I 

118TH CONGRESS 

1ST SESSION H. R. 5385 

To amend title XVIII of the Social Security Act to establish pharmacy 

benefit manager reporting requirements with respect to prescription drug 

plans and MA–PD plans under Medicare part D. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 12, 2023 

Mr. LANDSMAN (for himself and Mrs. HARSHBARGER) 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 establish 

pharmacy benefit manager reporting requirements with 

respect to prescription drug plans and MA–PD plans 

under Medicare part D. 

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 ‘‘Medicare PBM Ac5 countability Act’’. 


ddrumheller on DSK120RN23PROD with BILLS
2 

•HR 5385 IH

1 SEC. 2. PHARMACY BENEFIT MANAGER REPORTING RE2 QUIREMENTS WITH RESPECT TO PRESCRIP3 TION DRUG PLANS AND MA–PD PLANS. 

4 (a) IN GENERAL.— 

5 (1) PRESCRIPTION DRUG PLANS.—Section 

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

7 1395w–112) is amended by adding at the end the 

8 following new subsection: 

9 ‘‘(h) PHARMACY BENEFIT MANAGER REPORTING

10 REQUIREMENTS.—For plan years beginning on or after 

11 January 1, 2026: 

12 ‘‘(1) AGREEMENTS WITH PHARMACY BENEFIT

13 MANAGERS.—Each contract entered into with a 

14 PDP sponsor under this part with respect to a pre15 scription drug plan offered by such sponsor shall 

16 provide that any pharmacy benefit manager acting 

17 on behalf of such sponsor has a written agreement 

18 with the PDP sponsor under which the pharmacy 

19 benefit manager agrees to meet the following re20 quirements: 

21 ‘‘(A) TRANSPARENCY REGARDING GUARAN22 TEES AND COST PERFORMANCE EVALUA23 TIONS.—The pharmacy benefit manager shall— 

24 ‘‘(i) define, interpret, and apply terms 

25 (such as generic drug, brand name drug 

26 (consistent with the definition of those 


ddrumheller on DSK120RN23PROD with BILLS
3 

•HR 5385 IH

1 terms under section 423.4 of title 42, Code 

2 of Federal Regulations, or a successor reg3 ulation), specialty drug, rebate, and dis4 count) in a fully transparent and con5 sistent manner for purposes of calculating 

6 or otherwise evaluating pharmacy benefit 

7 manager performance against pricing guar8 antees or similar cost performance meas9 urements related to rebates, discounts, 

10 price concessions, or net costs; 

11 ‘‘(ii) identify any drugs, claims, or 

12 price concessions excluded from any pric13 ing guarantee or other cost performance 

14 calculation or evaluation in a clear and 

15 consistent manner; and 

16 ‘‘(iii) where a pricing guarantee or 

17 other cost performance measure is based 

18 on a pricing benchmark other than the 

19 wholesale acquisition cost (as defined in 

20 section 1847A(c)(6)(B)) of a drug, cal21 culate and provide a wholesale acquisition 

22 cost-based equivalent to the pricing guar23 antee or other cost performance measure 

24 in the contract. 

25 ‘‘(B) PROVISION OF INFORMATION.— 


ddrumheller on DSK120RN23PROD with BILLS
4 

•HR 5385 IH

1 ‘‘(i) IN GENERAL.—Not later than 

2 July 1 of each year, the pharmacy benefit 

3 manager shall submit to the PDP sponsor, 

4 and to the Secretary upon request, a re5 port, in accordance with this subpara6 graph, and shall make such report avail7 able to the sponsor at no cost to such 

8 sponsor in a machine-readable format and, 

9 as the Secretary may determine, other for10 mats. Each such report shall include, with 

11 respect to such PDP sponsor and each 

12 plan offered by such sponsor, the following 

13 information with respect to the previous 

14 plan year: 

15 ‘‘(I) A list of all drugs covered by 

16 the plan that were dispensed includ17 ing, with respect to each such drug— 

18 ‘‘(aa) the brand name, ge19 neric or non-proprietary name, 

20 and National Drug Code; 

21 ‘‘(bb) the number of plan 

22 enrollees for whom the drug was 

23 dispensed, the total number of 

24 prescription claims for the drug 

25 (including original prescriptions 


ddrumheller on DSK120RN23PROD with BILLS
5 

•HR 5385 IH

1 and refills, counted as separate 

2 claims), and the total number of 

3 dosage units of the drug dis4 pensed; 

