879 
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 
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 
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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-
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-
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881 
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-
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-
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882 
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 
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, 
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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 sec), section 
504 of the Rehabilitation Act of 1973 (29 
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 
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884 
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 
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 
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‘‘(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. 
‘‘(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, 
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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 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-
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887 
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: 
‘‘(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. 
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888 
‘‘(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 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). 
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889 
‘‘(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. 
‘‘(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 
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890 
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)— 
(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(f)) that 
violates section 726(a); an entity providing 
pharmacy benefit management services on be-
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891 
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 
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(f)) 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 
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892 
effort to comply with the requirements of sec-
tion 726.’’; and 
(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-
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893 
tered into on or after the effective date, with an applicable 
entity unless such applicable entity agrees to— 
‘‘(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 
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894 
under this subsection), shall submit to the group 
health plan a report in accordance with this section. 
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-
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viding pharmacy benefit management 
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 
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; 
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‘‘(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— 
‘‘(AA) 
prescription 
claims 
(including 
original 
prescriptions and refills); 
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‘‘(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 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 
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898 
which no claim is submitted under the 
plan; 
‘‘(IX) the total net spending on 
the drug; 
‘‘(X) the total amount received, 
or expected to be received, by the plan 
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 
‘‘(XII) to the extent feasible, in-
formation on the total amount of re-
muneration for such drug, including 
copayment assistance dollars paid, co-
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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; 
‘‘(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-
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900 
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 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 
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901 
‘‘(VII) the total out-of-pocket 
spending under the plan by partici-
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 
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902 
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 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-
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903 
macies to participants or beneficiaries 
in such plan; and 
‘‘(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; 
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‘‘(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 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), 
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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 
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 
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‘‘(III) states that participants 
and beneficiaries may request specific, 
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; 
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907 
‘‘(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) 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-
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908 
ty providing pharmacy benefit management 
services under such plan, including manda-
tory mail and specialty home delivery pro-
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.— 
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909 
‘‘(A) IN
GENERAL.—An entity providing 
pharmacy benefit management services on be-
half of a group health plan shall report infor-
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-
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910 
tion 164.504(a) of title 45, Code of Fed-
eral 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 sec), section 
504 of the Rehabilitation Act of 1973 (29 
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911 
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 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-
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912 
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, 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 
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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, 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— 
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‘‘(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 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 
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915 
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-
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. 
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916 
‘‘(5) NET SPENDING.—The term ‘net 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, cal-
culated after the application of rebates, fees, alter-
native 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 (29 U.S.C. 1002(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. 
‘‘(8) SPECIFIED LARGE EMPLOYER.—The term 
‘specified large employer’ means, in connection with 
a group health plan established or maintained by a 
single employer, with respect to a calendar year or 
a plan year, as applicable, an employer who em-
ployed an average of at least 100 employees on busi-
ness 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 estab-
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917 
lished or maintained by a plan sponsor described in 
clause (ii) or (iii) of section 3(16)(B) of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1002(16)(B)) that had an average of at least 
100 participants on business days during the pre-
ceding 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)).’’; 
(2) EXCEPTION FOR CERTAIN GROUP HEALTH 
PLANS.—Section 9831(a)(2) of the Internal Revenue 
Code of 1986 is amended by inserting ‘‘other than 
with respect to section 9826,’’ before ‘‘any group 
health plan’’. 
(3) ENFORCEMENT.—Section 4980D of the In-
ternal Revenue Code of 1986 is amended by adding 
at the end the following new subsection: 
‘‘(g) APPLICATION TO REQUIREMENTS IMPOSED ON 
CERTAIN
ENTITIES
PROVIDING
PHARMACY
BENEFIT 
MANAGEMENT SERVICES.—In the case of any requirement 
under section 9826 that applies with respect to an entity 
providing pharmacy benefit management services on be-
half of a group health plan, any reference in this section 
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918 
to such group health plan (and the reference in subsection 
(e)(1) to the employer) shall be treated as including a ref-
erence to such entity.’’. 
(4) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter B of chapter 100 of the Inter-
nal Revenue Code of 1986 is amended by adding at 
the end the following new item: 
‘‘Sec. 9826. Oversight of entities that provide pharmacy benefit management 
services.’’. 
SEC. 902. FULL REBATE PASS THROUGH TO PLAN; EXCEP-
TION FOR INNOCENT PLAN FIDUCIARIES. 
