ownership interest or that has an ownership in-
terest in the PBM; or 
‘‘(B) provides an incentive (including a re-
duced copayment or coinsurance) to a plan en-
rollee to encourage the enrollee to use a retail 
pharmacy, mail order pharmacy, specialty phar-
macy, or other pharmacy entity providing phar-
macy services in which the PBM has an owner-
ship interest or that has an ownership interest 
in the PBM, if the incentive is applicable only 
to such pharmacies.’’. 
(b) REGULAR UPDATE
OF PRESCRIPTION DRUG 
PRICING STANDARD.—Paragraph (6) of section 1860D– 
12(b) of the Social Security Act (42 U.S.C. 1395w– 
112(b)) is amended to read as follows: 
‘‘(6) REGULAR
UPDATE
OF
PRESCRIPTION 
DRUG PRICING STANDARD.— 
‘‘(A) IN GENERAL.—If the PDP sponsor of 
a prescription drug plan (or MA organization 
offering an MA–PD plan) uses a standard for 
reimbursement (as described in subparagraph 
(B)) of pharmacies based on the cost of a drug, 
each contract entered into with such sponsor 
under this part (or organization under part C) 
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with respect to the plan shall provide that the 
sponsor (or organization) shall— 
‘‘(i) update such standard not less fre-
quently than once every 7 days, beginning 
with an initial update on January 1 of 
each year, to accurately reflect the market 
price of acquiring the drug; 
‘‘(ii) disclose to applicable pharmacies 
and the respective contracting entities of 
such pharmacies the sources used for mak-
ing any such update immediately without 
requirement of request; 
‘‘(iii) if the source for such a standard 
for reimbursement is not publicly available, 
disclose to the applicable pharmacies and 
the respective contracting entities of such 
pharmacies all individual drug prices to be 
so updated in advance of the use of such 
prices for the reimbursement of claims; 
‘‘(iv) establish a process for applicable 
pharmacies and respective contracting enti-
ties to appeal, investigate, and resolve dis-
putes regarding individual drug prices that 
are less than the pharmacy acquisition 
price for such drug, which must be adju-
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pamtmann on DSKBFK8HB2PROD with BILLS
dicated within 7 days of the pharmacy fil-
ing its appeal; and 
‘‘(v) provide to applicable pharmacies 
and respective contracting entities all such 
pricing data in an .xml spreadsheet format 
or a comparable easily accessible and com-
plete spreadsheet format. 
‘‘(B) 
PRESCRIPTION
DRUG
PRICING 
STANDARD
DEFINED.—For purposes of sub-
paragraph (A), a standard for reimbursement 
of a pharmacy is any methodology or formula 
for varying the pricing of a drug or drugs dur-
ing the term of the pharmacy reimbursement 
contract that is based on the cost of the drug 
involved, including drug pricing references and 
amounts that are based upon average wholesale 
price, wholesale average cost, average manufac-
turer price, average sales price, maximum al-
lowable cost (MAC), or other costs, whether 
publicly available or not.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning on or after 
January 1, 2020. 
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SEC. 3. PRESCRIPTION DRUG TRANSPARENCY IN THE FED-
ERAL EMPLOYEES HEALTH BENEFITS PRO-
GRAM. 
(a) IN GENERAL.—Section 8902 of title 5, United 
States Code, is amended by adding at the end the fol-
lowing new subsections: 
‘‘(p) A contract may not be made or a plan approved 
under this chapter under which a carrier has an agree-
ment with a pharmacy benefits manager (in this sub-
section referred to as a ‘PBM’) to manage prescription 
drug coverage or to control the costs of the prescription 
drug coverage if the PBM— 
‘‘(1) requires that an individual enrolled under 
such contract or plan use a retail pharmacy, mail 
order pharmacy, specialty pharmacy, or other phar-
macy entity providing pharmacy services in which 
the PBM has an ownership interest or that has an 
ownership interest in the PBM; or 
‘‘(2) provides an incentive (including a reduced 
copayment or coinsurance) to a plan enrollee to en-
courage the enrollee to use a retail pharmacy, mail 
order pharmacy, specialty pharmacy, or other phar-
macy entity providing pharmacy services in which 
the PBM has an ownership interest or that has an 
ownership interest in the PBM, if the incentive is 
applicable only to such pharmacies. 
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pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(q)(1) If a contract made or plan approved under 
this chapter provides for a standard for reimbursement 
(as described in paragraph (2)) with respect to a prescrip-
tion drug plan, such contract or plan shall provide that 
the applicable carrier— 
‘‘(A) update such standard not less frequently 
than once every 7 days, beginning with an initial up-
date on January 1 of each year, to accurately reflect 
the market price of acquiring the drug; 
‘‘(B) disclose to applicable pharmacies and the 
respective contracting entities of such pharmacies 
the sources used for making any such update imme-
diately without requirement of request; 
‘‘(C) if the source for such a standard for reim-
bursement is not publicly available, disclose to the 
applicable pharmacies and respective contracting en-
tities of such pharmacies all individual drug prices 
to be so updated in advance of the use of such prices 
for the reimbursement of claims; 
‘‘(D) establish a process for applicable phar-
macies and respective contracting entities to appeal, 
investigate, and resolve disputes regarding individual 
drug prices that are less than the pharmacy acquisi-
tion price for such drug, which must be adjudicated 
within 7 days of the pharmacy filing its appeal; and 
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‘‘(E) provide to applicable pharmacies and re-
spective contracting entities all such pricing data in 
an .xml spreadsheet format or a comparable easily 
accessible and complete spreadsheet format. 
‘‘(2) For purposes of paragraph (1), a standard for 
reimbursement of a pharmacy is any methodology or for-
mula for varying the pricing of a drug or drugs during 
the term of the pharmacy reimbursement contract that is 
based on the cost of the drug involved, including drug pric-
ing references and amounts that are based upon average 
wholesale price, wholesale average cost, average manufac-
turer price, average sales price, maximum allowable cost, 
or other costs, whether publicly available or not.’’. 
(b) APPLICATION.—The amendment made by sub-
section (a) shall apply to any contract entered into under 
section 8902 of title 5, United States Code, on or after 
the date of enactment of this section. 
Æ 
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