875 
required with respect to any group health plan 
established by a plan sponsor that is, or is af-
filiated with, a drug manufacturer, drug whole-
saler, or other direct participant in the drug 
supply chain, in order to prevent anti-competi-
tive behavior. 
‘‘(5) STANDARD FORMAT AND REGULATIONS.— 
‘‘(A) IN
GENERAL.—Not later than 18 
months after the date of enactment of this sec-
tion, the Secretary shall specify through rule-
making a standard format for entities providing 
pharmacy benefit management services on be-
half of group health plans and health insurance 
issuers offering group health insurance cov-
erage, to submit reports required under para-
graph (1). 
‘‘(B) 
ADDITIONAL
REGULATIONS.—Not 
later than 18 months after the date of enact-
ment of this section, the Secretary shall, 
through rulemaking, promulgate any other final 
regulations necessary to implement the require-
ments of this section. In promulgating such 
regulations, the Secretary shall, to the extent 
practicable, align the reporting requirements 
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876 
under this section with the reporting require-
ments under section 2799A–10. 
‘‘(c) REQUIREMENT TO PROVIDE INFORMATION TO 
PARTICIPANTS OR BENEFICIARIES.—A group health plan, 
including with respect to group health insurance coverage 
offered in connection with a group health plan, upon re-
quest of a participant or beneficiary, shall provide to such 
participant or beneficiary— 
‘‘(1) the summary document described in sub-
section (b)(2)(B)(ii); and 
‘‘(2) the information described in subsection 
(b)(2)(A)(i)(III) with respect to a claim made by or 
on behalf of such participant or beneficiary. 
‘‘(d) ENFORCEMENT.— 
‘‘(1) IN GENERAL.—The Secretary shall enforce 
this section. The enforcement authority under this 
subsection shall apply only with respect to group 
health plans (including group health insurance cov-
erage offered in connection with such a plan) to 
which the requirements of subparts I and II of part 
A and part D apply in accordance with section 2722, 
and with respect to entities providing pharmacy ben-
efit management services on behalf of such plans 
and applicable entities providing services on behalf 
of such plans. 
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877 
‘‘(2) FAILURE TO PROVIDE INFORMATION.—A 
group health plan, a health insurance issuer offering 
group health insurance coverage, an entity providing 
pharmacy benefit management services on behalf of 
such a plan or issuer, or an applicable entity pro-
viding services on behalf of such a plan or issuer 
that violates subsection (a); an entity providing 
pharmacy benefit management services on behalf of 
such a plan or issuer that fails to provide the infor-
mation required under subsection (b); or a group 
health plan that fails to provide the information re-
quired under subsection (c), shall be subject to a 
civil monetary penalty in the amount of $10,000 for 
each day during which such violation continues or 
such information is not disclosed or reported. 
‘‘(3) FALSE INFORMATION.—A health insurance 
issuer, an entity providing pharmacy benefit man-
agement services, or a third party administrator pro-
viding services on behalf of such issuer offered by a 
health insurance issuer that knowingly provides false 
information under this section shall be subject to a 
civil monetary penalty in an amount not to exceed 
$100,000 for each item of false information. Such 
civil monetary penalty shall be in addition to other 
penalties as may be prescribed by law. 
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878 
‘‘(4) PROCEDURE.—The provisions of section 
1128A of the Social Security Act, other than sub-
sections (a) and (b) and the first sentence of sub-
section (c)(1) of such section shall apply to civil 
monetary penalties under this subsection in the 
same manner as such provisions apply to a penalty 
or proceeding under such section. 
‘‘(5) WAIVERS.—The Secretary may waive pen-
alties under paragraph (2), or extend the period of 
time for compliance with a requirement of this sec-
tion, for an entity in violation of this section that 
has made a good-faith effort to comply with the re-
quirements in this section. 
‘‘(e) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to permit a health insurance issuer, 
group health plan, entity providing pharmacy benefit man-
agement services on behalf of a group health plan or 
health insurance issuer, or other entity to restrict disclo-
sure to, or otherwise limit the access of, the Secretary to 
a report described in subsection (b)(1) or information re-
lated to compliance with subsections (a), (b), (c), or (d) 
by such issuer, plan, or entity. 
‘‘(f) DEFINITIONS.—In this section: 
‘‘(1) APPLICABLE ENTITY.—The term ‘applica-
ble entity’ means— 
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879 
‘‘(A) an applicable group purchasing orga-
nization, drug manufacturer, distributor, whole-
saler, rebate aggregator (or other purchasing 
entity designed to aggregate rebates), or associ-
ated third party; 
‘‘(B) any subsidiary, parent, affiliate, or 
subcontractor of a group health plan, health in-
surance issuer, entity that provides pharmacy 
benefit management services on behalf of such 
a plan or issuer, or any entity described in sub-
paragraph (A); or 
‘‘(C) such other entity as the Secretary 
may specify through rulemaking. 
‘‘(2) APPLICABLE GROUP PURCHASING ORGANI-
ZATION.—The term ‘applicable group purchasing or-
ganization’ means a group purchasing organization 
that is affiliated with or under common ownership 
with an entity providing pharmacy benefit manage-
ment services. 
‘‘(3) CONTRACTED COMPENSATION.—The term 
‘contracted compensation’ means the sum of any in-
gredient cost and dispensing fee for a drug (inclusive 
of the out-of-pocket costs to the participant or bene-
ficiary), or another analogous compensation struc-
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880 
ture that the Secretary may specify through regula-
tions. 
‘‘(4) GROSS
SPENDING.—The term ‘gross 
spending’, with respect to prescription drug benefits 
under a group health plan or health insurance cov-
erage, means the amount spent by a group health 
plan or health insurance issuer on prescription drug 
benefits, calculated before the application of rebates, 
fees, alternative discounts, or other remuneration. 
‘‘(5) NET SPENDING.—The term ‘net spending’, 
with respect to prescription drug benefits under a 
group health plan or health insurance coverage, 
means the amount spent by a group health plan or 
health insurance issuer on prescription drug bene-
fits, calculated after the application of rebates, fees, 
alternative discounts, or other remuneration. 
‘‘(6) PLAN SPONSOR.—The term ‘plan sponsor’ 
has the meaning given such term in section 3(16)(B) 
of the Employee Retirement Income Security Act of 
1974. 
‘‘(7) REMUNERATION.—The term ‘remunera-
tion’ has the meaning given such term by the Sec-
retary through rulemaking, which shall be reevalu-
ated by the Secretary every 5 years. 
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881 
‘‘(8) SPECIFIED LARGE EMPLOYER.—The term 
‘specified large employer’ means, in connection with 
a group health plan (including group health insur-
ance coverage offered in connection with such a 
plan) established or maintained by a single em-
ployer, with respect to a calendar year or a plan 
year, as applicable, an employer who employed an 
average of at least 100 employees on business days 
during the preceding calendar year or plan year and 
who employs at least 1 employee on the first day of 
the calendar year or plan year. 