(a) IN GENERAL.—Section 408(b)(2) of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1108(b)(2)) is amended— 
(1) in subparagraph (B)(viii)— 
(A) 
by 
redesignating 
subclauses 
(II) 
through (IV) as subclauses (III) through (V), 
respectively; 
(B) in subclause (I)— 
(i) by striking ‘‘subclause (II)’’ and 
inserting ‘‘subclause (III)’’; and 
(ii) by striking ‘‘subclauses (II) and 
(III)’’ and inserting ‘‘subclauses (III) and 
(IV)’’; and 
(C) by inserting after subclause (I) the fol-
lowing: 
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919 
‘‘(II) Pursuant to subsection (a), subpara-
graphs (C) and (D) of section 406(a)(1) shall not 
apply to a responsible plan fiduciary, notwith-
standing any failure to remit required amounts 
under subparagraph (C)(i), if the following condi-
tions are met: 
‘‘(aa) The responsible plan fiduciary did 
not know that the covered service provider 
failed or would fail to make required remit-
tances and reasonably believed that the covered 
service 
provider 
remitted 
such 
required 
amounts. 
‘‘(bb) The responsible plan fiduciary, upon 
discovering that the covered service provider 
failed to remit the required amounts, requests 
in writing that the covered service provider 
remit such amounts. 
‘‘(cc) If the covered service provider fails 
to comply with a written request described in 
subclause (III) within 90 days of the request, 
the responsible plan fiduciary notifies the Sec-
retary of the covered service provider’s failure, 
in accordance with subclauses (III) and (IV).’’; 
and 
(2) by adding at the end the following: 
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920 
‘‘(C)(i)(I) For plan years beginning on or after 
the date that is 30 months after the date of enact-
ment of this subparagraph (referred to in this clause 
as the ‘effective date’), no contract or arrangement 
or renewal or extension of a contract or arrange-
ment, entered into on or after the effective date, for 
services between a covered plan and a covered serv-
ice provider, through a health insurance issuer offer-
ing group health insurance coverage, a third party 
administrator, an entity providing pharmacy benefit 
management services, or other entity, for pharmacy 
benefit management services, is reasonable within 
the meaning of this paragraph unless such entity 
providing pharmacy benefit management services— 
‘‘(aa) remits 100 percent of rebates, fees, 
alternative discounts, and other remuneration 
received from any applicable entity that are re-
lated to utilization of drugs or drug spending 
under such health plan or health insurance cov-
erage, to the group health plan or health insur-
ance issuer offering group health insurance cov-
erage; and 
‘‘(bb) does not enter into any contract for 
pharmacy benefit management services on be-
half of such a plan or coverage, with an applica-
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921 
ble entity unless 100 percent of rebates, fees, 
alternative discounts, and other remuneration 
received under such contract that are related to 
the utilization of drugs or drug spending under 
such group health plan or health insurance cov-
erage are remitted to the group health plan or 
health insurance issuer by the entity providing 
pharmacy benefit management services. 
‘‘(II) Nothing in subclause (I) shall be con-
strued to affect the term of a contract or arrange-
ment, as in effect on the effective date (as described 
in such subclause), except that such subclause shall 
apply to any renewal or extension of such a contract 
or arrangement entered into on or after such effec-
tive date, as so described. 
‘‘(ii) With respect to such rebates, fees, alter-
native discounts, and other remuneration— 
‘‘(I) the rebates, fees, alternative dis-
counts, and other remuneration under clause 
(i)(I) shall be— 
‘‘(aa) remitted— 
‘‘(AA) on a quarterly basis, to 
the group health plan or the group 
health insurance issuer, not later than 
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90 days after the end of each quarter; 
or 
‘‘(BB) in the case of an under-
payment in a remittance for a prior 
quarter, as soon as practicable, but 
not later than 90 days after notice of 
the underpayment is first given; 
‘‘(bb) fully disclosed and enumerated 
to the group health plan or health insur-
ance issuer; and 
‘‘(cc) returned to the covered service 
provider for pharmacy benefit management 
services on behalf of the group health plan 
if any audit by a plan sponsor, issuer or a 
third party designated by a plan sponsor, 
indicates that the amounts received are in-
correct after such amounts have been paid 
to the group health plan or health insur-
ance issuer; 
‘‘(II) the Secretary may establish proce-
dures for the remittance of rebates fees, alter-
native discounts, and other remuneration under 
subclause (I)(aa) and the disclosure of rebates, 
fees, alternative discounts, and other remunera-
tion under subclause (I)(bb); and 
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‘‘(III) the records of such rebates, fees, al-
ternative discounts, and other remuneration 
shall be available for audit by the plan sponsor, 
issuer, or a third party designated by a plan 
sponsor, not less than once per plan year. 
