Pharmacy DIR Reform To Reduce Senior Drug Costs Act
Bill: S.1909 | Sponsor: Sen. Tester, Jon (D-MT)
Policy area: Health

Summary:
Pharmacy DIR Reform To Reduce Senior Drug Costs Act
This bill establishes certain requirements for prescription drug plans and the prices of covered drugs under the Medicare prescription drug benefit.
Specifically, the bill requires price concessions, payments, and fees that are negotiated with a pharmacy to be included in a drug's negotiated price, excluding incentive payments, and for this price to be provided at the point of sale. Additionally, prescription drug plans must report price concessions or incentive payments that are made after payment for covered drugs at the point of sale, including by contracted intermediaries, to the pharmacy at least annually.
The Centers for Medicare & Medicaid Services must establish standardized pharmacy performance measures with respect to incentive payments and price concessions; such measures must account for all pharmacy types, including specialty pharmacies, and focus on patient health outcomes and other targeted areas.

To amend title XVIII of the Social Security Act to reform requirements 
with respect to direct and indirect remuneration under Medicare part D, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Pharmacy DIR Reform To Reduce Senior 
Drug Costs Act''.

SEC. 2. REQUIRING PHARMACY-NEGOTIATED PRICE CONCESSIONS, PAYMENT, AND 
              FEES TO BE INCLUDED IN NEGOTIATED PRICES AT THE POINT-OF-
              SALE UNDER PART D OF THE MEDICARE PROGRAM.

    Section 1860D-2(d)(1)(B) of the Social Security Act (42 U.S.C. 
1395w-102(d)(1)(B)) is amended--
            (1) by striking ``prices.--For purposes'' and inserting 
        ``prices.--
                            ``(i) In general.--For purposes''; and
            (2) by adding at the end the following new clause:
                            ``(ii) Prices negotiated with pharmacy at 
                        point-of-sale.--For plan years beginning on or 
                        after January 1, 2022, a negotiated price for a 
                        covered part D drug described in clause (i) 
                        shall include price concessions, payments, and 
                        fees negotiated with such pharmacy as defined 
                        by the Secretary, but shall not include 
                        incentive payments based on pharmacy 
                        performance paid or to be paid to such 
                        pharmacy. Such negotiated price shall be 
                        provided at the point-of-sale of such drug.''.

SEC. 3. DISCLOSURE TO PHARMACY OF POST-POINT-OF-SALE PHARMACY PRICE 
              CONCESSIONS AND INCENTIVE PAYMENTS.

    Section 1860D-2(d)(2) of the Social Security Act (42 U.S.C. 1395w-
102(d)(2)) is amended--
            (1) by striking ``disclosure.--A PDP sponsor'' and 
        inserting ``disclosure.--
                    ``(A) To the secretary.--A PDP sponsor''; and
            (2) by adding at the end the following new subparagraph:
                    ``(B) To pharmacies.--
                            ``(i) In general.--For plan year 2022 and 
                        subsequent plan years, a PDP sponsor offering a 
                        prescription drug plan and an MA organization 
                        offering an MA-PD plan shall report any 
                        pharmacy price concession or incentive payment 
                        that occurs with respect to a pharmacy after 
                        payment for covered part D drugs at the point-
                        of-sale, including by an intermediary 
                        organization with which a PDP sponsor or MA 
                        organization has contracted, to the pharmacy.
                            ``(ii) Timing.--The reporting of price 
                        concessions and incentive payments to a 
                        pharmacy under clause (i) shall be made on a 
                        periodic basis (but in no case less frequently 
                        than annually).
                            ``(iii) Claim level.--The reporting of 
                        price concessions and incentive payments to a 
                        pharmacy under clause (i) shall be at the claim 
                        level or approximated at the claim level if the 
                        price concession or incentive payment was 
                        applied at a level other than at the claim 
                        level.''.

SEC. 4. ESTABLISHMENT OF PHARMACY PERFORMANCE MEASURES UNDER MEDICARE 
              PART D.

    Section 1860D-4(c) of the Social Security Act (42 U.S.C. 1395w-
104(c)) is amended--
            (1) by redesignating paragraph (6), as added by section 
        50354 of division E of the Bipartisan Budget Act of 2018 
        (Public Law 115-123), as paragraph (7); and
            (2) by adding at the end the following new paragraph:
            ``(8) Application of standardized pharmacy performance 
        measures.--
                    ``(A) In general.--A PDP sponsor and MA-PD plan 
                that makes incentive payments to a pharmacy or receives 
                price concessions paid by a pharmacy based on 
                performance measures shall, for the purposes of such 
                incentive payments and price concessions with respect 
                to covered part D drugs dispensed by such pharmacy, 
                only use measures--
                            ``(i) established or adopted by the 
                        Secretary under subparagraph (B), as listed 
                        under clause (ii) of such subparagraph; and
                            ``(ii) that are relevant to the performance 
                        of such pharmacy with respect to areas that the 
                        pharmacy can impact based on covered part D 
                        drugs dispensed and managed.
                    ``(B) Standardized pharmacy performance measures.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of law, the Secretary shall 
                        establish or adopt standardized pharmacy 
                        performance measures from one or more multi-
                        stakeholder, consensus organizations 
                        representing all pharmacy types (including 
                        specialty pharmacies) to be used by a PDP 
                        sponsor and MA-PD plan for the purposes of 
                        determining incentive payments and price 
                        concessions described in subparagraph (A). Such 
                        measures shall be evidence-based and focus on 
                        pharmacy performance on patient health outcomes 
                        and other areas, as determined by the 
                        Secretary, that the pharmacy can impact based 
                        on covered part D drugs dispensed and managed.
                            ``(ii) Maintenance of list.--The Secretary 
                        shall maintain a single list of measures 
                        established or adopted under this subparagraph 
                        and measures shall be evaluated and updated on 
                        an ongoing basis through stakeholder consensus 
                        organizations to ensure they are transparent, 
                        achievable, and clinically meaningful.
                            ``(iii) Application to star ratings.--The 
                        Secretary shall require the development of 
                        measures to apply in the star rating system 
                        under this part to assess the use of a standard 
                        set of pharmacy performance measures by PDP 
                        sponsors and MA-PD plans.
                    ``(C) Specialty pharmacy.--For purposes of 
                subparagraph (B)(i), the Secretary shall, not later 
                than December 31, 2022, define the term `specialty 
                pharmacy' in consultation with relevant stakeholders.
                    ``(D) Effective date.--The requirement under 
                subparagraph (A) shall take effect for plan years 
                beginning on January 1, 2022, or such earlier date 
                specified by the Secretary if the Secretary determines 
                there are sufficient measures established or adopted 
                under subparagraph (B) for the purposes of the 
                requirement under subparagraph (A).''.
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