‘‘(9) SPECIFIED LARGE PLAN.—The term ‘spec-
ified large plan’ means a group health plan (includ-
ing group health insurance coverage offered in con-
nection with such a plan) established or maintained 
by a plan sponsor described in clause (ii) or (iii) of 
section 3(16)(B) of the Employee Retirement In-
come Security Act of 1974 that had an average of 
at least 100 participants on business days during 
the preceding calendar year or plan year, as applica-
ble. 
‘‘(10) WHOLESALE
ACQUISITION
COST.—The 
term ‘wholesale acquisition cost’ has the meaning 
given such term in section 1847A(c)(6)(B) of the 
Social Security Act.’’; and 
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882 
(2) in section 2723 (42 U.S.C. 300gg–22)— 
(A) in subsection (a)— 
(i) in paragraph (1), by inserting 
‘‘(other than section 2799A–11)’’ after 
‘‘part D’’; and 
(ii) in paragraph (2), by inserting 
‘‘(other than section 2799A–11)’’ after 
‘‘part D’’; and 
(B) in subsection (b)— 
(i) in paragraph (1), by inserting 
‘‘(other than section 2799A–11)’’ after 
‘‘part D’’; 
(ii) in paragraph (2)(A), by inserting 
‘‘(other than section 2799A–11)’’ after 
‘‘part D’’; and 
(iii) in paragraph (2)(C)(ii), by insert-
ing ‘‘(other than section 2799A–11)’’ after 
‘‘part D’’. 
(b) EMPLOYEE RETIREMENT INCOME SECURITY ACT 
OF 1974.— 
(1) IN GENERAL.—Subtitle B of title I of the 
Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1021 et seq.) is amended— 
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883 
(A) in subpart B of part 7 (29 U.S.C. 
1185 et seq.), by adding at the end the fol-
lowing: 
‘‘SEC. 726. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR-
MACY BENEFIT MANAGEMENT SERVICES. 
‘‘(a) IN GENERAL.—For plan years beginning on or 
after the date that is 30 months after the date of enact-
ment of this section (referred to in this subsection and 
subsection (b) as the ‘effective date’), a group health plan 
or a health insurance issuer offering group health insur-
ance coverage, or an entity providing pharmacy benefit 
management services on behalf of such a plan or issuer, 
shall not enter into a contract, including an extension or 
renewal of a contract, entered into on or after the effective 
date, with an applicable entity unless such applicable enti-
ty agrees to— 
‘‘(1) not limit or delay the disclosure of infor-
mation to the group health plan (including such a 
plan offered through a health insurance issuer) in 
such a manner that prevents an entity providing 
pharmacy benefit management services on behalf of 
a group health plan or health insurance issuer offer-
ing group health insurance coverage from making 
the reports described in subsection (b); and 
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884 
‘‘(2) provide the entity providing pharmacy ben-
efit management services on behalf of a group health 
plan or health insurance issuer relevant information 
necessary to make the reports described in sub-
section (b). 
‘‘(b) REPORTS.— 
‘‘(1) IN GENERAL.—For plan years beginning 
on or after the effective date, in the case of any con-
tract between a group health plan or a health insur-
ance issuer offering group health insurance coverage 
offered in connection with such a plan and an entity 
providing pharmacy benefit management services on 
behalf of such plan or issuer, including an extension 
or renewal of such a contract, entered into on or 
after the effective date, the entity providing phar-
macy benefit management services on behalf of such 
a group health plan or health insurance issuer, not 
less frequently than every 6 months (or, at the re-
quest of a group health plan, not less frequently 
than quarterly, and under the same conditions, 
terms, and cost of the semiannual report under this 
subsection), shall submit to the group health plan a 
report in accordance with this section. Each such re-
port shall be made available to such group health 
plan in plain language, in a machine-readable for-
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885 
mat, and as the Secretary may determine, other for-
mats. Each such report shall include the information 
described in paragraph (2). 
‘‘(2) INFORMATION DESCRIBED.—For purposes 
of paragraph (1), the information described in this 
paragraph is, with respect to drugs covered by a 
group health plan or group health insurance cov-
erage offered by a health insurance issuer in connec-
tion with a group health plan during each reporting 
period— 
‘‘(A) in the case of a group health plan 
that is offered by a specified large employer or 
that is a specified large plan, and is not offered 
as health insurance coverage, or in the case of 
health insurance coverage for which the election 
under paragraph (3) is made for the applicable 
reporting period— 
‘‘(i) a list of drugs for which a claim 
was filed and, with respect to each such 
drug on such list— 
‘‘(I) the contracted compensation 
paid by the group health plan or 
health insurance issuer for each cov-
ered drug (identified by the National 
Drug Code) to the entity providing 
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886 
pharmacy benefit management serv-
ices or other applicable entity on be-
half of the group health plan or health 
insurance issuer; 
‘‘(II) the contracted compensa-
tion paid to the pharmacy, by any en-
tity providing pharmacy benefit man-
agement services or other applicable 
entity on behalf of the group health 
plan or health insurance issuer, for 
each covered drug (identified by the 
National Drug Code); 
‘‘(III) for each such claim, the 
difference between the amount paid 
under subclause (I) and the amount 
paid under subclause (II); 
‘‘(IV) the proprietary name, es-
tablished name or proper name, and 
the National Drug Code; 
‘‘(V) for each claim for the drug 
(including original prescriptions and 
refills) and for each dosage unit of the 
drug for which a claim was filed, the 
type of dispensing channel used to 
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887 
furnish the drug, including retail, mail 
order, or specialty pharmacy; 
‘‘(VI) with respect to each drug 
dispensed, for each type of dispensing 
channel (including retail, mail order, 
or specialty pharmacy)— 
‘‘(aa) whether such drug is a 
brand name drug or a generic 
drug, and— 
‘‘(AA) in the case of a 
brand name drug, the whole-
sale acquisition cost, listed 
as cost per days supply and 
cost per dosage unit, on the 
date such drug was dis-
pensed; and 
‘‘(BB) in the case of a 
generic drug, the average 
wholesale price, listed as 
cost per days supply and 
cost per dosage unit, on the 
date such drug was dis-
pensed; and 
‘‘(bb) the total number of— 
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888 
‘‘(AA) 
prescription 
claims 
(including 
original 
prescriptions and refills); 
‘‘(BB) participants and 
beneficiaries for whom a 
claim for such drug was 
filed through the applicable 
dispensing channel; 
‘‘(CC) dosage units and 
dosage units per fill of such 
drug; and 
‘‘(DD) days supply of 
such drug per fill; 
‘‘(VII) the net price per course of 
treatment or single fill, such as a 30- 
day supply or 90-day supply to the 
plan or coverage after rebates, fees, 
alternative discounts, or other remu-
neration received from applicable enti-
ties; 
‘‘(VIII) the total amount of out- 
of-pocket spending by participants 
and beneficiaries on such drug, in-
cluding spending through copayments, 
coinsurance, and deductibles, but not 
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889 
including any amounts spent by par-
ticipants and beneficiaries on drugs 
not covered under the plan or cov-
erage, or for which no claim is sub-
mitted under the plan or coverage; 
‘‘(IX) the total net spending on 
the drug; 
‘‘(X) the total amount received, 
or expected to be received, by the plan 
or issuer from any applicable entity in 
rebates, fees, alternative discounts, or 
other remuneration; 
‘‘(XI) the total amount received, 
or expected to be received, by the enti-
ty providing pharmacy benefit man-
agement services, from applicable en-
tities, in rebates, fees, alternative dis-
counts, or other remuneration from 
such entities— 
‘‘(aa) for claims incurred 
during the reporting period; and 
‘‘(bb) that is related to utili-
zation of such drug or spending 
on such drug; and 
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890 
‘‘(XII) to the extent feasible, in-
formation on the total amount of re-
muneration for such drug, including 
copayment assistance dollars paid, co-
payment cards applied, or other dis-
counts provided by each drug manu-
facturer (or entity administering co-
payment assistance on behalf of such 
drug manufacturer), to the partici-
pants and beneficiaries enrolled in 
such plan or coverage; 
‘‘(ii) a list of each therapeutic class 
(as defined by the Secretary) for which a 
claim was filed under the group health 
plan or health insurance coverage during 
the reporting period, and, with respect to 
