I 
116TH CONGRESS 
1ST SESSION H. R. 5304 
To amend title XXVII of the Public Health Service Act to require health 
plan oversight of pharmacy benefit manager services, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 4, 2019 
Mr. SCHRADER (for himself and Mr. GIANFORTE) introduced the following 
bill; which was referred to the Committee on Energy and Commerce 
A BILL 
To amend title XXVII of the Public Health Service Act 
to require health plan oversight of pharmacy benefit 
manager services, 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 ‘‘PBM Transparency 
in Prescription Drug Costs Act’’. 
SEC. 2. HEALTH PLAN OVERSIGHT OF PHARMACY BENEFIT 
MANAGER SERVICES. 
Subpart II of part A of title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg–11 et seq.) is 
amended by adding at the end the following: 
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‘‘SEC. 2729A. HEALTH PLAN OVERSIGHT OF PHARMACY 
BENEFIT MANAGER SERVICES. 
‘‘(a) IN GENERAL.—A group health plan or health 
insurance issuer offering group or individual health insur-
ance coverage or an entity or subsidiary providing phar-
macy benefits management services shall not enter into 
a contract with a drug manufacturer, distributor, whole-
saler, subcontractor, rebate aggregator, or any associated 
third party that limits the disclosure of information to 
plan sponsors in such a manner that prevents the plan 
or coverage, or an entity or subsidiary providing pharmacy 
benefits management services on behalf of a plan or cov-
erage from making the reports described in subsection (b). 
‘‘(b) REPORTS TO GROUP PLAN SPONSORS.— 
‘‘(1) IN
GENERAL.—Beginning with the first 
plan year that begins after the date of enactment of 
this section, not less frequently than once every six 
months, a health insurance issuer offering group 
health insurance coverage or an entity providing 
pharmacy benefits management services on behalf of 
a group health plan shall submit to the self-funded 
group health plan and at the request of any other 
group health plan a report in accordance with this 
subsection and make such report available to the 
plan sponsor in a machine-readable format. Each 
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such report shall include, with respect to the applica-
ble group health plan or health insurance coverage— 
‘‘(A) information collected from drug man-
ufacturers by such issuer or entity on the total 
amount of copayment assistance dollars paid, or 
copayment cards applied, that were funded by 
the drug manufacturer with respect to the en-
rollees in such plan or coverage; 
‘‘(B) a list of each covered drug dispensed 
during the reporting period, including, with re-
spect to each such drug during the reporting 
period— 
‘‘(i) the brand name, chemical entity, 
and National Drug Code; 
‘‘(ii) the number of enrollees for 
whom the drug was filled during the plan 
year, the total number of prescription fills 
for the drug (including original prescrip-
tions and refills), and the total number of 
dosage units of the drug dispensed across 
the plan year, including whether the dis-
pensing channel was by retail, mail order, 
or specialty pharmacy; 
‘‘(iii) the wholesale acquisition cost, 
listed as cost per days supply and cost per 
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such therapeutic category or class of drugs, 
during the reporting period— 
‘‘(i) total gross spending by the plan, 
before manufacturer rebates, fees, or other 
manufacturer remuneration; 
‘‘(ii) the number of enrollees who 
filled a prescription for a drug in that cat-
egory or class; 
‘‘(iii) if applicable to that category or 
class, a description of the formulary tiers 
and utilization mechanisms (such as prior 
authorization or step therapy) employed 
for drugs in that category or class; 
‘‘(iv) the total out-of-pocket spending 
by enrollees, including enrollee spending 
through copayments, coinsurance, and 
deductibles; and 
‘‘(v) for each therapeutic category or 
class under which three or more drugs are 
marketed and available— 
‘‘(I) the amount received, or ex-
pected to be received, from drug man-
ufacturers in rebates, fees, alternative 
discounts, or other remuneration— 
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‘‘(aa) to be paid by drug 
manufacturers for claims in-
curred during the reporting pe-
riod; or 
‘‘(bb) that is related to utili-
zation of drugs, in such thera-
peutic category or class; 
‘‘(II) the total net spending by 
the health plan or health insurance 
coverage on that category or class of 
drugs; and 
‘‘(III) the net price per dosage 
unit or course of treatment incurred 
by the health plan or health insurance 
coverage and its enrollees, after man-
ufacturer rebates, fees, and other re-
muneration for drugs dispensed within 
such therapeutic category or class 
during the reporting period; 
‘‘(D) total gross spending on prescription 
drugs by the plan or coverage during the re-
porting period, before rebates and other manu-
facturer fees or remuneration; 
‘‘(E) total amount received, or expected to 
be received, by the health plan or health insur-
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ance coverage in drug manufacturer rebates, 
fees, alternative discounts, and all other remu-
neration received from the manufacturer or any 
third party related to utilization of drug or 
drug spending under that health plan or health 
insurance coverage during the reporting period; 
‘‘(F) the total net spending on prescription 
drugs by the health plan or health insurance 
coverage during the reporting period; and 
‘‘(G) amounts paid directly or indirectly in 
rebates, fees, or any other type of remuneration 
to brokers, consultants, advisors, or any other 
individual or firm who referred the group health 
plan’s or health insurance issuer’s business to 
the pharmacy benefit manager. 