‘‘(iii) To ensure that an entity providing phar-
macy benefit management services is able to meet 
the 
requirements 
of 
clause 
(ii)(I), 
a 
rebate 
aggregator (or other purchasing entity designed to 
aggregate rebates) and an applicable group pur-
chasing organization shall remit such rebates to the 
entity providing pharmacy benefit management serv-
ices not later than 45 days after the end of each 
quarter. 
‘‘(iv) A third-party administrator of a group 
health plan, a health insurance issuer offering group 
health insurance coverage, or a covered service pro-
vider for pharmacy benefit management services 
under such health plan or health insurance coverage 
shall make rebate contracts with rebate aggregators 
or drug manufacturers available for audit by such 
plan sponsor or designated third party, subject to 
reasonable restrictions (as determined by the Sec-
retary) on confidentiality to prevent re-disclosure of 
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924 
such contracts or use of such information in audits 
for purposes unrelated to this section. 
‘‘(v) Audits carried out under clauses (ii)(III) 
and (iv) shall be performed by an auditor selected by 
the responsible plan fiduciary. Payment for such au-
dits shall not be made, whether directly or indirectly, 
by the entity providing pharmacy benefit manage-
ment services. 
‘‘(vi) Nothing in this subparagraph shall be 
construed to— 
‘‘(I) prohibit reasonable payments to enti-
ties offering pharmacy benefit management 
services for bona fide services using a fee struc-
ture not described in this subparagraph, pro-
vided that such fees are transparent and quan-
tifiable to group health plans and health insur-
ance issuers; 
‘‘(II) require a third-party administrator of 
a group health plan or covered service provider 
for pharmacy benefit management services 
under such health plan or health insurance cov-
erage to remit bona fide service fees to the 
group health plan; 
‘‘(III) limit the ability of a group health 
plan or health insurance issuer to pass through 
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925 
rebates, fees, alternative discounts, and other 
remuneration to the participant or beneficiary; 
or 
‘‘(IV) modify the requirements for the cre-
ation, receipt, maintenance, or transmission of 
protected health information under the privacy 
regulations promulgated under the Health In-
surance 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 regulations). 
‘‘(vii) For purposes of this subparagraph— 
‘‘(I) the terms ‘applicable entity’ and ‘ap-
plicable group purchasing organization’ have 
the meanings given such terms in section 
726(e); 
‘‘(II) the terms ‘covered plan’, ‘covered 
service provider’, and ‘responsible plan fidu-
ciary’ have the meanings given such terms in 
subparagraph (B); and 
‘‘(III) the terms ‘group health insurance 
coverage’, ‘health insurance coverage’, and 
‘health insurance issuer’ have the meanings 
given such terms in section 733.’’. 
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(b) RULE OF CONSTRUCTION.—Subclause (II)(aa) of 
section 408(b)(2)(B)(viii) of the Employee Retirement In-
come 
Security 
Act 
of 
1974 
(29 
U.S.C. 
1108(b)(2)(B)(viii)), as amended by subsection (a), shall 
not be construed to relieve or limit a responsible plan fidu-
ciary from the duty to monitor the practices of any covered 
service provider that contracts with the applicable covered 
plan, including for the purposes of ensuring the reason-
ableness of compensation. For purposes of this subsection, 
the terms ‘‘covered plan’’, ‘‘covered service provider’’, and 
‘‘responsible plan fiduciary’’ have the meanings given such 
terms in section 408(b)(2)(B)(ii) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1108(b)(2)(B)(ii)). 
(c) CLARIFICATION
OF COVERED SERVICE PRO-
VIDER.— 
(1) SERVICES.— 
(A) 
IN
GENERAL.—Section 
408(b)(2)(B)(ii)(I)(bb) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1108(b)(2)(B)(ii)(I)(bb)) is amended— 
(i) in subitem (AA) by striking ‘‘Bro-
kerage services,’’ and inserting ‘‘Services 
(including brokerage services),’’; and 
(ii) in subitem (BB)— 
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(I) by striking ‘‘Consulting,’’ and 
inserting ‘‘Other services,’’; and 
(II) by striking ‘‘related to the 
development or implementation of 
plan design’’ and all that follows 
through the period at the end and in-
serting ‘‘including any of the fol-
lowing: plan design, insurance or in-
surance product selection (including 
vision and dental), recordkeeping, 
medical management, benefits admin-
istration selection (including vision 
and dental), stop-loss insurance, phar-
macy benefit management services, 
wellness design and management serv-
ices, transparency tools, group pur-
chasing organization agreements and 
services, participation in and services 
from preferred vendor panels, disease 
management, compliance services, em-
ployee assistance programs, or third 
party administration services, or con-
sulting services related to any such 
services.’’. 