each such therapeutic class— 
‘‘(I) the total gross spending on 
drugs in such class before rebates, 
price 
concessions, 
alternative 
dis-
counts, or other remuneration from 
applicable entities; 
‘‘(II) the net spending in such 
class after such rebates, price conces-
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891 
sions, alternative discounts, or other 
remuneration from applicable entities; 
‘‘(III) the total amount received, 
or expected to be received, by the enti-
ty providing pharmacy benefit man-
agement services, from applicable en-
tities, in rebates, fees, alternative dis-
counts, or other remuneration from 
such entities— 
‘‘(aa) for claims incurred 
during the reporting period; and 
‘‘(bb) that is related to utili-
zation of drugs or drug spending; 
‘‘(IV) the average net spending 
per 30-day supply and per 90-day 
supply by the plan or by the issuer 
with respect to such coverage and its 
participants and beneficiaries, among 
all drugs within the therapeutic class 
for which a claim was filed during the 
reporting period; 
‘‘(V) the number of participants 
and beneficiaries who filled a prescrip-
tion for a drug in such class, includ-
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892 
ing the National Drug Code for each 
such drug; 
‘‘(VI) if applicable, a description 
of the formulary tiers and utilization 
mechanisms (such as prior authoriza-
tion or step therapy) employed for 
drugs in that class; and 
‘‘(VII) the total out-of-pocket 
spending under the plan or coverage 
by participants and beneficiaries, in-
cluding spending through copayments, 
coinsurance, and deductibles, but not 
including any amounts spent by par-
ticipants and beneficiaries on drugs 
not covered under the plan or cov-
erage or for which no claim is sub-
mitted under the plan or coverage; 
‘‘(iii) with respect to any drug for 
which gross spending under the group 
health plan or health insurance coverage 
exceeded $10,000 during the reporting pe-
riod or, in the case that gross spending 
under the group health plan or coverage 
exceeded $10,000 during the reporting pe-
riod with respect to fewer than 50 drugs, 
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893 
with respect to the 50 prescription drugs 
with the highest spending during the re-
porting period— 
‘‘(I) a list of all other drugs in 
the same therapeutic class as such 
drug; 
‘‘(II) if applicable, the rationale 
for the formulary placement of such 
drug in that therapeutic category or 
class, selected from a list of standard 
rationales established by the Sec-
retary, in consultation with stake-
holders; and 
‘‘(III) any change in formulary 
placement compared to the prior plan 
year; and 
‘‘(iv) in the case that such plan or 
issuer (or an entity providing pharmacy 
benefit management services on behalf of 
such plan or issuer) has an affiliated phar-
macy or pharmacy under common owner-
ship, including mandatory mail and spe-
cialty home delivery programs, retail and 
mail auto-refill programs, and cost sharing 
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894 
assistance incentives funded by an entity 
providing pharmacy benefit services— 
‘‘(I) an explanation of any ben-
efit design parameters that encourage 
or require participants and bene-
ficiaries in the plan or coverage to fill 
prescriptions at mail order, specialty, 
or retail pharmacies; 
‘‘(II) the percentage of total pre-
scriptions dispensed by such phar-
macies to participants or beneficiaries 
in such plan or coverage; and 
‘‘(III) a list of all drugs dis-
pensed by such pharmacies to partici-
pants or beneficiaries enrolled in such 
plan or coverage, and, with respect to 
each drug dispensed— 
‘‘(aa) the amount charged, 
per dosage unit, per 30-day sup-
ply, or per 90-day supply (as ap-
plicable) to the plan or issuer, 
and to participants and bene-
ficiaries; 
‘‘(bb) the median amount 
charged to such plan or issuer, 
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895 
and the interquartile range of the 
costs, per dosage unit, per 30- 
day supply, and per 90-day sup-
ply, including amounts paid by 
the 
participants 
and 
bene-
ficiaries, when the same drug is 
dispensed by other pharmacies 
that are not affiliated with or 
under common ownership with 
the entity and that are included 
in the pharmacy network of such 
plan or coverage; 
‘‘(cc) the lowest cost per 
dosage unit, per 30-day supply 
and per 90-day supply, for each 
such drug, including amounts 
charged to the plan or coverage 
and to participants and bene-
ficiaries, that is available from 
any pharmacy included in the 
network of such plan or coverage; 
and 
‘‘(dd) the net acquisition 
cost per dosage unit, per 30-day 
supply, and per 90-day supply, if 
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896 
such drug is subject to a max-
imum price discount; and 
‘‘(B) with respect to any group health 
plan, including group health insurance coverage 
offered in connection with such a plan, regard-
less of whether the plan or coverage is offered 
by a specified large employer or whether it is a 
specified large plan— 
‘‘(i) a summary document for the 
group health plan that includes such infor-
mation described in clauses (i) through (iv) 
of subparagraph (A), as specified by the 
Secretary through guidance, program in-
struction, or otherwise (with no require-
ment of notice and comment rulemaking), 
that the Secretary determines useful to 
group health plans for purposes of select-
ing pharmacy benefit management serv-
ices, such as an estimated net price to 
group health plan and participant or bene-
ficiary, a cost per claim, the fee structure 
or reimbursement model, and estimated 
cost per participant or beneficiary; 
‘‘(ii) a summary document for plans 
and issuers to provide to participants and 
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897 
beneficiaries, which shall be made available 
to participants or beneficiaries upon re-
quest to their group health plan (including 
in the case of group health insurance cov-
erage offered in connection with such a 
plan), that— 
‘‘(I) contains such information 
described in clauses (iii), (iv), (v), and 
(vi), as applicable, as specified by the 
Secretary through guidance, program 
instruction, or otherwise (with no re-
quirement of notice and comment 
rulemaking) that the Secretary deter-
mines useful to participants or bene-
ficiaries in better understanding the 
plan or coverage or benefits under 
such plan or coverage; 
‘‘(II) contains only aggregate in-
formation; and 
‘‘(III) states that participants 
and beneficiaries may request specific, 
claims-level information required to be 
furnished under subsection (c) from 
the group health plan or health insur-
ance issuer; and 
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898 
‘‘(iii) with respect to drugs covered by 
such plan or coverage during such report-
ing period— 
‘‘(I) the total net spending by the 
plan or coverage for all such drugs; 
‘‘(II) the total amount received, 
or expected to be received, by the plan 
or issuer from any applicable entity in 
rebates, fees, alternative discounts, or 
other remuneration; and 
‘‘(III) to the extent feasible, in-
formation on the total amount of re-
muneration for such drugs, including 
copayment assistance dollars paid, co-
payment cards applied, or other dis-
counts provided by each drug manu-
facturer (or entity administering co-
payment assistance on behalf of such 
drug manufacturer) to participants 
and beneficiaries; 
‘‘(iv) amounts paid directly or indi-
rectly in rebates, fees, or any other type of 
compensation 
(as 
defined 
in 
section 
408(b)(2)(B)(ii)(dd)(AA)) 
to 
brokerage 
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899 
firms, brokers, consultants, advisors, or 
any other individual or firm, for— 
‘‘(I) the referral of the group 
health plan’s or health insurance 
issuer’s business to an entity pro-
viding pharmacy benefit management 
services, including the identity of the 
recipient of such amounts; 
‘‘(II) consideration of the entity 
providing pharmacy benefit manage-
ment services by the group health 
plan or health insurance issuer; or 
‘‘(III) the retention of the entity 
by the group health plan or health in-
surance issuer; 
‘‘(v) an explanation of any benefit de-
sign parameters that encourage or require 
participants and beneficiaries in such plan 
or coverage to fill prescriptions at mail 
order, specialty, or retail pharmacies that 
are affiliated with or under common own-
ership with the entity providing pharmacy 
benefit management services under such 
plan or coverage, including mandatory mail 
and specialty home delivery programs, re-
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900 
tail and mail auto-refill programs, and 
cost-sharing assistance incentives directly 
or indirectly funded by such entity; and 
‘‘(vi) total gross spending on all drugs 
under the plan or coverage during the re-
porting period. 
