I 
111TH CONGRESS 
2D SESSION 
H. R. 5234 
To amend the Public Health Service Act, the Employee Retirement Income 
Security Act, the Internal Revenue Code of 1986, and title XVIII of 
the Social Security Act to ensure transparency and proper operation 
of pharmacy benefit managers. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 6, 2010 
Mr. WEINER (for himself and Mr. MORAN of Kansas) introduced the following 
bill; which was referred to the Committee on Energy and Commerce, and 
in addition to the Committees on Ways and Means and Education and 
Labor, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To amend the Public Health Service Act, the Employee Re-
tirement Income Security Act, the Internal Revenue Code 
of 1986, and title XVIII of the Social Security Act 
to ensure transparency and proper operation of pharmacy 
benefit managers. 
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 Audit Reform 
and Transparency Act of 2010’’. 
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SEC. 2. PHARMACY BENEFITS MANAGER TRANSPARENCY 
AND PROPER OPERATION REQUIREMENTS. 
(a) IN GENERAL.— 
(1) AMENDMENTS
TO
THE
PUBLIC
HEALTH 
SERVICE ACT RELATING TO THE GROUP MARKET.— 
Subpart 2 of part A of title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg–4 et seq.) is 
amended by adding at the end the following: 
‘‘SEC. 
2729. 
PHARMACY 
BENEFITS 
MANAGER 
TRANS-
PARENCY 
AND 
PROPER 
OPERATION 
RE-
QUIREMENTS. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law, a group health plan, and a health insurance 
issuer providing health insurance coverage in connection 
with a group health plan, shall not enter into a contract 
with any pharmacy benefits manager to manage the pre-
scription drug coverage provided under such plan or insur-
ance coverage, or to control the costs of such prescription 
drug coverage, unless the PBM satisfies the following re-
quirements: 
‘‘(1) 
REQUIRED
DISCLOSURES
TO
GROUP 
HEALTH PLAN OR HEALTH INSURANCE ISSUER IN 
ANNUAL REPORT.— 
‘‘(A) IN GENERAL.—The PBM shall pro-
vide at least annually a report to each group 
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health plan and health insurance issuer with 
which the PBM has a contract. 
‘‘(B) CONTENTS.—With respect to the 
contract described under subparagraph (A), the 
report under subparagraph (A) shall include— 
‘‘(i) information on the number and 
total cost of prescriptions under the con-
tract filled at each of the following types of 
pharmacies: mail order pharmacies, spe-
ciality pharmacies, and retail pharmacies; 
‘‘(ii) the aggregate average payments 
under 
the 
contract, 
per 
prescription 
(weighted by prescription volume), made to 
such pharmacies; 
‘‘(iii) the average amount, per pre-
scription (weighted by prescription vol-
ume), that the PBM was paid by the plan 
or issuer for prescriptions filled at such 
pharmacies; 
‘‘(iv) the aggregate average payment 
per prescription (weighted by prescription 
volume) under the contract received from 
pharmaceutical manufacturers, including 
all rebates, discounts, price concessions, or 
administrative and other payments from 
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pharmaceutical manufacturers, and a de-
scription of the types of payments, the 
amount of these payments that were 
shared with the plan, and the percentage 
of prescriptions for which the PBM re-
ceived such payments; 
‘‘(v) information on the overall per-
centage of generic drugs dispensed under 
the contract separately at retail and mail 
order pharmacies, and the percentage of 
cases in which a generic drug is dispensed 
when available; and 
‘‘(vi) information on the percentage 
and number of cases under the contract in 
which individuals were switched, because of 
the policies of the PBM, from the drug 
originally prescribed to such individual by 
the health care provider to a drug with a 
higher cost to the plan or issuer, the ra-
tionale for these switches, and a descrip-
tion of the policies of the PBM applicable 
to such switches. 
‘‘(2) PBM INTERACTIONS WITH PHARMACIES.— 
‘‘(A) OBLIGATIONS
ON
PBM.—A PBM 
shall— 
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‘‘(i) provide to pharmacies that con-
tract with the PBM— 
‘‘(I) the methodology and re-
sources that the PBM utilizes to de-
termine reimbursement (including to 
calculate the maximum allowable cost 
list); and 
‘‘(II) timely updates to pharmacy 
product reimbursement benchmarks 
used to calculate prescription reim-
bursement to pharmacies; 
‘‘(ii) not less than one time per week, 
update the maximum allowable cost list 
and the reimbursement benchmarks; 
‘‘(iii) establish a process for providing 
prompt notification of the updates under 
clause (ii) to the pharmacies; and 
‘‘(iv) pay pharmacies promptly for 
clean claims, in a manner that is similar to 
the manner in which claims are paid under 
section 1860D–12(b)(4) of the Social Se-
curity Act (42 U.S.C. 1395w–112(b)(4)). 
‘‘(B) PBM LIMITATIONS.—A PBM may 
not— 
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‘‘(i) require that a pharmacy partici-
pate in one network of pharmacies man-
aged by such PBM as a condition for the 
pharmacy to participate in another net-
work managed by such PBM; 
‘‘(ii) exclude an otherwise qualified 
pharmacy from participation in a network 
of pharmacies managed by such PBM if 
the person or entity that owns the phar-
macy accepts the terms, conditions and re-
imbursement rates of the PBM’s contract; 
and 
‘‘(iii) automatically— 
‘‘(I) enroll a pharmacy in a con-
tract with the PBM for participation 
in a pharmacy network; or 
‘‘(II) modify an existing contract 
regarding participation in a pharmacy 
network, 
without a written agreement of the person 
or entity that owns the pharmacy. 
‘‘(C) CONTRACT REQUIRED.—The person 
or entity that owns a pharmacy shall sign a 
contract with a PBM before assuming responsi-
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