5 ‘‘(cc) the number of claims 

6 described in item (bb) that were 

7 dispensed using each type of dis8 pensing channel, including retail, 

9 mail order, specialty pharmacy, 

10 or other types of pharmacies or 

11 providers as defined by the phar12 macy benefit manager; 

13 ‘‘(dd) the average wholesale 

14 acquisition cost, listed as cost per 

15 day’s supply, cost per dosage 

16 unit, and cost per typical course 

17 of treatment (as applicable); 

18 ‘‘(ee) the average wholesale 

19 price for the drug, listed as cost 

20 per day’s supply, cost per dosage 

21 unit, and cost per typical course 

22 of treatment (as applicable); 

23 ‘‘(ff) the total out-of-pocket 

24 spending by plan enrollees on 

25 such drug after application of 


ddrumheller on DSK120RN23PROD with BILLS
6 

•HR 5385 IH

1 any benefits under the plan, in2 cluding plan enrollee spending 

3 through copayments, coinsurance, 

4 and deductibles; 

5 ‘‘(gg) total rebates paid by 

6 the manufacturer on the drug as 

7 reported under the Detailed DIR 

8 Report (or any successor report) 

9 submitted by such sponsor to the 

10 Centers for Medicare & Medicaid 

11 Services; 

12 ‘‘(hh) all other direct or in13 direct remuneration on the drug 

14 as reported under the Detailed 

15 DIR Report (or any successor re16 port) submitted by such sponsor 

17 to the Centers for Medicare & 

18 Medicaid Services; 

19 ‘‘(ii) the average pharmacy 

20 reimbursement amount charged 

21 to the plan for the drug by dis22 pensing channel identified in item 

23 (cc); 

24 ‘‘(jj) the average National 

25 Average Drug Acquisition Cost 


ddrumheller on DSK120RN23PROD with BILLS
7 

•HR 5385 IH

1 (NADAC) for retail community 

2 pharmacies; and 

3 ‘‘(kk) total manufacturer-de4 rived revenue, inclusive of bona 

5 fide service fees, retained by the 

6 pharmacy benefit manager and 

7 any affiliate of such pharmacy 

8 benefit manager attributable to 

9 the drug. 

10 ‘‘(II) In the case of a pharmacy 

11 benefit manager that has an affiliate 

12 that is a retail, mail order, or spe13 cialty pharmacy, with respect to drugs 

14 covered by such plan that were dis15 pensed, the following information: 

16 ‘‘(aa) The percentage of 

17 total prescriptions that were dis18 pensed by pharmacies that are an 

19 affiliate of the pharmacy benefit 

20 manager for each drug. 

21 ‘‘(bb) The interquartile 

22 range of the total combined costs 

23 paid by the plan and plan enroll24 ees, per dosage unit, per course 

25 of treatment, per 30-day supply, 


ddrumheller on DSK120RN23PROD with BILLS
8 

•HR 5385 IH

1 and per 90-day supply for each 

2 drug dispensed by pharmacies 

3 that are not with an affiliate of 

4 the pharmacy benefit manager 

5 and that are included in the 

6 pharmacy network of such plan. 

7 ‘‘(cc) The interquartile 

8 range of the total combined costs 

9 paid by the plan and plan enroll10 ees, per dosage unit, per course 

11 of treatment, per 30-day supply, 

12 and per 90-day supply for each 

13 drug dispensed by pharmacies 

14 that are an affiliate of the phar15 macy benefit manager that are 

16 included in the pharmacy net17 work of such plan. 

18 ‘‘(dd) The lowest total com19 bined cost paid by the plan and 

20 plan enrollees, per dosage unit, 

21 per course of treatment, per 30- 

22 day supply, and per 90-day sup23 ply, for each drug that is avail24 able from any pharmacy included 

25 in the network of the plan. 


ddrumheller on DSK120RN23PROD with BILLS
9 

•HR 5385 IH

1 ‘‘(ee) The difference between 

2 the average acquisition cost of 

3 the affiliate that initially acquires 

4 the drug and the amount re5 ported under subclause (I)(jj) for 

6 each drug. 

7 ‘‘(ff) A list of prescription 

8 drugs for which the pharmacy 

9 benefit manager or an affiliate of 

10 the pharmacy benefit manager 

11 had a contract or other arrange12 ment with a covered entity under 

13 section 340B of the Public 

14 Health Service Act in the service 

15 area of such plan. 