‘‘(3) OPT-IN FOR GROUP HEALTH INSURANCE 
COVERAGE OFFERED BY A SPECIFIED LARGE EM-
PLOYER OR THAT IS A SPECIFIED LARGE PLAN.—In 
the case of group health insurance coverage offered 
in connection with a group health plan that is of-
fered by a specified large employer or is a specified 
large plan, such group health plan may, on an an-
nual basis, for plan years beginning on or after the 
date that is 30 months after the date of enactment 
of this section, elect to require an entity providing 
pharmacy benefit management services on behalf of 
the health insurance issuer to submit to such group 
health plan a report that includes all of the informa-
tion described in paragraph (2)(A), in addition to 
the information described in paragraph (2)(B). 
‘‘(4) PRIVACY REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—An entity providing 
pharmacy benefit management services on be-
half of a group health plan or a health insur-
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901 
ance issuer offering group health insurance cov-
erage shall report information under paragraph 
(1) in a manner consistent with the privacy reg-
ulations promulgated under section 13402(a) of 
the Health Information Technology for Eco-
nomic and Clinical Health Act (42 U.S.C. 
17932(a)) and consistent with the privacy regu-
lations promulgated under the Health Insur-
ance Portability and Accountability Act of 1996 
in part 160 and subparts A and E of part 164 
of title 45, Code of Federal Regulations (or suc-
cessor regulations) (referred to in this para-
graph as the ‘HIPAA privacy regulations’) and 
shall restrict the use and disclosure of such in-
formation according to such privacy regulations 
and such HIPAA privacy regulations. 
‘‘(B) ADDITIONAL REQUIREMENTS.— 
‘‘(i) IN
GENERAL.—An entity pro-
viding pharmacy benefit management serv-
ices on behalf of a group health plan or 
health insurance issuer offering group 
health insurance coverage that submits a 
report under paragraph (1) shall ensure 
that such report contains only summary 
health information, as defined in section 
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902 
164.504(a) of title 45, Code of Federal 
Regulations (or successor regulations). 
‘‘(ii) RESTRICTIONS.—In carrying out 
this subsection, a group health plan shall 
comply with section 164.504(f) of title 45, 
Code of Federal Regulations (or a suc-
cessor regulation), and a plan sponsor shall 
act in accordance with the terms of the 
agreement described in such section. 
‘‘(C) RULE OF CONSTRUCTION.— 
‘‘(i) Nothing in this section shall be 
construed to modify the requirements for 
the creation, receipt, maintenance, or 
transmission of protected health informa-
tion under the HIPAA privacy regulations. 
‘‘(ii) Nothing in this section shall be 
construed to affect the application of any 
Federal or State privacy or civil rights law, 
including the HIPAA privacy regulations, 
the Genetic Information Nondiscrimination 
Act of 2008 (Public Law 110–233) (in-
cluding the amendments made by such 
Act), the Americans with Disabilities Act 
of 1990 (42 U.S.C. 12101 et seq.), section 
504 of the Rehabilitation Act of 1973 (29 
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903 
U.S.C. 794), section 1557 of the Patient 
Protection and Affordable Care Act (42 
U.S.C. 18116), title VI of the Civil Rights 
Act of 1964 (42 U.S.C. 2000d), and title 
VII of the Civil Rights Act of 1964 (42 
U.S.C. 2000e). 
‘‘(D) WRITTEN NOTICE.—Each plan year, 
group health plans, including with respect to 
group health insurance coverage offered in con-
nection with a group health plan, shall provide 
to each participant or beneficiary written notice 
informing the participant or beneficiary of the 
requirement for entities providing pharmacy 
benefit management services on behalf of the 
group health plan or health insurance issuer of-
fering group health insurance coverage to sub-
mit reports to group health plans under para-
graph (1), as applicable, which may include in-
corporating such notification in plan documents 
provided to the participant or beneficiary, or 
providing individual notification. 
‘‘(E) LIMITATION
TO
BUSINESS
ASSOCI-
ATES.—A group health plan receiving a report 
under paragraph (1) may disclose such informa-
tion only to the entity from which the report 
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904 
was received or to that entity’s business associ-
ates as defined in section 160.103 of title 45, 
Code of Federal Regulations (or successor regu-
lations) or as permitted by the HIPAA privacy 
regulations. 
‘‘(F) CLARIFICATION REGARDING PUBLIC 
DISCLOSURE
OF
INFORMATION.—Nothing in 
this section shall prevent an entity providing 
pharmacy benefit management services on be-
half of a group health plan or health insurance 
issuer offering group health insurance coverage, 
from placing reasonable restrictions on the pub-
lic disclosure of the information contained in a 
report described in paragraph (1), except that 
such plan, issuer, or entity may not— 
‘‘(i) restrict disclosure of such report 
to the Department of Health and Human 
Services, the Department of Labor, or the 
Department of the Treasury; or 
‘‘(ii) prevent disclosure for the pur-
poses of subsection (c), or any other public 
disclosure requirement under this section. 
‘‘(G) LIMITED
FORM
OF
REPORT.—The 
Secretary shall define through rulemaking a 
limited form of the report under paragraph (1) 
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905 
required with respect to any group health plan 
established by a plan sponsor that is, or is af-
filiated with, a drug manufacturer, drug whole-
saler, or other direct participant in the drug 
supply chain, in order to prevent anti-competi-
tive behavior. 