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928 
(B) SENSE OF CONGRESS.—It is the sense 
of Congress that the amendment made by sub-
paragraph (A) clarifies the existing requirement 
of covered service providers with respect to 
services 
described 
in 
section 
408(b)(2)(B)(ii)(I)(bb)(BB) of the Employee 
Retirement Income Security Act of 1974 (29 
U.S.C. 1108(b)(2)(B)(ii)(I)(bb)(BB)) that were 
in effect since the application date described in 
section 202(e) of the No Surprises Act (Public 
Law 116–260; 29 U.S.C. 1108 note), and does 
not impose any additional requirement under 
section 408(b)(2)(B) of such Act. 
(2) CERTAIN ARRANGEMENTS FOR PHARMACY 
BENEFIT MANAGEMENT SERVICES CONSIDERED AS 
INDIRECT.— 
(A) IN GENERAL.—Section 408(b)(2)(B)(i) 
of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1108(b)(2)(B)(i)) is 
amended— 
(i) by striking ‘‘requirements of this 
clause’’ and inserting ‘‘requirements of this 
subparagraph’’; and 
(ii) by adding at the end the fol-
lowing: ‘‘For purposes of applying section 
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406(a)(1)(C) with respect to a transaction 
described under this subparagraph or sub-
paragraph (C), a contract or arrangement 
for services between a covered plan and an 
entity providing services to the plan, in-
cluding a health insurance issuer providing 
health insurance coverage in connection 
with the covered plan, in which such entity 
contracts, in connection with such plan, 
with a service provider for pharmacy ben-
efit management services, shall be consid-
ered an indirect furnishing of goods, serv-
ices, or facilities between the covered plan 
and the service provider for pharmacy ben-
efit management services acting as the 
party in interest.’’. 
(B) HEALTH
INSURANCE
ISSUER
AND 
HEALTH
INSURANCE
COVERAGE
DEFINED.— 
Section 408(b)(2)(B)(ii)(I)(aa) of such Act (29 
U.S.C. 1108(b)(2)(B)(ii)(I)(aa)) is amended by 
inserting before the period at the end ‘‘and the 
terms ‘health insurance coverage’ and ‘health 
insurance issuer’ have the meanings given such 
terms in section 733(b)’’. 
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(C) 
TECHNICAL
AMENDMENT.—Section 
408(b)(2)(B)(ii)(I)(aa) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1108(b)(2)(B)(ii)(I)(aa)) is amended by insert-
ing ‘‘in’’ after ‘‘defined’’. 
SEC. 903. INCREASING TRANSPARENCY IN GENERIC DRUG 
APPLICATIONS. 
(a) IN GENERAL.—Section 505(j)(3) of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(3)) is 
amended by adding at the end the following: 
‘‘(H)(i) Upon request (in controlled correspondence 
or an analogous process) by a person that has submitted 
or intends to submit an abbreviated application under this 
subsection for a drug that is required by regulation to con-
tain one or more of the same inactive ingredients in the 
same concentrations as the listed drug referred to, or for 
which the Secretary determines there is a scientific jus-
tification for an approach that is in vitro, in whole or in 
part, to be used to demonstrate bioequivalence for a drug 
if such a drug contains one or more of the same inactive 
ingredients in the same concentrations as the listed drug 
referred to, the Secretary shall inform the person whether 
such drug is qualitatively and quantitatively the same as 
the listed drug. The Secretary may also provide such infor-
mation to such a person on the Secretary’s own initiative 
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during the review of an abbreviated application under this 
subsection for such drug. 
‘‘(ii) Notwithstanding section 301(j), if the Secretary 
determines that such drug is not qualitatively or quan-
titatively the same as the listed drug, the Secretary shall 
identify and disclose to the person— 
‘‘(I) the ingredient or ingredients that cause 
such drug not to be qualitatively or quantitatively 
the same as the listed drug; and 
‘‘(II) for any ingredient for which there is an 
identified quantitative deviation, the amount of such 
deviation. 
‘‘(iii) If the Secretary determines that such drug is 
qualitatively and quantitatively the same as the listed 
drug, the Secretary shall not change or rescind such deter-
mination after the submission of an abbreviated applica-
tion for such drug under this subsection unless— 
‘‘(I) the formulation of the listed drug has been 
changed and the Secretary has determined that the 
prior listed drug formulation was withdrawn for rea-
sons of safety or effectiveness; or 
‘‘(II) the Secretary makes a written determina-
tion that the prior determination must be changed 
because an error has been identified. 
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‘‘(iv) If the Secretary makes a written determination 
described in clause (iii)(II), the Secretary shall provide no-
tice and a copy of the written determination to the person 
making the request under clause (i). 