‘‘(2) PRIVACY REQUIREMENTS.—Health insur-
ance issuers offering group health insurance cov-
erage and entities providing pharmacy benefits man-
agement services on behalf of a group health plan 
shall provide information under paragraph (1) in a 
manner consistent with the privacy, security, and 
breach notification regulations promulgated under 
section 264(c) of the Health Insurance Portability 
and Accountability Act of 1996 (or successor regula-
tions), and shall restrict the use and disclosure of 
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such information according to such privacy regula-
tions. 
‘‘(3) DISCLOSURE AND REDISCLOSURE.— 
‘‘(A) LIMITATION
TO
BUSINESS
ASSOCI-
ATES.—A group health plan receiving a report 
under paragraph (1) may disclose such informa-
tion only to business associates of such plan as 
defined in section 160.103 of title 45, Code of 
Federal Regulations (or successor regulations). 
‘‘(B) CLARIFICATION REGARDING PUBLIC 
DISCLOSURE
OF
INFORMATION.—Nothing in 
this section prevents a health insurance issuer 
offering group health insurance coverage or an 
entity providing pharmacy benefits management 
services on behalf of a group health plan from 
placing reasonable restrictions on the public dis-
closure of the information contained in a report 
described in paragraph (1). 
‘‘(c) LIMITATIONS ON SPREAD PRICING.— 
‘‘(1) PASS-THROUGH OFFERING TO PLAN.—A 
designated plan administrator of an applicable self- 
insured health plan, or an entity providing pharmacy 
benefit management services to such health plan 
shall offer at least one contractual arrangement that 
does not charge the plan or enrollee, a price for a 
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prescription drug that exceeds the price paid to the 
pharmacy, excluding penalties or fees paid by phar-
macies to such plan, issuer, or entity. 
‘‘(2) DEFAULT TO PASS-THROUGH PRICING.— 
For purposes of paragraph (1), a designated plan 
administrator of an applicable self-insured health 
plan, or an entity providing pharmacy benefit man-
agement services to such health plan shall not 
charge the plan or enrollee an amount for a 
presciption drug that exceeds the price paid to the 
pharmacy, excluding penalties paid by pharmacies to 
such plan or entity, without the express permission 
of the health plan sponsor. 
‘‘(3) SUPPLEMENTARY REPORTING FOR INTRA- 
COMPANY PRESCRIPTION DRUG TRANSACTIONS.—A 
health insurance issuer of group health insurance 
coverage or an entity providing pharmacy benefits 
management services under a group health plan or 
group health insurance coverage that conducts 
transactions with a wholly or partially owned phar-
macy, as described in paragraph (2), shall submit, 
together with the report under subsection (b), a sup-
plementary quarterly report to the plan sponsor that 
includes— 
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‘‘(A) an explanation of any benefit design 
parameters that encourage enrollees in the plan 
or coverage to fill prescriptions at mail order, 
specialty, or retail pharmacies that are wholly 
or partially owned by that issuer or entity; 
‘‘(B) the percentage of total prescriptions 
charged to the plan, coverage, or enrollees in 
the plan or coverage, that were dispensed by 
mail order, specialty, or retail pharmacies that 
are wholly or partially owned by the issuer or 
entity providing pharmacy benefits management 
services; and 
‘‘(C) a list of all drugs dispensed by such 
wholly or partially owned pharmacy and 
charged to the plan or coverage, or enrollees of 
the plan or coverage, during the applicable 
quarter, and, with respect to each drug— 
‘‘(i) the amount charged per dosage 
unit or course of treatment with respect to 
enrollees in the plan or coverage, including 
amounts charged to the plan or coverage 
and amounts charged to the enrollee; 
‘‘(ii) the median amount charged to 
the plan or coverage, per dosage unit or 
course 
of 
treatment, 
and 
including 
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