Ending the Prescription Drug Kickback Act of 2023

Subjects: Health


<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1217 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                S. 1217

 To prohibit the distribution and receipt of rebates for prescription 
                                 drugs.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 19, 2023

  Mr. Hawley introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
 To prohibit the distribution and receipt of rebates for prescription 
                                 drugs.

    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 ``Ending the Prescription Drug 
Kickback Act of 2023''.

SEC. 2. REQUIREMENTS FOR PRESCRIPTION DRUG BENEFITS.

    (a) Removal of Safe Harbor Protection for Rebates Involving 
Prescription Drugs.--
            (1) Removal of safe harbor protection for rebates involving 
        prescription drugs.--Section 1128B(b) of the Social Security 
        Act (42 U.S.C. 1320a-7b(b)) is amended--
                    (A) in paragraph (3)(A), by striking ``a discount'' 
                and inserting ``subject to paragraph (5), a discount''; 
                and
                    (B) by adding at the end the following:
            ``(5) Removal of safe harbor protection for rebates 
        involving prescription drugs.--
                    ``(A) In general.--The safe harbor described in 
                paragraph (3)(A) shall not apply to a rebate or other 
                remuneration, including a rebate or other remuneration 
                intended to influence formulary tier placement or its 
                equivalent, from a manufacturer of prescription drugs 
                or an entity that provides pharmacy benefits management 
                services.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Entity that provides pharmacy 
                        benefits management services.--The term `entity 
                        that provides pharmacy benefits management 
                        services' means--
                                    ``(I) any person, business, or 
                                other entity that provides, directly or 
                                through an intermediary, the service 
                                of--
                                            ``(aa) negotiating terms 
                                        and conditions with respect to 
                                        a prescription drug on behalf 
                                        of a health plan under a 
                                        Federal health care program; or
                                            ``(bb) managing the 
                                        prescription drug benefits 
                                        provided by the plan, which may 
                                        include formulary management, 
                                        the processing and payment of 
                                        claims for prescription drugs, 
                                        the performance of drug 
                                        utilization review, the 
                                        processing of drug prior 
                                        authorization requests, the 
                                        adjudication of appeals or 
                                        grievances related to the 
                                        prescription drug benefit, 
                                        contracting with network 
                                        pharmacies, or the provision of 
                                        related services; or
                                    ``(II) any entity that is owned, 
                                affiliated, or related under a common 
                                ownership structure with a person, 
                                business, or entity described in 
                                subclause (I).
                            ``(ii) Rebate.--The term `rebate' means any 
                        discount the terms of which are fixed and 
                        disclosed in writing to the buyer at the time 
                        of the purchase to which the discount applies, 
                        but which is not given at the time of 
                        purchase.''.
            (2) Effective date.--The amendments made by this subsection 
        shall take effect on January 1, 2025.
    (b) Requirements for Private Insurance Plans.--
            (1) In general.--Part D of title XXVII of the Public Health 
        Service Act (42 U.S.C. 300gg-111 et seq.) is amended by adding 
        at the end the following:

``SEC. 2799A-11. REQUIREMENTS WITH RESPECT TO PRESCRIPTION DRUG 
              BENEFITS.

    ``(a) In General.--A group health plan or a health insurance issuer 
offering group or individual health insurance coverage shall not, and 
shall ensure that any entity that provides pharmacy benefits management 
services on its behalf does not, receive from a drug manufacturer a 
rebate or other remuneration, including a rebate or other remuneration 
intended to influence formulary tier placement or its equivalent, with 
respect to any prescription drug received by an enrollee in the plan or 
coverage and covered by the plan or coverage.
    ``(b) Definitions.--For purposes of this section--
            ``(1) the term `entity that provides pharmacy benefits 
        management services' means--
                    ``(A) any person, business, or other entity that 
                provides, directly or through an intermediary, the 
                service of--
                            ``(i) negotiating terms and conditions with 
                        respect to a prescription drug on behalf of a 
                        group health plan or group or individual health 
                        insurance coverage; or
                            ``(ii) managing the prescription drug 
                        benefits provided by the plan or coverage, 
                        which may include formulary management, the 
                        processing and payment of claims for 
                        prescription drugs, the performance of drug 
                        utilization review, the processing of drug 
                        prior authorization requests, the adjudication 
                        of appeals or grievances related to the 
                        prescription drug benefit, contracting with 
                        network pharmacies, or the provision of related 
                        services; or
                    ``(B) any entity that is owned, affiliated, or 
                related under a common ownership structure with a 
                person, business, or entity described in paragraph (1); 
                and
            ``(2) the term `rebate' means any discount the terms of 
        which are fixed and disclosed in writing to the buyer at the 
        time of the purchase to which the discount applies, but which 
        is not given at the time of purchase.''.
            (2) ERISA.--
                    (A) In general.--Subpart B of part 7 of subtitle B 
                of title I of the Employee Retirement Income Security 
                Act of 1974 (29 U.S.C. 1185 et seq.) is amended by 
                adding at the end the following:

``SEC. 726. REQUIREMENTS WITH RESPECT TO PRESCRIPTION DRUG BENEFITS.

