Title: Prescription Drug Price Transparency Act
Policy area: Health

Summary:
Prescription Drug Price Transparency Act
This bill establishes additional requirements for prescription drug plan sponsors (PDPs) under Medicare and Medicare Advantage, as well as health insurance carriers under the Federal Employees Health Benefits Program, relating to the methodology of payments to pharmacies and the use of pharmacy benefits managers (PBMs).
Specifically, such PDPs and carriers must disclose specified information to pharmacies regarding applicable standards for reimbursement that are based on drug costs, including the sources used to update such standards. Additionally, such PDPs and carriers may not contract with PBMs that require, or that provide an incentive for, plan enrollees to use pharmacies that have a shared ownership interest with the PBM.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1035 Introduced in House (IH)]

<DOC>






116th CONGRESS
  1st Session
                                H. R. 1035

To amend title XVIII of the Social Security Act to provide for pharmacy 
benefits manager standards under the Medicare prescription drug program 
   and Medicare Advantage program to further transparency of payment 
          methodologies to pharmacies, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 7, 2019

Mr. Collins of Georgia (for himself, Mr. Loebsack, Mr. David P. Roe of 
Tennessee, Mr. Westerman, Miss Rice of New York, Mr. King of Iowa, Ms. 
 Clarke of New York, Mr. Austin Scott of Georgia, Mr. Hice of Georgia, 
Mr. Vela, Mr. Raskin, Mrs. Rodgers of Washington, Mr. Welch, Mr. Carter 
 of Georgia, Mr. Crawford, Mr. Peterson, and Mr. Byrne) 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 
Oversight and Reform, 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 provide for pharmacy 
benefits manager standards under the Medicare prescription drug program 
   and Medicare Advantage program to further transparency of payment 
          methodologies to pharmacies, 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 ``Prescription Drug Price Transparency 
Act''.

SEC. 2. PHARMACY BENEFITS MANAGER STANDARDS UNDER THE MEDICARE PROGRAM 
              FOR PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    (a) In General.--Section 1860D-12(b) of the Social Security Act (42 
U.S.C. 1395w-112(b)) is amended by adding at the end the following new 
paragraph:
            ``(8) Pharmacy benefits manager transparency 
        requirements.--Each contract entered into with a PDP sponsor 
        under this part with respect to a prescription drug plan 
        offered by such sponsor or with an MA organization offering an 
        MA-PD plan under part C shall provide that the sponsor or 
        organization, respectively, may not enter into a contract with 
        any pharmacy benefits manager (referred to in this paragraph as 
        a `PBM') to manage the prescription drug coverage provided 
        under such plan, or to control the costs of the prescription 
        drug coverage under such plan, if the PBM--
                    ``(A) requires that a plan enrollee use a retail 
                pharmacy, mail order pharmacy, specialty pharmacy, or 
                other pharmacy entity providing pharmacy services in 
                which the PBM has an ownership interest or that has an 
                ownership interest in the PBM; or
                    ``(B) provides an incentive (including a reduced 
                copayment or coinsurance) to a plan enrollee to 
                encourage the enrollee to use a retail pharmacy, mail 
                order pharmacy, specialty pharmacy, or other pharmacy 
                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.''.
    (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) with respect to the plan shall provide that the 
                sponsor (or organization) shall--
                            ``(i) update such standard not less 
                        frequently 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 making 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 entities 
                        to appeal, investigate, and resolve disputes 
                        regarding individual drug prices that are less 
                        than the pharmacy acquisition price for such 
                        drug, which must be adjudicated within 7 days 
                        of the pharmacy filing 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 complete 
                        spreadsheet format.
                    ``(B) Prescription drug pricing standard defined.--
                For purposes of subparagraph (A), a standard for 
                reimbursement of a pharmacy is any methodology or 
                formula 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 pricing references and amounts that are 
                based upon average wholesale price, wholesale average 
                cost, average manufacturer price, average sales price, 
                maximum allowable 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.

SEC. 3. PRESCRIPTION DRUG TRANSPARENCY IN THE FEDERAL EMPLOYEES HEALTH 
              BENEFITS PROGRAM.

    (a) In General.--Section 8902 of title 5, United States Code, is 
amended by adding at the end the following new subsections:
    ``(p) A contract may not be made or a plan approved under this 
chapter under which a carrier has an agreement with a pharmacy benefits 
manager (in this subsection 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 pharmacy 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 encourage the enrollee to 
        use a retail pharmacy, mail order pharmacy, specialty pharmacy, 
        or other pharmacy 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.
    ``(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 prescription 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 update 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 immediately without requirement of 
        request;
            ``(C) if the source for such a standard for reimbursement 
        is not publicly available, disclose to the applicable 
        pharmacies and 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;
            ``(D) establish a process for applicable pharmacies and 
        respective contracting entities to appeal, investigate, and 
        resolve disputes regarding individual drug prices that are less 
        than the pharmacy acquisition price for such drug, which must 
        be adjudicated within 7 days of the pharmacy filing its appeal; 
        and
            ``(E) provide to applicable pharmacies and respective 
        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 formula 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 pricing 
references and amounts that are based upon average wholesale price, 
wholesale average cost, average manufacturer price, average sales 
price, maximum allowable cost, or other costs, whether publicly 
available or not.''.
    (b) Application.--The amendment made by subsection (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.
                                 <all>