‘‘(5) STANDARD FORMAT AND REGULATIONS.— 
‘‘(A) IN
GENERAL.—Not later than 18 
months after the date of enactment of this sec-
tion, the Secretary shall specify through rule-
making a standard format for entities providing 
pharmacy benefit management services on be-
half of group health plans and health insurance 
issuers offering group health insurance cov-
erage, to submit reports required under para-
graph (1). 
‘‘(B) 
ADDITIONAL
REGULATIONS.—Not 
later than 18 months after the date of enact-
ment of this section, the Secretary shall, 
through rulemaking, promulgate any other final 
regulations necessary to implement the require-
ments of this section. In promulgating such 
regulations, the Secretary shall, to the extent 
practicable, align the reporting requirements 
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906 
under this section with the reporting require-
ments under section 725. 
‘‘(c) REQUIREMENT TO PROVIDE INFORMATION TO 
PARTICIPANTS OR BENEFICIARIES.—A group health plan, 
including with respect to group health insurance coverage 
offered in connection with a group health plan, upon re-
quest of a participant or beneficiary, shall provide to such 
participant or beneficiary— 
‘‘(1) the summary document described in sub-
section (b)(2)(B)(ii); and 
‘‘(2) the information described in subsection 
(b)(2)(A)(i)(III) with respect to a claim made by or 
on behalf of such participant or beneficiary. 
‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to permit a health insurance issuer, 
group health plan, entity providing pharmacy benefit man-
agement services on behalf of a group health plan or 
health insurance issuer, or other entity to restrict disclo-
sure to, or otherwise limit the access of, the Secretary to 
a report described in subsection (b)(1) or information re-
lated to compliance with subsections (a), (b), or (c) of this 
section or section 502(c)(13) by such issuer, plan, or enti-
ty. 
‘‘(e) DEFINITIONS.—In this section: 
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907 
‘‘(1) APPLICABLE ENTITY.—The term ‘applica-
ble entity’ means— 
‘‘(A) an applicable group purchasing orga-
nization, drug manufacturer, distributor, whole-
saler, rebate aggregator (or other purchasing 
entity designed to aggregate rebates), or associ-
ated third party; 
‘‘(B) any subsidiary, parent, affiliate, or 
subcontractor of a group health plan, health in-
surance issuer, entity that provides pharmacy 
benefit management services on behalf of such 
a plan or issuer, or any entity described in sub-
paragraph (A); or 
‘‘(C) such other entity as the Secretary 
may specify through rulemaking. 
‘‘(2) APPLICABLE GROUP PURCHASING ORGANI-
ZATION.—The term ‘applicable group purchasing or-
ganization’ means a group purchasing organization 
that is affiliated with or under common ownership 
with an entity providing pharmacy benefit manage-
ment services. 
‘‘(3) CONTRACTED COMPENSATION.—The term 
‘contracted compensation’ means the sum of any in-
gredient cost and dispensing fee for a drug (inclusive 
of the out-of-pocket costs to the participant or bene-
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908 
ficiary), or another analogous compensation struc-
ture that the Secretary may specify through regula-
tions. 
‘‘(4) GROSS
SPENDING.—The term ‘gross 
spending’, with respect to prescription drug benefits 
under a group health plan or health insurance cov-
erage, means the amount spent by a group health 
plan or health insurance issuer on prescription drug 
benefits, calculated before the application of rebates, 
fees, alternative discounts, or other remuneration. 
‘‘(5) NET SPENDING.—The term ‘net spending’, 
with respect to prescription drug benefits under a 
group health plan or health insurance coverage, 
means the amount spent by a group health plan or 
health insurance issuer on prescription drug bene-
fits, calculated after the application of rebates, fees, 
alternative discounts, or other remuneration. 
‘‘(6) PLAN SPONSOR.—The term ‘plan sponsor’ 
has the meaning given such term in section 
3(16)(B). 
‘‘(7) REMUNERATION.—The term ‘remunera-
tion’ has the meaning given such term by the Sec-
retary through rulemaking, which shall be reevalu-
ated by the Secretary every 5 years. 
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909 
‘‘(8) SPECIFIED LARGE EMPLOYER.—The term 
‘specified large employer’ means, in connection with 
a group health plan (including group health insur-
ance coverage offered in connection with such a 
plan) established or maintained by a single em-
ployer, with respect to a calendar year or a plan 
year, as applicable, an employer who employed an 
average of at least 100 employees on business days 
during the preceding calendar year or plan year and 
who employs at least 1 employee on the first day of 
the calendar year or plan year. 
‘‘(9) SPECIFIED LARGE PLAN.—The term ‘spec-
ified large plan’ means a group health plan (includ-
ing group health insurance coverage offered in con-
nection with such a plan) established or maintained 
by a plan sponsor described in clause (ii) or (iii) of 
section 3(16)(B) that had an average of at least 100 
participants on business days during the preceding 
calendar year or plan year, as applicable. 
‘‘(10) WHOLESALE
ACQUISITION
COST.—The 
term ‘wholesale acquisition cost’ has the meaning 
given such term in section 1847A(c)(6)(B) of the 
Social 
Security 
Act 
(42 
U.S.C. 
1395w– 
3a(c)(6)(B)).’’; 
(B) in section 502 (29 U.S.C. 1132)— 
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910 
(i) in subsection (a)(6), by striking 
‘‘or (9)’’ and inserting ‘‘(9), or (13)’’; 
(ii) in subsection (b)(3), by striking 
‘‘under subsection (c)(9)’’ and inserting 
‘‘under paragraphs (9) and (13) of sub-
section (c)’’; and 
(iii) in subsection (c), by adding at 
the end the following: 
‘‘(13) SECRETARIAL ENFORCEMENT AUTHORITY 
RELATING TO OVERSIGHT OF PHARMACY BENEFIT 
MANAGEMENT SERVICES.— 
‘‘(A) FAILURE
TO
PROVIDE
INFORMA-
TION.—The Secretary may impose a penalty 
against a plan administrator of a group health 
plan, a health insurance issuer offering group 
health insurance coverage, or an entity pro-
viding pharmacy benefit management services 
on behalf of such a plan or issuer, or an appli-
cable entity (as defined in section 726(e)) that 
violates section 726(a); an entity providing 
pharmacy benefit management services on be-
half of such a plan or issuer that fails to pro-
vide the information required under section 
726(b); or any person who causes a group 
health plan to fail to provide the information 
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911 
required under section 726(c), in the amount of 
$10,000 for each day during which such viola-
tion continues or such information is not dis-
closed or reported. 
‘‘(B) FALSE
INFORMATION.—The Sec-
retary may impose a penalty against a plan ad-
ministrator of a group health plan, a health in-
surance issuer offering group health insurance 
coverage, an entity providing pharmacy benefit 
management services, or an applicable entity 
(as defined in section 726(e)) that knowingly 
provides false information under section 726, in 
an amount not to exceed $100,000 for each 
item of false information. Such penalty shall be 
in addition to other penalties as may be pre-
scribed by law. 
