The term ‘‘health plan’’ 

10 means any group or individual health insurance plan 

11 or coverage, including any health insurance plan or 

12 coverage sponsored or funded by the Federal Gov13 ernment or the government of any State, Territory, 

14 or subdivision thereof. 

15 (4) PHARMACY BENEFIT MANAGER.—The term 

16 ‘‘pharmacy benefit manager’’ means any entity that 

17 provides pharmacy benefit management services on 

18 behalf of a health plan, a payer, or health insurance 

19 issuer. 

20 (5) PHARMACY BENEFIT MANAGEMENT SERV21 ICES.—The term ‘‘pharmacy benefit management 

22 services’’ means, pursuant to a written agreement 

23 with a payer or health plan offering group or indi24 vidual health insurance coverage, directly or through 

25 an intermediary, the service of— 


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1 (A) negotiating terms and conditions, in2 cluding rebates and price concessions, with re3 spect to a prescription drug on behalf of the 

4 health plan, coverage, or payer; or 

5 (B) managing the prescription drug bene6 fits provided by the health plan, coverage, or 

7 payer, which may include formulary manage8 ment the processing and payment of claims for 

9 prescription drugs, the performance of drug uti10 lization review, the processing of drug prior au11 thorization requests, the adjudication of appeals 

12 or grievances related to the prescription drug 

13 benefit, contracting with network pharmacies, 

14 or the provision of related services. 

15 (6) PRESCRIPTION DRUG.—The term ‘‘prescrip16 tion drug’’ means— 

17 (A) a drug, as that term is defined in sec18 tion 201(g) of the Federal Food, Drug, and 

19 Cosmetic Act (21 U.S.C. 321(g)), that is— 

20 (i) approved by the Food and Drug 

21 Administration under section 505 of such 

22 Act (21 U.S.C. 355); and 

23 (ii) subject to the requirements of sec24 tion 503(b)(1) of such Act (21 U.S.C. 

25 353(b)(1)); 


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1 (B) a biological product as that term is de2 fined in section 351 of the Public Health Serv3 ice Act (42 U.S.C. 262(i)(1)); or 

4 (C) a product that is biosimilar to, or 

5 interchangeable with, a biologic product under 

6 section 351 of the Public Health Service Act 

7 (42 U.S.C. 262(i)). 

Æ 


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