16 ‘‘(III) Where a drug approved 

17 under section 505(c) of the Federal 

18 Food, Drug, and Cosmetic Act (re19 ferred to in this subclause as the ‘list20 ed drug’) is covered by the plan, the 

21 following information: 

22 ‘‘(aa) A list of currently 

23 marketed generic drugs approved 

24 under section 505(j) of the Fed25 eral Food, Drug, and Cosmetic 


ddrumheller on DSK120RN23PROD with BILLS
10 

•HR 5385 IH

1 Act pursuant to an application 

2 that references such listed drug 

3 that are not covered by the plan, 

4 are covered on a formulary tier 

5 typically associated with higher 

6 cost-sharing than the listed drug, 

7 or are subject to utilization man8 agement that the listed drug is 

9 not subject to. 

10 ‘‘(bb) The estimated average 

11 beneficiary cost-sharing under 

12 the plan for a 30-day supply of 

13 the listed drug. 

14 ‘‘(cc) The estimated average 

15 cost-sharing that a beneficiary 

16 would have paid for a 30-day 

17 supply of each of the generic 

18 drugs described in item (aa), had 

19 the plan provided coverage for 

20 such drugs on the same for21 mulary tier as the listed drug. 

22 ‘‘(dd) A written justification 

23 for providing more favorable cov24 erage of the listed drug than the 


ddrumheller on DSK120RN23PROD with BILLS
11 

•HR 5385 IH

1 generic drugs described in item 

2 (aa). 

3 ‘‘(IV) Where a reference product 

4 (as defined in section 351(i) of the 

5 Public Health Service Act) is covered 

6 by the plan, the following information: 

7 ‘‘(aa) A list of currently 

8 marketed biosimilar biological 

9 products licensed under section 

10 351(k) of the Public Health 

11 Service Act pursuant to an appli12 cation that refers to such ref13 erence product that are not cov14 ered by the plan, are covered on 

15 a formulary tier typically associ16 ated with higher cost-sharing 

17 than the reference product, or 

18 are subject to utilization manage19 ment that the reference product 

20 is not subject to. 

21 ‘‘(bb) The estimated average 

22 beneficiary cost-sharing under 

23 the plan for a 30-day supply of 

24 the reference product. 


ddrumheller on DSK120RN23PROD with BILLS
12 

•HR 5385 IH

1 ‘‘(cc) The estimated average 

2 cost-sharing that a beneficiary 

3 would have paid for a 30-day 

4 supply of each of the biosimilar 

5 biological products described in 

6 item (aa), had the plan provided 

7 coverage for such products on the 

8 same formulary tier as the ref9 erence product. 

10 ‘‘(dd) A written justification 

11 for providing more favorable cov12 erage of the reference product 

13 than the biosimilar biological 

14 product described in item (aa). 

15 ‘‘(V) Total gross spending on 

16 prescription drugs by the plan, not 

17 net of rebates, fees, discounts, or 

18 other direct or indirect remuneration. 

19 ‘‘(VI) The total amount retained 

20 by the pharmacy benefit manager or 

21 an affiliate of such pharmacy benefit 

22 manager in revenue related to utiliza23 tion of prescription drugs under that 

24 plan, inclusive of bona fide service 

25 fees. 


ddrumheller on DSK120RN23PROD with BILLS
13 

•HR 5385 IH

1 ‘‘(VII) The total spending on 

2 prescription drugs net of rebates, fees, 

3 discounts, or other direct and indirect 

4 remuneration by the plan. 

5 ‘‘(VIII) An explanation of any 

6 benefit design parameters under such 

7 plan that encourage plan enrollees to 

8 fill prescriptions at pharmacies that 

9 are an affiliate of such pharmacy ben10 efit manager, such as mail and spe11 cialty home delivery programs, and re12 tail and mail auto-refill programs. 

13 ‘‘(IX) A list of all brokers, con14 sultants, advisors, and auditors that 

15 receive compensation from the phar16 macy benefit manager or an affiliate 

17 of such pharmacy benefit manager for 

18 referrals, consulting, auditing, or 

19 other services offered to PDP spon20 sors related to pharmacy benefit man21 agement services. 

22 ‘‘(X) A list of all pharmacies, 

23 wholesalers, distributors, private label24 ers, providers, group purchasing orga25 nizations, health plans, or any other 


ddrumheller on DSK120RN23PROD with BILLS
14 

•HR 5385 IH

1 entity that is an affiliate of the phar2 macy benefit manager. 