    ``(a) In General.--A group health plan or a health insurance issuer 
offering group health insurance coverage shall not, and shall ensure 
that any entity that provides pharmacy benefits management services on 
its behalf does not, receive from a drug manufacturer a rebate or other 
remuneration, including a rebate or other remuneration intended to 
influence formulary tier placement or its equivalent, with respect to 
any prescription drug received by an enrollee in the plan or coverage 
and covered by the plan or coverage.
    ``(b) Definitions.--For purposes of this section--
            ``(1) the term `entity that provides pharmacy benefits 
        management services' means--
                    ``(A) any person, business, or other entity that 
                provides, directly or through an intermediary, the 
                service of--
                            ``(i) negotiating terms and conditions with 
                        respect to a prescription drug on behalf of a 
                        group health plan or group health insurance 
                        coverage; or
                            ``(ii) managing the prescription drug 
                        benefits provided by the plan or coverage, 
                        which may include formulary management, the 
                        processing and payment of claims for 
                        prescription drugs, the performance of drug 
                        utilization review, the processing of drug 
                        prior authorization requests, the adjudication 
                        of appeals or grievances related to the 
                        prescription drug benefit, contracting with 
                        network pharmacies, or the provision of related 
                        services; or
                    ``(B) any entity that is owned, affiliated, or 
                related under a common ownership structure with a 
                person, business, or entity described in paragraph (1); 
                and
            ``(2) the term `rebate' means any discount the terms of 
        which are fixed and disclosed in writing to the buyer at the 
        time of the purchase to which the discount applies, but which 
        is not given at the time of purchase.''.
                    (B) Clerical amendment.--The table of contents of 
                the Employee Retirement Income Security Act of 1974 is 
                amended by inserting after the item relating to section 
                725 the following:

``Sec. 726. Requirements with respect to prescription drug benefits.''.
            (3) IRC.--
                    (A) In general.--Subchapter B of chapter 100 of the 
                Internal Revenue Code of 1986 is amended by adding at 
                the end the following:

``SEC. 9826. REQUIREMENTS WITH RESPECT TO PRESCRIPTION DRUG BENEFITS.

    ``(a) In General.--A group health plan shall not, and shall ensure 
that any entity that provides pharmacy benefits management services on 
its behalf does not, receive from a drug manufacturer a rebate or other 
remuneration with respect to any prescription drug received by an 
enrollee in the plan and covered by the plan.
    ``(b) Definitions.--For purposes of this section--
            ``(1) the term `entity that provides pharmacy benefits 
        management services' means--
                    ``(A) any person, business, or other entity that 
                provides, directly or through an intermediary, the 
                service of--
                            ``(i) negotiating terms and conditions with 
                        respect to a prescription drug on behalf of a 
                        group health plan; or
                            ``(ii) managing the prescription drug 
                        benefits provided by the plan, which may 
                        include formulary management, the processing 
                        and payment of claims for prescription drugs, 
                        the performance of drug utilization review, the 
                        processing of drug prior authorization 
                        requests, the adjudication of appeals or 
                        grievances related to the prescription drug 
                        benefit, contracting with network pharmacies, 
                        or the provision of related services; or
                    ``(B) any entity that is owned, affiliated, or 
                related under a common ownership structure with a 
                person, business, or entity described in paragraph (1); 
                and
            ``(2) the term `rebate' means any discount the terms of 
        which are fixed and disclosed in writing to the buyer at the 
        time of the purchase to which the discount applies, but which 
        is not given at the time of purchase.''.
                    (B) Clerical amendment.--The table of sections for 
                subchapter B of chapter 100 of the Internal Revenue 
                Code of 1986 is amended by adding at the end the 
                following:

``Sec. 9826. Requirements with respect to prescription drug 
                            benefits.''.
            (4) Effective date.--The amendments made by paragraphs (1), 
        (2), and (3) shall take effect on January 1, 2025.
                                 &lt;all&gt;
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