To ensure patient choice in pharmacies by regulating pharmacy benefit managers and to establish a program to improve access to prescription drugs for certain individuals.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Patient Health and Real Medication 
Access Cost Savings Act of 2009'' or the ``PHARMACY Bill''.

SEC. 2. PATIENT CHOICE.

    A consumer shall have the right to choose to purchase prescription 
drugs from any domestic pharmacy that meets all applicable Federal and 
State licence and permit requirements.

SEC. 3. REGULATION OF PHARMACY BENEFIT MANAGERS.

    Not later than January 1, 2011, the Secretary of Health and Human 
Services shall issue regulations to ensure the following:
            (1) Access to and choice of pharmacy.--
                    (A) Incentives.--A pharmacy benefit manager 
                (referred to in this section as a ``PBM'') may not 
                provide incentives (including variations in premiums, 
                deductibles, co-payments, or co-insurance rates) to 
                enrollees of pharmacy benefit plans administered by 
                such PBM for the purpose of encouraging such enrollees 
                to use certain pharmacies (including mail order 
                pharmacies, speciality drug pharmacies, or other 
                entities) unless the PBM offers the same incentives for 
                all pharmacies in the network for such plan.
                    (B) Mandates.--A PBM may not refer, coerce, or 
                mandate that an enrollee of a pharmacy benefit plan 
                administered by such PBM use a specific mail order 
                pharmacy, specialty drug pharmacy, or other entity--
                            (i) if the PBM has an ownership interest in 
                        a such pharmacy or entity; or
                            (ii) if the pharmacy or entity has an 
                        ownership interest in such PBM.
                    (C) Pharmacy networks.--A PBM or pharmacy benefit 
                plan sponsor may not exclude a pharmacy from a pharmacy 
                network if--
                            (i) the pharmacy agrees to the terms of the 
                        network contract;
                            (ii) the pharmacy meets all applicable 
                        Federal and State licence and permit 
                        requirements; and
                            (iii) the owners of the pharmacy have not 
                        been convicted of a Federal crime related to 
                        owning or managing a pharmacy.
            (2) Encourage generic drugs.--
                    (A) Cost to consumers.--
                            (i) In general.--Subject to clause (iii), a 
                        PBM shall ensure that enrollees of pharmacy 
                        benefit plans administered by such a PBM pay a 
                        copayment of 20 percent for brand name drugs, 
                        not to exceed a maximum amount of $150 per 
                        prescription.
                            (ii) Annual updates to amount.--The maximum 
                        amount under clause (i) shall be updated 
                        annually for inflation based on the consumer 
                        price index.
                            (iii) Exception for state medicaid 
                        programs.--Clause (i) shall not apply to a PBM 
                        with respect to enrollees of a State Medicaid 
                        program that limits or prohibits copayments for 
                        prescription drugs.
                    (B) Payments to pharmacies.--
                            (i) In general.--With respect to a pharmacy 
                        benefit plan that is at least partially funded 
                        with Federal funds, the PBM administering such 
                        plan shall reimburse a pharmacy that is in the 
                        network for such a plan at least--
                                    (I) 107 percent of the Wholesale 
                                Acquisition Cost plus a minimum 
                                professional dispensing fee of $4.25 
                                for a prescription for a brand-name 
                                drug;
                                    (II) 190 percent of the Federal 
                                Upper Limit plus a minimum professional 
                                dispensing fee of $8.50 for a 
                                prescription for a generic drug; and
                                    (III) a professional service fee 
                                for any additional pharmacy services 
                                provided by the pharmacy, in an amount 
                                set by the Secretary of Health and 
                                Human Services.
                            (ii) Adjustment for inflation.--The 
                        professional dispensing fees under clause (i) 
                        shall be adjusted annually for inflation, based 
                        on the consumer price index.
            (3) Payments and charges between pbms and pharmacy benefit 
        plan sponsors.--
                    (A) Payments.--A PBM shall be reimbursed by a 
                pharmacy benefit plan sponsor for adjudicating and 
                processing claims in behalf of such sponsor at a rate 
                that is determined by such sponsor.
                    (B) Charges to pharmacy benefit plan sponsors for 
                drugs dispensed to plan enrollees.--The amount that a 
                PBM charges a pharmacy benefit plan sponsor for a drug 
                that is dispensed to enrollee of a pharmacy benefit 
                plan administered by such PBM may not be greater than 
                the amount that the PBM paid the pharmacy for such drug 
                (including any associated professional dispensing fee).
            (4) Treatment of drug manufacturer rebates.--
                    (A) No rebates to pbms.--A manufacturer of 
                prescription drugs--
                            (i) shall pay all rebates, as defined in 
                        section 5(6), directly to the pharmacy benefit 
                        plan sponsor; and
                            (ii) shall not pay such rebates to a PBM.
                    (B) Negotiation allowed.--A PBM may negotiate 
                rebate amounts with a manufacturer of prescription 
                drugs on behalf of a pharmacy benefit plan sponsor.
            (5) Provision of cost information to physicians.--In the 
        case that the premium, deductible, co-payments, co-insurance, 
        or other insurance-related charge under a pharmacy benefit plan 
        is underwritten, in whole or in part, by a Federal, State, or 
        local government, the pharmacy benefit plan sponsor shall 
        provide a list of the wholesale acquisition costs of the top 
        500 most frequently prescribed drugs to physicians who are 
        licenced to prescribe drugs and who provide treatment to 
        enrollees in such a plan.
            (6) Treatment of pharmacists as professional health care 
        providers.--Section 1861(s)(2) of the Social Security Act (42 
        U.S.C. 1395x(s)(2)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (DD);
                    (B) by adding ``and'' at the end of subparagraph 
                (EE); and
                    (C) by inserting after subparagraph (EE), the 
                following new subparagraph:
                    ``(FF) pharmacist services;''.