3 ‘‘(XI) A summary document sub4 mitted in a standardized template de5 veloped by the Secretary that includes 

6 such information described in sub7 clauses (I) through (X). 

8 ‘‘(ii) STANDARD FORMATS.—Not later 

9 than June 1, 2025, the Secretary shall 

10 specify standard formats for pharmacy 

11 benefit managers to submit annual reports 

12 required under clause (i). 

13 ‘‘(iii) CONFIDENTIALITY.— 

14 ‘‘(I) IN GENERAL.—Information 

15 disclosed by a pharmacy benefit man16 ager or PDP sponsor under this sub17 section that is not otherwise publicly 

18 available shall not be disclosed by the 

19 Secretary or a PDP sponsor receiving 

20 the information, except that the Sec21 retary may disclose the information 

22 for the following purposes: 

23 ‘‘(aa) As the Secretary de24 termines to be necessary to carry 

25 out this part. 


ddrumheller on DSK120RN23PROD with BILLS
15 

•HR 5385 IH

1 ‘‘(bb) To permit the Comp2 troller General to review the in3 formation provided. 

4 ‘‘(cc) To permit the Director 

5 of the Congressional Budget Of6 fice to review the information 

7 provided. 

8 ‘‘(dd) To permit the Execu9 tive Director of the Medicare 

10 Payment Advisory Commission to 

11 review the information provided. 

12 ‘‘(ee) To the Attorney Gen13 eral for the purposes of con14 ducting oversight and enforce15 ment under this title. 

16 ‘‘(II) RESTRICTION ON USE OF

17 INFORMATION.—The Secretary, the 

18 Comptroller General, the Director of 

19 the Congressional Budget Office, and 

20 the Executive Director of the Medi21 care Payment Advisory Commission 

22 shall not report on or disclose infor23 mation disclosed pursuant to sub24 clause (I) to the public in a manner 

25 that would identify a specific pharVerDate Sep 11 2014 02:47 Sep 13, 2023 Jkt 039200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\H5385.IH H5385

ddrumheller on DSK120RN23PROD with BILLS
16 

•HR 5385 IH

1 macy benefit manager, affiliate, PDP 

2 sponsor, or plan, or prices charged for 

3 specific drugs. 

4 ‘‘(C) AUDIT RIGHTS.— 

5 ‘‘(i) IN GENERAL.—Not less than once 

6 a year, at the request of the PDP sponsor, 

7 the pharmacy benefit manager shall allow 

8 for an audit of the pharmacy benefit man9 ager to ensure compliance with all terms 

10 and conditions under the contract and the 

11 accuracy of information reported under 

12 subparagraph (B). 

13 ‘‘(ii) AUDITOR.—The PDP sponsor 

14 shall have the right to select an auditor. 

15 The pharmacy benefit manager shall not 

16 impose any limitations on the selection of 

17 such auditor. 

18 ‘‘(iii) PROVISION OF INFORMATION.— 

19 The pharmacy benefit manager shall make 

20 available to such auditor all records, data, 

21 contracts, and other information necessary 

22 to confirm the accuracy of information 

23 provided under subparagraph (B), subject 

24 to reasonable restrictions on how such in25 formation must be reported (as determined 


ddrumheller on DSK120RN23PROD with BILLS
17 

•HR 5385 IH

1 by the Secretary) to prevent redisclosure of 

2 such information. 

3 ‘‘(iv) TIMING.—The pharmacy benefit 

4 manager must provide information under 

5 clause (iii) and other information, data, 

6 and records relevant to the audit to such 

7 auditor within 6 months of the initiation of 

8 the audit and respond to requests for addi9 tional information from such auditor with10 in 30 days after the request for additional 

11 information. 

12 ‘‘(v) INFORMATION FROM AFFILI13 ATES.—The pharmacy benefit manager 

14 shall be responsible for providing to such 

15 auditor information required to be reported 

16 under subparagraph (B) that is owned or 

17 held by an affiliate of such pharmacy ben18 efit manager. 

19 ‘‘(D) ENFORCEMENT.—The pharmacy ben20 efit manager shall— 

21 ‘‘(i) reimburse the PDP sponsor for 

22 any civil money penalty imposed on the 

23 PDP sponsor as a result of the failure of 

24 the pharmacy benefit manager to meet the 

25 requirements of this paragraph that are 


ddrumheller on DSK120RN23PROD with BILLS
18 

•HR 5385 IH

1 applicable to the pharmacy benefit man2 ager under the agreement; and 

3 ‘‘(ii) be subject to punitive remedies 

4 for breach of contract for failure to comply 

5 with the requirements applicable under this 

6 paragraph. 

