I 
115TH CONGRESS 
2D SESSION 
H. R. 5958 
To amend title XVIII of the Social Security Act to require pharmacy-nego-
tiated price concessions and pharmacy incentive payments and adjust-
ments to be included in negotiated prices at the point-of-sale under 
part D of the Medicare program, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 24, 2018 
Mr. COLLINS of Georgia (for himself, Mr. CARTER of Georgia, Mr. DUNCAN 
of Tennessee, and Mr. GONZALEZ of Texas) 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 subse-
quently 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 require 
pharmacy-negotiated price concessions and pharmacy in-
centive payments and adjustments to be included in ne-
gotiated prices at the point-of-sale under part D of the 
Medicare program, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Phair Pricing Act of 
2018’’. 
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SEC. 2. REQUIRING PHARMACY-NEGOTIATED PRICE CON-
CESSIONS AND PHARMACY INCENTIVE PAY-
MENTS AND ADJUSTMENTS TO BE INCLUDED 
IN NEGOTIATED PRICES AT THE POINT-OF- 
SALE UNDER PART D OF THE MEDICARE PRO-
GRAM. 
Section 1860D–2(d)(1)(B) of the Social Security Act 
(42 U.S.C. 1395w–102(d)(1)(B)) is amended— 
(1) by striking ‘‘PRICES.—For purposes’’ and 
inserting ‘‘PRICES.— 
‘‘(i) IN
GENERAL.—For purposes’’; 
and 
(2) by adding at the end the following new 
clauses: 
‘‘(ii) 
PRICES
NEGOTIATED
WITH 
PHARMACY AT POINT-OF-SALE.— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (III), for plan years begin-
ning on or after January 1, 2019, ne-
gotiated prices for covered part D 
drugs described in clause (i) provided 
under a prescription drug plan, in-
cluding all pharmacy price concessions 
and all incentive payments and ad-
justments negotiated with the phar-
macy dispensing such drug, shall be 
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provided at the point-of-sale of the 
covered part D drug. If the negotiated 
price of such drug, including all phar-
macy price concessions and all incen-
tive payments and adjustments nego-
tiated with such pharmacy, is not pos-
sible to calculate at the point-of-sale, 
the PDP sponsor of such plan shall 
use an estimated negotiated price, in-
cluding all estimated pharmacy nego-
tiated price concessions and incentive 
payments and adjustments and taking 
into account the negotiated price of 
such drug in the prior year (if avail-
able). 
‘‘(II) APPLICATION
OF
INCEN-
TIVE
PAYMENTS
AND
ADJUST-
MENTS.—For plan years beginning on 
or after January 1, 2019, in the case 
that a PDP sponsor uses incentive 
payments and adjustments with re-
spect to payment to a pharmacy for a 
covered part D drug, such payments 
and adjustments shall be determined 
through the use of a quality measure 
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approved by the Secretary and estab-
lished by the working group estab-
lished under clause (iii). 
‘‘(III) NO
INCREASE
IN
COST 
SHARING.—Subclause (I) shall not 
apply in the case where application of 
such subclause would increase the 
amount owed by an individual in cost 
sharing above the amount such indi-
vidual would have owed in cost shar-
ing without application of such sub-
clause. 
‘‘(IV) DISCREPANCIES BETWEEN 
NEGOTIATED PRICES AND ACTUAL RE-
IMBURSEMENT.—In the case that the 
Secretary determines that the nego-
tiated price of a PDP sponsor applied 
at the point-of-sale with respect to a 
covered part D drug for a year dis-
pensed by a pharmacy was not equal 
to the total reimbursement made to 
such pharmacy for such drug for such 
year (taking into account any incen-
tive payments and adjustments and 
pharmacy price concessions, regard-
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less of when such payments and ad-
justments or price concessions were 
applied), such sponsor shall, not later 
than 90 days after receiving notice of 
such determination, furnish to the 
pharmacy that dispensed such drug 
and to the Secretary a written expla-
nation of why such negotiated price 
was not equal to such reimbursement. 
‘‘(V) 
DEFINITIONS.—In 
this 
clause: 
‘‘(aa) INCENTIVE PAYMENTS 
AND
ADJUSTMENTS.—The term 
‘incentive payments and adjust-
ments’ means, with respect to 
payment to a pharmacy by a 
PDP sponsor for a covered part 
D drug, any prospective or retro-
spective price concessions, re-
bates, discounts, fees, reconcili-
ation adjustments, bonuses, per-
formance payments, incentives, 
and any other adjustment to 
such 
payment 
determined 
through the use of a quality 
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measure, and any other adjust-
ment made with respect to such 
payment, regardless of when such 
payments and adjustments are 
applied. Such term does not in-
clude any manufacturer rebates 
or concessions made with respect 
to such drug. 
‘‘(bb) PDP SPONSOR.—The 
term ‘PDP sponsor’ includes an 
MA 
organization 
offering 
an 
MA–PD plan under part C and 
an entity that contracts with 
such sponsor or organization, 
such as a pharmacy benefit man-
ager. 
‘‘(cc) QUALITY MEASURE.— 
The 
term 
‘quality 
measure’ 
means performance criteria es-
tablished by a PDP sponsor (in-
cluding an entity that contracts 
with such sponsor, such as a 
pharmacy benefit manager) to 
determine the amount or applica-
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bility of incentive payments and 
adjustments. 
‘‘(iii) QUALITY
MEASURE
WORKING 
GROUP.— 
‘‘(I) IN
GENERAL.—Not later 
than September 1, 2018, the Sec-
retary shall convene a quality meas-
ures working group (in this clause re-
ferred to as the ‘working group’) for 
purposes of establishing quality meas-
ures (as defined in clause (ii)(IV)) 
that may be used by a PDP sponsor 
(as defined in clause (ii)) under this 
part. 
‘‘(II) COMPOSITION.—The work-
ing group shall consist of representa-
tives from each the following: 
‘‘(aa) PDP sponsors. 
‘‘(bb) 
Pharmacies 
rep-
resenting all pharmacy practice 
types. 
‘‘(cc) 
Pharmacy 
benefit 
managers. 
‘‘(dd) Patient advocacy or-
ganizations. 
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‘‘(ee) Such other entities as 
the Secretary determines appro-
priate. 
‘‘(III) 
DUTIES.—The 
working 
group shall provide for the establish-
ment of quality measures that may be 
used by a PDP sponsor (as defined in 
clause (ii)) with respect to incentive 
payments and adjustments (as defined 
in clause (ii)(IV)) for a pharmacy 
under this part. Such measures estab-
lished by such group shall include only 
such measures that— 
‘‘(aa) are reasonable and rel-
evant with respect to the practice 
type of the applicable pharmacy; 
and 
‘‘(bb) evaluate criteria over 
which the pharmacy has mean-
ingful control and ability to influ-
ence, consistent with the phar-
macy’s practice type.’’. 
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SEC. 3. PHARMACY BENEFIT MANAGER PROVISION OF IN-
FORMATION. 
(a) IN GENERAL.—Section 1150A(b)(2) of the Social 
Security Act (42 U.S.C. 1320b–23(b)(2)) is amended by 
striking ‘‘excluding’’ and inserting ‘‘including’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply with respect to contract years 
beginning on or after January 1, 2019. 
Æ 
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