‘‘(v) The disclosures authorized under clauses (i) and 
(ii) are disclosures authorized by law, including for pur-
poses of section 1905 of title 18, United States Code. This 
subparagraph shall not otherwise be construed to author-
ize the disclosure of nonpublic qualitative or quantitative 
information about the ingredients in a listed drug, or to 
affect the status, if any, of such information as trade se-
cret or confidential commercial information for purposes 
of section 301(j) of this Act, section 552 of title 5, United 
States Code, or section 1905 of title 18, United States 
Code.’’. 
(b) GUIDANCE.— 
(1) IN
GENERAL.—Not later than one year 
after the date of enactment of this Act, the Sec-
retary of Health and Human Services shall issue 
draft guidance, or update guidance, describing how 
the Secretary will determine whether a drug is quali-
tatively and quantitatively the same as the listed 
drug 
(as 
such 
terms 
are 
used 
in 
section 
505(j)(3)(H) of the Federal Food, Drug, and Cos-
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933 
metic Act, as added by subsection (a)), including 
with respect to assessing pH adjusters. 
(2) PROCESS.—In issuing guidance under this 
subsection, the Secretary of Health and Human 
Services shall— 
(A) publish draft guidance; 
(B) provide a period of at least 60 days for 
comment on the draft guidance; and 
(C) after considering any comments re-
ceived and not later than one year after the 
close of the comment period on the draft guid-
ance, publish final guidance. 
(c) APPLICABILITY.—Section 505(j)(3)(H) of the 
Federal Food, Drug, and Cosmetic Act, as added by sub-
section (a), applies beginning on the date of enactment 
of this Act, irrespective of the date on which the guidance 
required by subsection (b) is finalized. 
SEC. 904. TITLE 35 AMENDMENTS. 
(a) IN GENERAL.—Section 271(e) of title 35, United 
States Code, is amended— 
(1) in paragraph (2)(C), in the flush text fol-
lowing clause (ii), by adding at the end the fol-
lowing: ‘‘With respect to a submission described in 
clause (ii), the act of infringement shall extend to 
any patent that claims the biological product, a 
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method of using the biological product, or a method 
or product used to manufacture the biological prod-
uct.’’; and 
(2) by adding at the end the following: 
‘‘(7)(A) Subject to subparagraphs (C), (D), and (E), 
if the sponsor of an approved application for a reference 
product, as defined in section 351(i) of the Public Health 
Service Act (42 U.S.C. 262(i)) (referred to in this para-
graph as the ‘reference product sponsor’), brings an action 
for infringement under this section against an applicant 
for approval of a biological product under section 351(k) 
of such Act that references that reference product (re-
ferred to in this paragraph as the ‘subsection (k) appli-
cant’), the reference product sponsor may assert in the 
action a total of not more than 20 patents of the type 
described in subparagraph (B), not more than 10 of which 
shall have issued after the date specified in section 
351(l)(7)(A) of such Act. 
‘‘(B) The patents described in this subparagraph are 
patents that satisfy each of the following requirements: 
‘‘(i) Patents that claim the biological product 
that is the subject of an application under section 
351(k) of the Public Health Service Act (42 U.S.C. 
262(k)) (or a use of that product) or a method or 
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935 
product used in the manufacture of such biological 
product. 
‘‘(ii) Patents that are included on the list of 
patents described in paragraph (3)(A) of section 
351(l) of the Public Health Service Act (42 U.S.C. 
262(l)), including as provided under paragraph (7) 
of such section 351(l). 
‘‘(iii) Patents that— 
‘‘(I) have an actual filing date of more 
than 4 years after the date on which the ref-
erence product is approved; or 
‘‘(II) include a claim to a method in a 
manufacturing process that is not used by the 
reference product sponsor. 
‘‘(C) The court in which an action described in sub-
paragraph (A) is brought may increase the number of pat-
ents limited under that subparagraph— 
‘‘(i) if the request to increase that number is 
made without undue delay; and 
‘‘(ii)(I) if the interest of justice so requires; or 
‘‘(II) for good cause shown, which— 
‘‘(aa) shall be established if the subsection 
(k) applicant fails to provide information re-
quired section 351(k)(2)(A) of the Public 
Health Service Act (42 U.S.C. 262(k)(2)(A)) 
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936 
that would enable the reference product sponsor 
to form a reasonable belief with respect to 
whether a claim of infringement under this sec-
tion could reasonably be asserted; and 
‘‘(bb) may be established— 
‘‘(AA) if there is a material change to 
the biological product (or process with re-
spect to the biological product) of the sub-
section (k) applicant that is the subject of 
the application; 
‘‘(BB) if, with respect to a patent on 
the supplemental list described in section 
351(l)(7)(A) of Public Health Service Act 
(42 U.S.C. 262(l)(7)(A)), the patent would 
have issued before the date specified in 
such section 351(l)(7)(A) but for the fail-
ure of the Office to issue the patent or a 
delay in the issuance of the patent, as de-
scribed in paragraph (1) of section 154(b) 
and subject to the limitations under para-
graph (2) of such section 154(b); or 
‘‘(CC) for another reason that shows 
good cause, as determined appropriate by 
the court. 
