Protecting Patients Against PBM Abuses Act

Subjects: Health


<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2880 Introduced in House (IH)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                H. R. 2880

 To amend title XVIII of the Social Security Act to establish certain 
requirements for pharmacy benefit managers under part D of the Medicare 
                                program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 26, 2023

     Mr. Carter of Georgia (for himself, Ms. Blunt Rochester, Ms. 
Malliotakis, and Mr. Auchincloss) 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 certain 
requirements for pharmacy benefit managers under part D of the Medicare 
                                program.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protecting Patients Against PBM 
Abuses Act''.

SEC. 2. ESTABLISHING CERTAIN REQUIREMENTS FOR PHARMACY BENEFIT MANAGERS 
              UNDER PART D OF THE MEDICARE PROGRAM.

    (a) Prescription Drug Plans.--Section 1860D-12(b) of the Social 
Security Act (42 U.S.C. 1395w-112(b)) is amended by adding at the end 
the following new paragraph:
            ``(9) Responsibility of pharmacy benefit managers.--
                    ``(A) In general.--Each contract entered into with 
                a PDP sponsor under this part with respect to a 
                prescription drug plan offered by such sponsor shall 
                provide that any pharmacy benefit manager acting on 
                behalf of such sponsor complies with the following 
                provisions:
                            ``(i) The pharmacy benefit manager derives 
                        no income with respect to any services provided 
                        in connection with covered part D drugs 
                        furnished under such plan from any entity other 
                        than flat dollar amount service fees.
                            ``(ii) The pharmacy benefit manager 
                        receives such service fees only pursuant to a 
                        written agreement between the manager and such 
                        sponsor that sets forth the amount of any such 
                        fees. Any such fee may not be directly or 
                        indirectly based on, or contingent upon--
                                    ``(I) the price of any covered part 
                                D drug;
                                    ``(II) discounts, rebates, fees, or 
                                other remuneration with respect to such 
                                drugs; or
                                    ``(III) any other circumstance 
                                specified by the Secretary.
                            ``(iii) With respect to a covered part D 
                        drug dispensed by a pharmacy, the pharmacy 
                        benefit manager may not charge such sponsor a 
                        different amount for such drug's ingredient 
                        cost or dispensing fee than the amount the 
                        pharmacy benefit manager reimburses such 
                        pharmacy for such drug's ingredient cost or 
                        dispensing fee.
                            ``(iv) With respect to a covered part D 
                        drug dispensed by a network pharmacy, the 
                        pharmacy benefit manager may not reimburse such 
                        pharmacy an amount less than the amount the 
                        pharmacy benefit manager would reimburse an 
                        affiliated pharmacy for such drug.
                            ``(v) With respect to each covered part D 
                        drug included on the formulary of such plan for 
                        which there is a drug that is not included on 
                        such formulary with a therapeutic equivalence 
                        rating of AB (as established pursuant to 
                        section 505(j)(7) of the Federal Food, Drug, 
                        and Cosmetic Act) in the same therapeutic class 
                        or category of such covered part D drug, the 
                        pharmacy benefit manager shall submit to such 
                        plan a report specifying the difference between 
                        the national average drug acquisition cost (as 
                        published by the Secretary) for such drug not 
                        included in such formulary and the negotiated 
                        prices for such drug that is included in such 
                        formulary.
                    ``(B) Certification.--Each PDP sponsor (and each 
                pharmacy benefit manager providing services under a 
                prescription drug plan furnished by such sponsor) shall 
                furnish to the Secretary (in a time and manner 
                specified by the Secretary) an annual certification of 
                compliance with this paragraph, as well as such 
                information as the Secretary determines necessary to 
                carry out this paragraph.
                    ``(C) Disgorgement of prohibited payments.--A 
                pharmacy benefit manager shall disgorge to the 
                Secretary any payment, remuneration, or other amount 
                received in violation of this paragraph or the contract 
                entered into with a PDP sponsor under this part with 
                respect to a prescription drug plan. A PDP sponsor 
                shall suspend payments to a pharmacy benefit manager 
                for failure to disgorge such amounts pursuant to the 
                preceding sentence or for other violations of this 
                paragraph.
                    ``(D) Clarification.--The requirements of this 
                paragraph shall apply regardless of whether a PDP 
                sponsor is acting as its own pharmacy benefit manager 
                and regardless of whether a pharmacy benefit manager is 
                under common ownership or control of the PDP sponsor 
                with respect to which the manager is furnishing 
                services.
                    ``(E) Definitions.--For purposes of this paragraph:
                            ``(i) Affiliated pharmacy.--The term 
                        `affiliated pharmacy' means, with respect to a 
                        pharmacy benefit manager, a pharmacy that 
                        directly or indirectly through one or more 
                        intermediaries is owned by, controlled by, or 
                        is under common ownership or control of such 
                        manager, or a pharmacy in which such manager 
                        has a financial interest.
                            ``(ii) Pharmacy benefit manager.--The term 
                        `pharmacy benefit manager' means any entity 
                        (and any affiliate, subsidiary, or agent of 
                        such entity) that, pursuant to an agreement 
                        with a PDP sponsor either directly or through 
                        an intermediary acts as a price negotiator or 
                        group purchaser on behalf of such sponsor, or 
                        manages the prescription drug benefits provided 
                        by such sponsor, including by processing and 
                        paying claims for covered part D drugs, 
                        performing drug utilization review, processing 
                        drug prior authorization requests, adjudicating 
                        appeals or grievances related to covered part D 
                        drugs, contracting with network pharmacies, 
                        controlling the cost of such drugs, or 
                        providing any related services.
                    ``(F) Nondisclosure of certain information.--
                Nothing in this paragraph shall be construed to require 
                public disclosure of any information that is a trade 
                secret or confidential information (as described in 
                section 552(b)(4) of title 5, United States Code).''.
    (b) MA-PD Plans.--Section 1857(f)(3) of the Social Security Act (42 
U.S.C. 1395w-27(f)(3)) is amended by adding at the end the following 
new subparagraph:
                    ``(F) Responsibility of pharmacy benefit 
                managers.--Section 1860D-12(b)(9).''.