‘‘(C) WAIVERS.—The Secretary may waive 
penalties under subparagraph (A), or extend 
the period of time for compliance with a re-
quirement of this section, for an entity in viola-
tion of section 726 that has made a good-faith 
effort to comply with the requirements of sec-
tion 726.’’; and 
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912 
(C) 
in 
section 
732(a) 
(29 
U.S.C. 
1191a(a)), by striking ‘‘section 711’’ and in-
serting ‘‘sections 711 and 726’’. 
(2) CLERICAL AMENDMENT.—The table of con-
tents in section 1 of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1001 et seq.) 
is amended by inserting after the item relating to 
section 725 the following new item: 
‘‘Sec. 726. Oversight of entities that provide pharmacy benefit management 
services.’’. 
(c) INTERNAL REVENUE CODE OF 1986.— 
(1) IN GENERAL.—Chapter 100 of the Internal 
Revenue Code of 1986 is amended— 
(A) by adding at the end of subchapter B 
the following: 
‘‘SEC. 9826. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR-
MACY BENEFIT MANAGEMENT SERVICES. 
‘‘(a) IN GENERAL.—For plan years beginning on or 
after the date that is 30 months after the date of enact-
ment of this section (referred to in this subsection and 
subsection (b) as the ‘effective date’), a group health plan, 
or an entity providing pharmacy benefit management serv-
ices on behalf of such a plan, shall not enter into a con-
tract, including an extension or renewal of a contract, en-
tered into on or after the effective date, with an applicable 
entity unless such applicable entity agrees to— 
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913 
‘‘(1) not limit or delay the disclosure of infor-
mation to the group health plan in such a manner 
that prevents an entity providing pharmacy benefit 
management services on behalf of a group health 
plan from making the reports described in sub-
section (b); and 
‘‘(2) provide the entity providing pharmacy ben-
efit management services on behalf of a group health 
plan relevant information necessary to make the re-
ports described in subsection (b). 
‘‘(b) REPORTS.— 
‘‘(1) IN GENERAL.—For plan years beginning 
on or after the effective date, in the case of any con-
tract between a group health plan and an entity pro-
viding pharmacy benefit management services on be-
half of such plan, including an extension or renewal 
of such a contract, entered into on or after the effec-
tive date, the entity providing pharmacy benefit 
management services on behalf of such a group 
health plan, not less frequently than every 6 months 
(or, at the request of a group health plan, not less 
frequently than quarterly, and under the same con-
ditions, terms, and cost of the semiannual report 
under this subsection), shall submit to the group 
health plan a report in accordance with this section. 
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914 
Each such report shall be made available to such 
group health plan in plain language, in a machine- 
readable format, and as the Secretary may deter-
mine, other formats. Each such report shall include 
the information described in paragraph (2). 
‘‘(2) INFORMATION DESCRIBED.—For purposes 
of paragraph (1), the information described in this 
paragraph is, with respect to drugs covered by a 
group health plan during each reporting period— 
‘‘(A) in the case of a group health plan 
that is offered by a specified large employer or 
that is a specified large plan, and is not offered 
as health insurance coverage, or in the case of 
health insurance coverage for which the election 
under paragraph (3) is made for the applicable 
reporting period— 
‘‘(i) a list of drugs for which a claim 
was filed and, with respect to each such 
drug on such list— 
‘‘(I) the contracted compensation 
paid by the group health plan for each 
covered drug (identified by the Na-
tional Drug Code) to the entity pro-
viding pharmacy benefit management 
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915 
services or other applicable entity on 
behalf of the group health plan; 
‘‘(II) the contracted compensa-
tion paid to the pharmacy, by any en-
tity providing pharmacy benefit man-
agement services or other applicable 
entity on behalf of the group health 
plan, for each covered drug (identified 
by the National Drug Code); 
‘‘(III) for each such claim, the 
difference between the amount paid 
under subclause (I) and the amount 
paid under subclause (II); 
‘‘(IV) the proprietary name, es-
tablished name or proper name, and 
the National Drug Code; 
‘‘(V) for each claim for the drug 
(including original prescriptions and 
refills) and for each dosage unit of the 
drug for which a claim was filed, the 
type of dispensing channel used to 
furnish the drug, including retail, mail 
order, or specialty pharmacy; 
‘‘(VI) with respect to each drug 
dispensed, for each type of dispensing 
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917 
claim for such drug was 
filed through the applicable 
dispensing channel; 
‘‘(CC) dosage units and 
dosage units per fill of such 
drug; and 
‘‘(DD) days supply of 
such drug per fill; 
‘‘(VII) the net price per course of 
treatment or single fill, such as a 30- 
day supply or 90-day supply to the 
plan after rebates, fees, alternative 
discounts, or other remuneration re-
ceived from applicable entities; 
‘‘(VIII) the total amount of out- 
of-pocket spending by participants 
and beneficiaries on such drug, in-
cluding spending through copayments, 
coinsurance, and deductibles, but not 
including any amounts spent by par-
ticipants and beneficiaries on drugs 
not covered under the plan, or for 
which no claim is submitted under the 
plan; 
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919 
facturer (or entity administering co-
payment assistance on behalf of such 
drug manufacturer), to the partici-
pants and beneficiaries enrolled in 
such plan; 
‘‘(ii) a list of each therapeutic class 
(as defined by the Secretary) for which a 
claim was filed under the group health 
plan during the reporting period, and, with 
respect to each such therapeutic class— 
‘‘(I) the total gross spending on 
drugs in such class before rebates, 
price 
concessions, 
alternative 
dis-
counts, or other remuneration from 
applicable entities; 
‘‘(II) the net spending in such 
class after such rebates, price conces-
sions, alternative discounts, or other 
remuneration from applicable entities; 
‘‘(III) the total amount received, 
or expected to be received, by the enti-
ty providing pharmacy benefit man-
agement services, from applicable en-
tities, in rebates, fees, alternative dis-
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920 
counts, or other remuneration from 
such entities— 
‘‘(aa) for claims incurred 
during the reporting period; and 
‘‘(bb) that is related to utili-
zation of drugs or drug spending; 
‘‘(IV) the average net spending 
per 30-day supply and per 90-day 
supply by the plan and its partici-
pants and beneficiaries, among all 
drugs within the therapeutic class for 
which a claim was filed during the re-
porting period; 
‘‘(V) the number of participants 
and beneficiaries who filled a prescrip-
tion for a drug in such class, includ-
ing the National Drug Code for each 
such drug; 
‘‘(VI) if applicable, a description 
of the formulary tiers and utilization 
mechanisms (such as prior authoriza-
tion or step therapy) employed for 
drugs in that class; and 
‘‘(VII) the total out-of-pocket 
spending under the plan by partici-
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921 
pants and beneficiaries, including 
spending through copayments, coin-
surance, and deductibles, but not in-
cluding any amounts spent by partici-
pants and beneficiaries on drugs not 
covered under the plan or for which 
no claim is submitted under the plan; 
‘‘(iii) with respect to any drug for 
which gross spending under the group 
health plan exceeded $10,000 during the 
reporting period or, in the case that gross 
spending under the group health plan ex-
ceeded $10,000 during the reporting pe-