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937 
‘‘(D) In determining whether good cause has been 
shown for the purposes of subparagraph (C)(ii)(II), a 
court may consider whether the reference product sponsor 
has provided a reasonable description of the identity and 
relevance of any information beyond the subsection (k) ap-
plication that the court believes is necessary to enable the 
court to form a belief with respect to whether a claim of 
infringement under this section could reasonably be as-
serted. 
‘‘(E) The limitation imposed under subparagraph 
(A)— 
‘‘(i) shall apply only if the subsection (k) appli-
cant completes all actions required under paragraphs 
(2)(A), (3)(B)(ii), (5), (6)(C)(i), (7), and (8)(A) of 
section 351(l) of the Public Health Service Act (42 
U.S.C. 262(l)); and 
‘‘(ii) shall not apply with respect to any patent 
that claims, with respect to a biological product, a 
method for using that product in therapy, diagnosis, 
or prophylaxis, such as an indication or method of 
treatment or other condition of use.’’. 
(b) APPLICABILITY.—The amendments made by sub-
section (a) shall apply with respect to an application sub-
mitted under section 351(k) of the Public Health Service 
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938 
Act (42 U.S.C. 262(k)) on or after the date of enactment 
of this Act. 
TITLE X—MISCELLANEOUS 
SEC. 1001. TWO-YEAR EXTENSION OF SAFE HARBOR FOR 
ABSENCE OF DEDUCTIBLE FOR TELEHEALTH. 
(a) IN GENERAL.—Section 223(c)(2)(E)(ii) of the In-
ternal Revenue Code of 1986 is amended by striking ‘‘Jan-
uary 1, 2025’’ and inserting ‘‘January 1, 2027’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2024. 
SEC. 1002. ELIGIBILITY FOR FEHBP ENROLLMENT FOR 
MEMBERS OF CONGRESS. 
(a) 
PPACA.—Subparagraph 
(D) 
of 
section 
1312(d)(3) of the Patient Protection and Affordable Care 
Act (Public Law 111–148) is amended— 
(1) in the subparagraph heading, by striking 
‘‘MEMBERS
OF
CONGRESS’’ and inserting ‘‘CON-
GRESSIONAL STAFF’’; and 
(2) in clause (i)— 
(A) by striking ‘‘Members of Congress 
and’’; and 
(B) by striking ‘‘a Member of Congress 
or’’. 
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939 
(b) FEHBP.—Section 8906 of title 5, United States 
Code, is amended by adding at the end the following: 
‘‘(h)(1) Any Member of Congress may elect to enroll 
in a health benefits plan offered through the D.C. Small 
Business Health Options Program created under the Pa-
tient Protection and Affordable Care Act (Public Law 
111–148) (or an amendment made by such Act) and, if 
so enrolled, shall receive Government contributions under 
this section. 
‘‘(2) Contributions under this section— 
‘‘(A) except as provided in paragraph (1), may 
not be provided with respect to any health benefits 
plan— 
‘‘(i) created under such Act or an amend-
ment made by such Act; or 
‘‘(ii) offered through an exchange estab-
lished under such Act or an amendment made 
by such Act; and 
‘‘(B) may be provided with respect to either en-
rollment in such a health plan described under para-
graph (1) or to enrollment in a health benefits plan 
offered under this chapter, but not both.’’. 
(c) EFFECTIVE DATE.—This section and the amend-
ments made by this section— 
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940 
(1) shall apply with respect to plan years begin-
ning on or after January 1, 2026; or 
(2) in the case that the Office of Personnel 
Management establishes an open enrollment period 
during plan year 2025 for individuals to enroll in a 
plan approved or contracted for under chapter 89 of 
title 5, United States Code, for coverage that begins 
during such plan year, shall apply beginning on the 
first day that such coverage is effective. 
DIVISION F—A STRONGER 
WORKFORCE FOR AMERICA ACT 
SEC. 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This division may be cited as the 
‘‘A Stronger Workforce for America Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this division is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—WORKFORCE DEVELOPMENT ACTIVITIES 
Subtitle A—General Provisions 
Sec. 101. Purposes. 