SEC. 3. CONFLICT OF INTEREST.

    Section 1860D-4(b)(3)(A)(ii)(I) of the Social Security Act (42 
U.S.C. 1395w-104(b)(3)(A)(ii)(I)) is amended by striking ``with respect 
to the sponsor and plan'' and replacing it with ``with respect to the 
sponsor, plan, and any pharmacy benefit manager furnishing services to 
such sponsor or plan''.

SEC. 4. PBM TRANSPARENCY.

    Section 1150A of the Social Security Act (42 U.S.C. 1320b-23) is 
amended--
            (1) in subsection (b), by adding at the end the following 
        new paragraph:
            ``(4) In the case of the provision of information by a PBM 
        that manages prescription drug coverage under a contract with a 
        sponsor described in subsection (a)(1) for a plan so 
        described--
                    ``(A) the aggregate dollar amount of all rebates 
                that the PBM received with respect to drugs furnished 
                under such plan from drug manufacturers;
                    ``(B) the aggregate dollar amount of all 
                administrative fees that the PBM received with respect 
                to drugs furnished under such plan from drug 
                manufacturers;
                    ``(C) the aggregate dollar amount of all rebates 
                described in subparagraph (A) that the PBM did not pass 
                through to such sponsor;
                    ``(D) the percentage of the aggregate dollar amount 
                of all rebates described in subparagraph (A) that the 
                PBM did not pass through to such sponsor; and
                    ``(E) with respect to all plans described in 
                subsection (a)(1) for which the PBM manages 
                prescription drug coverage, the highest percentage 
                calculated under subparagraph (D) and the lowest such 
                percentage.'';
            (2) by redesignating subsections (c) and (d) as subsections 
        (d) and (e), respectively; and
            (3) by inserting after subsection (b), the following new 
        subsection:
    ``(c) Publication of Part D Information.--The Secretary shall 
publish, not less frequently than annually, the information reported 
under subsection (b) by or on behalf of sponsors described in 
subsection (a)(1) on a publicly available website, provided that such 
information shall be made available in a form that does not disclose 
the identity of a specific plan, the prices charged for specific drugs 
or classes of drugs, or the amount of any rebates provided for specific 
drugs or classes of drugs.''.

SEC. 5. EFFECTIVE DATE.

    The amendments made by this Act shall take effect January 1, 2024.

SEC. 6. REGULATIONS.

    Notwithstanding any other provision of law, the Secretary shall 
initially implement the amendments made by this Act through interim 
final regulations.
                                 &lt;all&gt;
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