SEC. 4. PHARMACEUTICAL ACCESS PROGRAM.

    (a) Establishment.--Not later than January 1, 2011, the Secretary 
of Health and Human Services shall establish a pharmaceutical access 
program to provide affordable access to prescription drugs to 
individuals who receive drug benefits under Federal programs (except 
for the Medicaid program under title XIX of the Social Security Act).
    (b) Eligibility.--Any individual in a State shall be eligible to 
enroll in the program under subsection (a).
    (c) Fees.--
            (1) In general.--A pharmacy that dispenses prescription 
        drugs in the United States shall remit to the Secretary of 
        Health and Human Services--
                    (A) $0.50 for each prescription dispensed by such 
                pharmacy for a brand name drug; and
                    (B) $1.00 for each prescription dispensed by such 
                pharmacy for a generic drug.
            (2) Treatment for inflation.--The fees under paragraph (1) 
        shall be adjusted annually for inflation, based on the consumer 
        price index.
            (3) Treatment of medicaid programs.--The rule under 
        paragraph (1) shall not apply to drugs dispensed under a State 
        Medicaid program under title XIX of the Social Security Act.
            (4) Increase in professional dispensing fee for private 
        plans.--The professional dispensing fee paid to pharmacies by a 
        pharmacy benefit plan that is not funded by any Federal funds 
        shall be increased by such plan sponsor--
                    (A) by $0.50 for each brand name prescription; and
                    (B) by $1.00 for each generic prescription.
    (d) Use of Funds.--Funds generated under subsection (c) shall be 
used solely to provide affordable access to prescription drugs to low-
income individuals who have enrolled in the program under subsection 
(a).

SEC. 5. DEFINITIONS.

    For purposes of this Act: 
            (1) Brand name drugs.--The term ``brand name drug'' means a 
        prescription drug that is under patent by the drug's original 
        manufacturer and is protected from competition by other 
        manufacturers of prescription drugs.
            (2) Generic drug.--The term ``generic drug'' means a 
        prescription drug that has lost patient protection provided to 
        a single manufacturer or multiple manufacturers and is widely 
        available from multiple manufacturers.
            (3) Pharmacy benefit plan.--The term ``pharmacy benefit 
        plan'' means an insurance plan or insurance coverage that 
        provides benefits for prescription drugs, including a group 
        health plan (as such term is defined in section 733(a) of the 
        Patient Health and Real Medication Access Cost Savings Act of 
        2009 (29 U.S.C. 1191b(a))) that provides prescription drug 
        benefits.
            (4) Professional dispensing fee.--The term ``professional 
        dispensing fee'' means the fee paid for the dispensing of a 
        drug by the pharmacist and excludes any reimbursement for the 
        cost of the drug.
            (5) Professional service fee.--The term ``professional 
        service fee'' means a fee paid to a pharmacy for professional 
        services preformed by a pharmacist, excluding dispensing drugs 
        and any reimbursement for the cost of the drug. Such term may 
        include medication reviews, injections, and cholesterol checks.
            (6) Rebate.--The term ``rebate'' means any item of value, 
        including monetary value, that is distributed by the 
        manufacturer conditional upon the receipt of a payment for 
        drugs produced by such manufacturer.

Summary: Patient Health and Real Medication Access Cost Savings Act of 2009 or the PHARMACY Bill - Declares that a consumer shall have the right to choose to purchase prescription drugs from any domestic pharmacy that meets all applicable federal and state license and permit requirements.

Directs the Secretary of Health and Human Services (HHS) to issue regulations that: (1) prohibit a pharmacy benefit manager (PBM) from providing incentives to, encouraging, or requiring pharmacy benefit plan enrollees to use certain pharmacies or from excluding an eligible pharmacy from a plan's pharmacy network; (2) require a PBM to ensure that pharmacy benefit plan enrollees pay a specified copayment for brand name drugs; (3) require a PBM to reimburse a pharmacy in the network of a pharmacy benefit plan that is federally funded, at specified rates, for brand-name drugs, generic drugs, and additional professional services; (4) require a PBM to be reimbursed by a pharmacy benefit plan sponsor for adjudicating and processing claims; (5) limit the amount that a PBM charges a pharmacy benefit plan sponsor for a drug that is dispensed to enrollees to the amount the PBM paid the pharmacy for such drug; (6) require a manufacturer of prescription drugs to pay all rebates directly to the pharmacy benefit plan sponsor and not to a PBM; and (7) require a pharmacy benefit plan sponsor to provide a list of the wholesale acquisition costs of the top 500 most frequently prescribed drugs to physicians in a plan any insurance-related charge of which is underwritten by a federal, state, or local government.

Amends title XVIII (Medicare) of the Social Security Act to include pharmacist services as "medical and other health services" under Medicare.

Directs the Secretary, by January 1, 2011, to establish a pharmaceutical access program to provide affordable prescription drugs to individuals who receive drug benefits under federal programs (except Medicaid). Requires: (1) a pharmacy that dispenses prescription drugs in the United States to remit to the Secretary 50 cents for each brand name prescription and $1.00 for generic drug prescription dispensed; and (2) the sponsor of a pharmacy benefit plan that is not federally funded to increase the professional dispensing fee paid to pharmacies by the same amounts. Requires the use of funds generated from such fees to provide affordable access to prescription drugs to low-income individuals who have enrolled in the program.