Sec. 102. Definitions. 
Sec. 103. Table of contents amendments. 
Subtitle B—System Alignment 
CHAPTER 1—STATE PROVISIONS 
Sec. 111. State workforce development board. 
Sec. 112. Unified State plan. 
CHAPTER 2—LOCAL PROVISIONS 
Sec. 115. Workforce development areas. 
Sec. 116. Local workforce development boards. 
Sec. 117. Local plan. 
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941 
CHAPTER 3—PERFORMANCE ACCOUNTABILITY 
Sec. 119. Performance accountability system. 
Subtitle C—Workforce Investment Activities and Providers 
CHAPTER 1—WORKFORCE INVESTMENT ACTIVITIES AND PROVIDERS 
Sec. 121. Establishment of one-stop delivery systems. 
Sec. 122. Identification of eligible providers of training services. 
Sec. 123. Eligible providers of youth workforce investment activities. 
CHAPTER 2—YOUTH WORKFORCE INVESTMENT ACTIVITIES 
Sec. 131. Reservations; Reallocation. 
Sec. 132. Use of funds for youth workforce investment activities. 
CHAPTER 3—ADULT AND DISLOCATED WORKER EMPLOYMENT AND 
TRAINING ACTIVITIES 
Sec. 141. State allotments. 
Sec. 142. Reservations for State activities; within State allocations; Realloca-
tion. 
Sec. 143. Use of funds for employment and training activities. 
CHAPTER 4—GENERAL WORKFORCE INVESTMENT PROVISIONS 
Sec. 145. Authorization of appropriations. 
Subtitle D—Job Corps 
Sec. 151. Purposes. 
Sec. 152. Definitions. 
Sec. 153. Individuals eligible for the Job Corps. 
Sec. 154. Recruitment, screening, selection, and assignment of enrollees. 
Sec. 155. Job Corps Campuses. 
Sec. 156. Program activities. 
Sec. 157. Counseling and job placement. 
Sec. 158. Support. 
Sec. 159. Operations. 
Sec. 160. Standards of conduct. 
Sec. 161. Community participation. 
Sec. 162. Workforce councils. 
Sec. 163. Advisory committees. 
Sec. 164. Experimental projects and technical assistance. 
Sec. 165. Special provisions. 
Sec. 166. Management information. 
Sec. 167. Job Corps oversight and reporting. 
Sec. 168. Authorization of appropriations. 
Sec. 169. Conforming amendments. 
Subtitle E—National Programs 
Sec. 171. Native American programs. 
Sec. 172. Migrant and seasonal farmworker programs. 
Sec. 173. Technical assistance. 
Sec. 174. Evaluations and research. 
Sec. 175. National dislocated worker grants. 
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Sec. 176. YouthBuild Program. 
Sec. 177. Reentry employment opportunities. 
Sec. 178. Youth apprenticeship readiness grant program. 
Sec. 179. Strengthening community colleges grant program. 
Sec. 180. Authorization of appropriations. 
Subtitle F—Administration 
Sec. 191. Requirements and restrictions. 
Sec. 192. Monitoring. 
Sec. 193. Fiscal controls; sanctions. 
Sec. 194. Administrative adjudication. 
Sec. 195. Judicial review. 
Sec. 196. General waivers of statutory or regulatory requirements. 
Sec. 197. State flexibility pilot authority. 
Sec. 198. General program requirements. 
TITLE II—ADULT EDUCATION AND LITERACY 
Sec. 201. Purpose. 
Sec. 202. Definitions. 
Sec. 203. Authorization of appropriations. 
Sec. 204. Special rule. 
Sec. 205. Performance accountability system. 
Sec. 206. Matching requirement. 
Sec. 207. State leadership activities. 
Sec. 208. Programs for corrections education and other institutionalized indi-
viduals. 
Sec. 209. Grants and contracts for eligible providers. 
Sec. 210. Local application. 
Sec. 211. Local administrative cost limits. 
Sec. 212. National leadership activities. 
Sec. 213. Integrated English literacy and civics education. 
TITLE III—AMENDMENTS TO OTHER LAWS 
Sec. 301. Amendments to the Wagner-Peyser Act. 
Sec. 302. Job training grants. 
Sec. 303. Access to National Directory of New Hires. 
Sec. 304. References to other laws. 
TITLE IV—DEPARTMENT OF LABOR TECHNICAL ASSISTANCE 
Sec. 401. Technical assistance for transforming to competitive integrated em-
ployment. 
TITLE V—GENERAL PROVISIONS 
Sec. 501. Report on data capability and interoperability of Federal and State 
databases and data exchange agreements. 
Sec. 502. Effective dates; transition authority. 