riod with respect to fewer than 50 drugs, 
with respect to the 50 prescription drugs 
with the highest spending during the re-
porting period— 
‘‘(I) a list of all other drugs in 
the same therapeutic class as such 
drug; 
‘‘(II) if applicable, the rationale 
for the formulary placement of such 
drug in that therapeutic category or 
class, selected from a list of standard 
rationales established by the Sec-
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922 
retary, in consultation with stake-
holders; and 
‘‘(III) any change in formulary 
placement compared to the prior plan 
year; and 
‘‘(iv) in the case that such plan (or an 
entity providing pharmacy benefit manage-
ment services on behalf of such plan) has 
an affiliated pharmacy or pharmacy under 
common ownership, including mandatory 
mail and specialty home delivery programs, 
retail and mail auto-refill programs, and 
cost sharing assistance incentives funded 
by an entity providing pharmacy benefit 
services— 
‘‘(I) an explanation of any ben-
efit design parameters that encourage 
or require participants and bene-
ficiaries in the plan to fill prescrip-
tions at mail order, specialty, or retail 
pharmacies; 
‘‘(II) the percentage of total pre-
scriptions dispensed by such phar-
macies to participants or beneficiaries 
in such plan; and 
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923 
‘‘(III) a list of all drugs dis-
pensed by such pharmacies to partici-
pants or beneficiaries enrolled in such 
plan, and, with respect to each drug 
dispensed— 
‘‘(aa) the amount charged, 
per dosage unit, per 30-day sup-
ply, or per 90-day supply (as ap-
plicable) to the plan, and to par-
ticipants and beneficiaries; 
‘‘(bb) the median amount 
charged to such plan, and the 
interquartile range of the costs, 
per dosage unit, per 30-day sup-
ply, and per 90-day supply, in-
cluding amounts paid by the par-
ticipants and beneficiaries, when 
the same drug is dispensed by 
other pharmacies that are not af-
filiated with or under common 
ownership with the entity and 
that are included in the phar-
macy network of such plan; 
‘‘(cc) the lowest cost per 
dosage unit, per 30-day supply 
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924 
and per 90-day supply, for each 
such drug, including amounts 
charged to the plan and to par-
ticipants and beneficiaries, that 
is available from any pharmacy 
included in the network of such 
plan; and 
‘‘(dd) the net acquisition 
cost per dosage unit, per 30-day 
supply, and per 90-day supply, if 
such drug is subject to a max-
imum price discount; and 
‘‘(B) with respect to any group health 
plan, regardless of whether the plan is offered 
by a specified large employer or whether it is a 
specified large plan— 
‘‘(i) a summary document for the 
group health plan that includes such infor-
mation described in clauses (i) through (iv) 
of subparagraph (A), as specified by the 
Secretary through guidance, program in-
struction, or otherwise (with no require-
ment of notice and comment rulemaking), 
that the Secretary determines useful to 
group health plans for purposes of select-
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925 
ing pharmacy benefit management serv-
ices, such as an estimated net price to 
group health plan and participant or bene-
ficiary, a cost per claim, the fee structure 
or reimbursement model, and estimated 
cost per participant or beneficiary; 
‘‘(ii) a summary document for plans 
to provide to participants and beneficiaries, 
which shall be made available to partici-
pants or beneficiaries upon request to their 
group health plan, that— 
‘‘(I) contains such information 
described in clauses (iii), (iv), (v), and 
(vi), as applicable, as specified by the 
Secretary through guidance, program 
instruction, or otherwise (with no re-
quirement of notice and comment 
rulemaking) that the Secretary deter-
mines useful to participants or bene-
ficiaries in better understanding the 
plan or benefits under such plan; 
‘‘(II) contains only aggregate in-
formation; and 
‘‘(III) states that participants 
and beneficiaries may request specific, 
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926 
claims-level information required to be 
furnished under subsection (c) from 
the group health plan; and 
‘‘(iii) with respect to drugs covered by 
such plan during such reporting period— 
‘‘(I) the total net spending by the 
plan for all such drugs; 
‘‘(II) the total amount received, 
or expected to be received, by the plan 
from any applicable entity in rebates, 
fees, alternative discounts, or other 
remuneration; and 
‘‘(III) to the extent feasible, in-
formation on the total amount of re-
muneration for such drugs, including 
copayment assistance dollars paid, co-
payment cards applied, or other dis-
counts provided by each drug manu-
facturer (or entity administering co-
payment assistance on behalf of such 
drug manufacturer) to participants 
and beneficiaries; 
‘‘(iv) amounts paid directly or indi-
rectly in rebates, fees, or any other type of 
compensation 
(as 
defined 
in 
section 
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927 
408(b)(2)(B)(ii)(dd)(AA) of the Employee 
Retirement 
Income 
Security 
Act 
(29 
U.S.C. 1108(b)(2)(B)(ii)(dd)(AA))) to bro-
kerage firms, brokers, consultants, advi-
sors, or any other individual or firm, for— 
‘‘(I) the referral of the group 
health plan’s business to an entity 
providing pharmacy benefit manage-
ment services, including the identity 
of the recipient of such amounts; 
‘‘(II) consideration of the entity 
providing pharmacy benefit manage-
ment services by the group health 
plan; or 
‘‘(III) the retention of the entity 
by the group health plan; 
‘‘(v) an explanation of any benefit de-
sign parameters that encourage or require 
participants and beneficiaries in such plan 
to fill prescriptions at mail order, specialty, 
or retail pharmacies that are affiliated with 
or under common ownership with the enti-
ty providing pharmacy benefit management 
services under such plan, including manda-
tory mail and specialty home delivery pro-
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928 
grams, retail and mail auto-refill pro-
grams, and cost-sharing assistance incen-
tives directly or indirectly funded by such 
entity; and 
‘‘(vi) total gross spending on all drugs 
under the plan during the reporting period. 
‘‘(3) OPT-IN FOR GROUP HEALTH INSURANCE 
COVERAGE OFFERED BY A SPECIFIED LARGE EM-
PLOYER OR THAT IS A SPECIFIED LARGE PLAN.—In 
the case of group health insurance coverage offered 
in connection with a group health plan that is of-
fered by a specified large employer or is a specified 
large plan, such group health plan may, on an an-
nual basis, for plan years beginning on or after the 
date that is 30 months after the date of enactment 
of this section, elect to require an entity providing 
pharmacy benefit management services on behalf of 
the health insurance issuer to submit to such group 
health plan a report that includes all of the informa-
tion described in paragraph (2)(A), in addition to 
the information described in paragraph (2)(B). 
‘‘(4) PRIVACY REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—An entity providing 
pharmacy benefit management services on be-
half of a group health plan shall report infor-
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929 
mation under paragraph (1) in a manner con-
sistent with the privacy regulations promul-
gated under section 13402(a) of the Health In-
formation Technology for Economic and Clin-
ical Health Act (42 U.S.C. 17932(a)) and con-
sistent with the privacy regulations promul-
gated under the Health Insurance Portability 
and Accountability Act of 1996 in part 160 and 
subparts A and E of part 164 of title 45, Code 
of Federal Regulations (or successor regula-
tions) (referred to in this paragraph as the 
‘HIPAA privacy regulations’) and shall restrict 
the use and disclosure of such information ac-
cording to such privacy regulations and such 
HIPAA privacy regulations. 
