Title: Phair Pricing Act of 2018
Policy area: Health

Summary:
Phair Pricing Act of 2018
This bill requires that negotiated prices for covered drugs under the Medicare prescription drug benefit be disclosed at the point-of-sale.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5958 Introduced in House (IH)]

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115th CONGRESS
  2d Session
                                H. R. 5958

  To amend title XVIII of the Social Security Act to require pharmacy-
   negotiated price concessions and pharmacy incentive payments and 
 adjustments to be included in negotiated prices at the point-of-sale 
     under part D of the Medicare program, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 24, 2018

Mr. Collins of Georgia (for himself, Mr. Carter of Georgia, Mr. Duncan 
of Tennessee, and Mr. Gonzalez of Texas) introduced the following bill; 
  which was referred to the Committee on Energy and Commerce, and in 
    addition to the Committee on Ways and Means, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
  To amend title XVIII of the Social Security Act to require pharmacy-
   negotiated price concessions and pharmacy incentive payments and 
 adjustments to be included in negotiated prices at the point-of-sale 
     under part D of the Medicare program, 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 ``Phair Pricing Act of 2018''.

SEC. 2. REQUIRING PHARMACY-NEGOTIATED PRICE CONCESSIONS AND PHARMACY 
              INCENTIVE PAYMENTS AND ADJUSTMENTS 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 clauses:
                            ``(ii) Prices negotiated with pharmacy at 
                        point-of-sale.--
                                    ``(I) In general.--Subject to 
                                subclause (III), for plan years 
                                beginning on or after January 1, 2019, 
                                negotiated prices for covered part D 
                                drugs described in clause (i) provided 
                                under a prescription drug plan, 
                                including all pharmacy price 
                                concessions and all incentive payments 
                                and adjustments negotiated with the 
                                pharmacy dispensing such drug, shall be 
                                provided at the point-of-sale of the 
                                covered part D drug. If the negotiated 
                                price of such drug, including all 
                                pharmacy price concessions and all 
                                incentive payments and adjustments 
                                negotiated with such pharmacy, is not 
                                possible to calculate at the point-of-
                                sale, the PDP sponsor of such plan 
                                shall use an estimated negotiated 
                                price, including all estimated pharmacy 
                                negotiated price concessions and 
                                incentive payments and adjustments and 
                                taking into account the negotiated 
                                price of such drug in the prior year 
                                (if available).
                                    ``(II) Application of incentive 
                                payments and adjustments.--For plan 
                                years beginning on or after January 1, 
                                2019, in the case that a PDP sponsor 
                                uses incentive payments and adjustments 
                                with respect to payment to a pharmacy 
                                for a covered part D drug, such 
                                payments and adjustments shall be 
                                determined through the use of a quality 
                                measure approved by the Secretary and 
                                established by the working group 
                                established under clause (iii).
                                    ``(III) No increase in cost 
                                sharing.--Subclause (I) shall not apply 
                                in the case where application of such 
                                subclause would increase the amount 
                                owed by an individual in cost sharing 
                                above the amount such individual would 
                                have owed in cost sharing without 
                                application of such subclause.
                                    ``(IV) Discrepancies between 
                                negotiated prices and actual 
                                reimbursement.--In the case that the 
                                Secretary determines that the 
                                negotiated price of a PDP sponsor 
                                applied at the point-of-sale with 
                                respect to a covered part D drug for a 
                                year dispensed by a pharmacy was not 
                                equal to the total reimbursement made 
                                to such pharmacy for such drug for such 
                                year (taking into account any incentive 
                                payments and adjustments and pharmacy 
                                price concessions, regardless of when 
                                such payments and adjustments or price 
                                concessions were applied), such sponsor 
                                shall, not later than 90 days after 
                                receiving notice of such determination, 
                                furnish to the pharmacy that dispensed 
                                such drug and to the Secretary a 
                                written explanation of why such 
                                negotiated price was not equal to such 
                                reimbursement.
                                    ``(V) Definitions.--In this clause:
                                            ``(aa) Incentive payments 
                                        and adjustments.--The term 
                                        `incentive payments and 
                                        adjustments' means, with 
                                        respect to payment to a 
                                        pharmacy by a PDP sponsor for a 
                                        covered part D drug, any 
                                        prospective or retrospective 
                                        price concessions, rebates, 
                                        discounts, fees, reconciliation 
                                        adjustments, bonuses, 
                                        performance payments, 
                                        incentives, and any other 
                                        adjustment to such payment 
                                        determined through the use of a 
                                        quality measure, and any other 
                                        adjustment made with respect to 
                                        such payment, regardless of 
                                        when such payments and 
                                        adjustments are applied. Such 
                                        term does not include any 
                                        manufacturer rebates or 
                                        concessions made with respect 
                                        to such drug.
                                            ``(bb) PDP sponsor.--The 
                                        term `PDP sponsor' includes an 
                                        MA organization offering an MA-
                                        PD plan under part C and an 
                                        entity that contracts with such 
                                        sponsor or organization, such 
                                        as a pharmacy benefit manager.
                                            ``(cc) Quality measure.--
                                        The term `quality measure' 
                                        means performance criteria 
                                        established by a PDP sponsor 
                                        (including an entity that 
                                        contracts with such sponsor, 
                                        such as a pharmacy benefit 
                                        manager) to determine the 
                                        amount or applicability of 
                                        incentive payments and 
                                        adjustments.
                            ``(iii) Quality measure working group.--
                                    ``(I) In general.--Not later than 
                                September 1, 2018, the Secretary shall 
                                convene a quality measures working 
                                group (in this clause referred to as 
                                the `working group') for purposes of 
                                establishing quality measures (as 
                                defined in clause (ii)(IV)) that may be 
                                used by a PDP sponsor (as defined in 
                                clause (ii)) under this part.
                                    ``(II) Composition.--The working 
                                group shall consist of representatives 
                                from each the following:
                                            ``(aa) PDP sponsors.
                                            ``(bb) Pharmacies 
                                        representing all pharmacy 
                                        practice types.
                                            ``(cc) Pharmacy benefit 
                                        managers.
                                            ``(dd) Patient advocacy 
                                        organizations.
                                            ``(ee) Such other entities 
                                        as the Secretary determines 
                                        appropriate.
                                    ``(III) Duties.--The working group 
                                shall provide for the establishment of 
                                quality measures that may be used by a 
                                PDP sponsor (as defined in clause (ii)) 
                                with respect to incentive payments and 
                                adjustments (as defined in clause 
                                (ii)(IV)) for a pharmacy under this 
                                part. Such measures established by such 
                                group shall include only such measures 
                                that--
                                            ``(aa) are reasonable and 
                                        relevant with respect to the 
                                        practice type of the applicable 
                                        pharmacy; and
                                            ``(bb) evaluate criteria 
                                        over which the pharmacy has 
                                        meaningful control and ability 
                                        to influence, consistent with 
                                        the pharmacy's practice 
                                        type.''.

SEC. 3. PHARMACY BENEFIT MANAGER PROVISION OF INFORMATION.

    (a) In General.--Section 1150A(b)(2) of the Social Security Act (42 
U.S.C. 1320b-23(b)(2)) is amended by striking ``excluding'' and 
inserting ``including''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to contract years beginning on or after January 1, 
2019.
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