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TITLE I—WORKFORCE 
DEVELOPMENT ACTIVITIES 
Subtitle A—General Provisions 
SEC. 101. PURPOSES. 
Section 2 of the Workforce Innovation and Oppor-
tunity Act (29 U.S.C. 3101) is amended— 
(1) in paragraph (1), by striking ‘‘support serv-
ices’’ and inserting ‘‘supportive services’’; 
(2) in paragraph (2), by inserting ‘‘, for youth 
and adults,’’ after ‘‘economic development systems’’; 
(3) in paragraph (6), by striking ‘‘of the work-
force, reduce welfare dependency,’’ and inserting ‘‘of 
the workforce, provide economic mobility, reduce de-
pendency on public assistance programs,’’; and 
(4) by adding at the end the following: 
‘‘(7) To prepare a globally competitive work-
force by developing robust education and skills devel-
opment programs for youth to access career path-
ways that will lead such youth into in-demand indus-
try sectors and occupations.’’. 
SEC. 102. DEFINITIONS. 
(a) FOUNDATIONAL SKILL NEEDS.—Section 3(5) of 
the Workforce Innovation and Opportunity Act (29 U.S.C. 
3102(5)) is amended to read as follows: 
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‘‘(5) FOUNDATIONAL SKILL NEEDS.—The term 
‘foundational skill needs’ means, with respect to an 
individual who is a youth or adult, that the indi-
vidual— 
‘‘(A) has English reading, writing, or com-
puting skills at or below the 8th grade level on 
a generally accepted standardized test; or 
‘‘(B) is unable to compute or solve prob-
lems, is unable to read, write, or speak English, 
or does not possess digital literacy skills, at a 
level necessary to function in the individual’s 
education or occupation, in the individual’s 
family, or in society.’’. 
(b) CAREER PATHWAY.—Section 3(7)(F) of the 
Workforce Innovation and Opportunity Act (29 U.S.C. 
3102(7)(F)) is amended by striking ‘‘secondary school di-
ploma’’ and inserting ‘‘regular high school diploma’’. 
(c) EMPLOYER-DIRECTED SKILLS DEVELOPMENT.— 
Section 3(14) of the Workforce Innovation and Oppor-
tunity Act (29 U.S.C. 3102(14)) is amended to read as 
follows: 
‘‘(14) EMPLOYER-DIRECTED SKILLS DEVELOP-
MENT.—The term ‘employer-directed skills develop-
ment’ means skills development provided through a 
program— 
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‘‘Sec. 174. Strengthening community colleges workforce development grants 
program.’’; and 
(3) by striking the item relating to section 190 
and inserting the following: 
‘‘Sec. 190. State flexibility pilot authority.’’. 
Subtitle B—System Alignment 
CHAPTER 1—STATE PROVISIONS 
SEC. 111. STATE WORKFORCE DEVELOPMENT BOARD. 
Section 101 of the Workforce Innovation and Oppor-
tunity Act (29 U.S.C. 3112) is amended— 
(1) in subsection (b)(1)(C)(ii)(IV), by striking 
‘‘out-of-school youth’’ and inserting ‘‘opportunity 
youth’’; and 
(2) in subsection (d)— 
(A) in paragraph (3)(B), by striking ‘‘low- 
skilled adults’’ and inserting ‘‘adults with 
foundational skill needs’’; and 
(B) in paragraph (5)(A), by inserting after 
‘‘including strategies’’ the following: ‘‘(such as 
the principles of universal design for learning)’’. 
SEC. 112. UNIFIED STATE PLAN. 
Section 102 of the Workforce Innovation and Oppor-
tunity Act (29 U.S.C. 3112) is amended— 
(1) in subsection (b)— 
(A) in paragraph (1)— 
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(i) by redesignating subparagraphs 
(C) through (E) as subparagraphs (D) 
through (F), respectively; 
(ii) by inserting the following after 
subparagraph (B): 
‘‘(C) a description of— 
‘‘(i) how the State will use real-time 
labor market information to continually as-
sess the economic conditions and workforce 
trends described in subparagraphs (A) and 
(B); and 
‘‘(ii) how the State will communicate 
changes in such conditions or trends to the 
workforce system in the State;’’; 
(iii) in subparagraph (D), as so redes-
ignated, by inserting ‘‘the extent to which 
such activities are evidence-based,’’ after 
‘‘of such activities,’’; 
(iv) in subparagraph (E), as so redes-
ignated— 
(I) by striking ‘‘and for meeting 
the skilled workforce needs of employ-
ers’’ and inserting ‘‘and for preparing 
workers to meet the skilled workforce 
needs of employers and to enter and 
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