‘‘(B) ADDITIONAL REQUIREMENTS.— 
‘‘(i) IN
GENERAL.—An entity pro-
viding pharmacy benefit management serv-
ices on behalf of a group health plan that 
submits a report under paragraph (1) shall 
ensure that such report contains only sum-
mary health information, as defined in sec-
tion 164.504(a) of title 45, Code of Fed-
eral Regulations (or successor regulations). 
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930 
‘‘(ii) RESTRICTIONS.—In carrying out 
this subsection, a group health plan shall 
comply with section 164.504(f) of title 45, 
Code of Federal Regulations (or a suc-
cessor regulation), and a plan sponsor shall 
act in accordance with the terms of the 
agreement described in such section. 
‘‘(C) RULE OF CONSTRUCTION.— 
‘‘(i) Nothing in this section shall be 
construed to modify the requirements for 
the creation, receipt, maintenance, or 
transmission of protected health informa-
tion under the HIPAA privacy regulations. 
‘‘(ii) Nothing in this section shall be 
construed to affect the application of any 
Federal or State privacy or civil rights law, 
including the HIPAA privacy regulations, 
the Genetic Information Nondiscrimination 
Act of 2008 (Public Law 110–233) (in-
cluding the amendments made by such 
Act), the Americans with Disabilities Act 
of 1990 (42 U.S.C. 12101 et seq.), section 
504 of the Rehabilitation Act of 1973 (29 
U.S.C. 794), section 1557 of the Patient 
Protection and Affordable Care Act (42 
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931 
U.S.C. 18116), title VI of the Civil Rights 
Act of 1964 (42 U.S.C. 2000d), and title 
VII of the Civil Rights Act of 1964 (42 
U.S.C. 2000e). 
‘‘(D) WRITTEN NOTICE.—Each plan year, 
group health plans shall provide to each partici-
pant or beneficiary written notice informing the 
participant or beneficiary of the requirement for 
entities providing pharmacy benefit manage-
ment services on behalf of the group health 
plan to submit reports to group health plans 
under paragraph (1), as applicable, which may 
include incorporating such notification in plan 
documents provided to the participant or bene-
ficiary, or providing individual notification. 
‘‘(E) LIMITATION
TO
BUSINESS
ASSOCI-
ATES.—A group health plan receiving a report 
under paragraph (1) may disclose such informa-
tion only to the entity from which the report 
was received or to that entity’s business associ-
ates as defined in section 160.103 of title 45, 
Code of Federal Regulations (or successor regu-
lations) or as permitted by the HIPAA privacy 
regulations. 
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932 
‘‘(F) CLARIFICATION REGARDING PUBLIC 
DISCLOSURE
OF
INFORMATION.—Nothing in 
this section shall prevent an entity providing 
pharmacy benefit management services on be-
half of a group health plan, from placing rea-
sonable restrictions on the public disclosure of 
the information contained in a report described 
in paragraph (1), except that such plan or enti-
ty may not— 
‘‘(i) restrict disclosure of such report 
to the Department of Health and Human 
Services, the Department of Labor, or the 
Department of the Treasury; or 
‘‘(ii) prevent disclosure for the pur-
poses of subsection (c), or any other public 
disclosure requirement under this section. 
‘‘(G) LIMITED
FORM
OF
REPORT.—The 
Secretary shall define through rulemaking a 
limited form of the report under paragraph (1) 
required with respect to any group health plan 
established by a plan sponsor that is, or is af-
filiated with, a drug manufacturer, drug whole-
saler, or other direct participant in the drug 
supply chain, in order to prevent anti-competi-
tive behavior. 
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933 
‘‘(5) STANDARD FORMAT AND REGULATIONS.— 
‘‘(A) IN
GENERAL.—Not later than 18 
months after the date of enactment of this sec-
tion, the Secretary shall specify through rule-
making a standard format for entities providing 
pharmacy benefit management services on be-
half of group health plans, to submit reports re-
quired under paragraph (1). 
‘‘(B) 
ADDITIONAL
REGULATIONS.—Not 
later than 18 months after the date of enact-
ment of this section, the Secretary shall, 
through rulemaking, promulgate any other final 
regulations necessary to implement the require-
ments of this section. In promulgating such 
regulations, the Secretary shall, to the extent 
practicable, align the reporting requirements 
under this section with the reporting require-
ments under section 9825. 
‘‘(c) REQUIREMENT TO PROVIDE INFORMATION TO 
PARTICIPANTS OR BENEFICIARIES.—A group health plan, 
upon request of a participant or beneficiary, shall provide 
to such participant or beneficiary— 
‘‘(1) the summary document described in sub-
section (b)(2)(B)(ii); and 
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934 
‘‘(2) the information described in subsection 
(b)(2)(A)(i)(III) with respect to a claim made by or 
on behalf of such participant or beneficiary. 
‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to permit a health insurance issuer, 
group health plan, entity providing pharmacy benefit man-
agement services on behalf of a group health plan or 
health insurance issuer, or other entity to restrict disclo-
sure to, or otherwise limit the access of, the Secretary to 
a report described in subsection (b)(1) or information re-
lated to compliance with subsections (a), (b), or (c) of this 
section or section 4980D(g) by such issuer, plan, or entity. 
‘‘(e) DEFINITIONS.—In this section: 
‘‘(1) APPLICABLE ENTITY.—The term ‘applica-
ble entity’ means— 
‘‘(A) an applicable group purchasing orga-
nization, drug manufacturer, distributor, whole-
saler, rebate aggregator (or other purchasing 
entity designed to aggregate rebates), or associ-
ated third party; 
‘‘(B) any subsidiary, parent, affiliate, or 
subcontractor of a group health plan, health in-
surance issuer, entity that provides pharmacy 
benefit management services on behalf of such 
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935 
a plan or issuer, or any entity described in sub-
paragraph (A); or 
‘‘(C) such other entity as the Secretary 
may specify through rulemaking. 
‘‘(2) APPLICABLE GROUP PURCHASING ORGANI-
ZATION.—The term ‘applicable group purchasing or-
ganization’ means a group purchasing organization 
that is affiliated with or under common ownership 
with an entity providing pharmacy benefit manage-
ment services. 
‘‘(3) CONTRACTED COMPENSATION.—The term 
‘contracted compensation’ means the sum of any in-
gredient cost and dispensing fee for a drug (inclusive 
of the out-of-pocket costs to the participant or bene-
ficiary), or another analogous compensation struc-
ture that the Secretary may specify through regula-
tions. 
‘‘(4) GROSS
SPENDING.—The term ‘gross 
spending’, with respect to prescription drug benefits 
under a group health plan, means the amount spent 
by a group health plan on prescription drug benefits, 
calculated before the application of rebates, fees, al-
ternative discounts, or other remuneration. 
‘‘(5) NET SPENDING.—The term ‘net spending’, 
with respect to prescription drug benefits under a 
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