7 ‘‘(2) CERTIFICATION OF COMPLIANCE.—Each 

8 PDP sponsor shall furnish to the Secretary (in a 

9 time and manner specified by the Secretary) an an10 nual certification of compliance with this subsection, 

11 as well as such information as the Secretary deter12 mines necessary to carry out this subsection. 

13 ‘‘(3) DEFINITIONS.—For purposes of this sub14 section: 

15 ‘‘(A) AFFILIATE.—The term ‘affiliate’ 

16 means any entity that is owned by, controlled 

17 by, or related under a common ownership struc18 ture with a pharmacy benefit manager (includ19 ing an entity owned or controlled by the PDP 

20 sponsor) or that acts as a contractor or agent 

21 to such pharmacy benefit manager, insofar as 

22 such contractor or agent performs any of the 

23 functions described under subparagraph (B). 

24 ‘‘(B) PHARMACY BENEFIT MANAGER.—The 

25 term ‘pharmacy benefit manager’ means any 


ddrumheller on DSK120RN23PROD with BILLS
19 

•HR 5385 IH

1 person or entity that, either directly or through 

2 an intermediary, acts as a price negotiator or 

3 group purchaser on behalf of a PDP sponsor or 

4 prescription drug plan, or manages the pre5 scription drug benefits provided by such spon6 sor or plan, including the processing and pay7 ment of claims for prescription drugs, the per8 formance of drug utilization review, the proc9 essing of drug prior authorization requests, the 

10 adjudication of appeals or grievances related to 

11 the prescription drug benefit, contracting with 

12 network pharmacies, controlling the cost of cov13 ered part D drugs, or the provision of services 

14 related thereto. Such term includes any person 

15 or entity that carries out one or more of the ac16 tivities described in the preceding sentence, ir17 respective of whether such person or entity calls 

18 itself a ‘pharmacy benefit manager’.’’. 

19 (2) MA–PD PLANS.—Section 1857(f)(3) of the 

20 Social Security Act (42 U.S.C. 1395w–27(f)(3)) is 

21 amended by adding at the end the following new 

22 subparagraph: 

23 ‘‘(F) PHARMACY BENEFIT MANAGER RE24 PORTING REQUIREMENTS.—For plan years beVerDate Sep 11 2014 02:47 Sep 13, 2023 Jkt 039200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\H5385.IH H5385

ddrumheller on DSK120RN23PROD with BILLS
20 

•HR 5385 IH

1 ginning on or after January 1, 2026, section 

2 1860D–12(h).’’. 

3 (b) GAO STUDY AND REPORT ON CERTAIN REPORT4 ING REQUIREMENTS.— 

5 (1) STUDY.—The Comptroller General of the 

6 United States (in this subsection referred to as the 

7 ‘‘Comptroller General’’) shall conduct a study on 

8 Federal and State reporting requirements for health 

9 plans and pharmacy benefit managers related to the 

10 transparency of prescription drug costs and prices. 

11 Such study shall include an analysis of the following: 

12 (A) Federal statutory and regulatory re13 porting requirements for health plans and phar14 macy benefit managers related to prescription 

15 drug costs and prices. 

16 (B) State statutory and regulatory report17 ing requirements for health plans and pharmacy 

18 benefit managers related to prescription drug 

19 costs and prices. 

20 (C) The extent to which the statutory and 

21 regulatory reporting requirements identified in 

22 clauses (i) and (ii) overlap and conflict. 

23 (D) The resources required by health plans 

24 and pharmacy benefit managers to comply with 


ddrumheller on DSK120RN23PROD with BILLS
21 

•HR 5385 IH

1 the reporting requirements described in clauses 

2 (i) and (ii). 

3 (E) Other items determined appropriate by 

4 the Comptroller General. 

5 (2) REPORT.—Not later than 2 years after en6 actment, the Comptroller General shall submit to 

7 Congress a report containing the results of the study 

8 conducted under paragraph (1), together with rec9 ommendations for legislation and administrative ac10 tions that would streamline and reduce the burden 

11 associated with the reporting requirements for 

12 health plans and pharmacy benefit managers de13 scribed in paragraph (1). 

Æ 


ddrumheller on DSK120RN23PROD with BILLS