I 118th CONGRESS 2d Session H. R. 7716 IN THE HOUSE OF REPRESENTATIVES March 19, 2024 Mr. Gallego 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 provide for enforcement of standards for reasonable and relevant contract terms and conditions and essential retail pharmacy protections under the Medicare program.

1. Providing for enforcement of standards for reasonable and relevant contract terms and conditions and essential retail pharmacy protections under the Medicare program (a) In general Section 1860D–4(b)(1) of the Social Security Act ( 42 U.S.C. 1395w–104(b)(1) ) is amended by adding at the end the following new subparagraph: (F) Enforcement of standards for reasonable and relevant contract terms and conditions and essential retail pharmacy protections (i) Allegation submission process (I) In general Not later than January 1, 2028, the Secretary shall establish a process through which a pharmacy may submit an allegation of a violation by a PDP sponsor offering a prescription drug plan of— (aa) the standards for reasonable and relevant contract terms and conditions under subparagraph (A)(ii); or (bb) the requirements for total reimbursement for essential retail pharmacies that are independent community pharmacies under subparagraph (C)(v)(II). (II) Frequency of submission (aa) Violations of reasonable and relevant contract terms and conditions (AA) In general Except as provided in subitem (BB), the allegation submission process under this clause shall allow pharmacies to submit any allegations of violations described in item (aa) of subclause (I) not more frequently than once per plan year per contract between a pharmacy and a PDP sponsor. (BB) Allegations relating to contract changes In the case where a contract is amended or otherwise updated following the submission of allegations by a pharmacy with respect to such contract and plan year, the allegation submission process under this clause shall allow such pharmacy to submit an additional allegation related to those changes with respect to such contract and plan year. (CC) Submissions Submissions of any allegations under this item shall be separate from any submissions under item (bb) and may include multiple allegations of such violations. (bb) Violations of essential retail pharmacy protections (AA) In general The allegation submission process under this clause shall allow essential retail pharmacies that are independent community pharmacies to submit any allegations of violations described in item (bb) of subclause (I) once per calendar quarter. (BB) Submissions Submissions of any allegations under this item shall be separate from any submissions under item (aa) and may include multiple allegations of such violations. (III) Access to relevant documents and materials A PDP sponsor subject to an allegation under this clause— (aa) shall provide documents or materials, as specified by the Secretary, including contract offers made by such sponsor to such pharmacy or correspondence related to such offers, to the Secretary at a time and in a form and manner specified by the Secretary; and (bb) shall not prohibit or otherwise limit the ability of a pharmacy to submit such documents or materials to the Secretary for the purpose of submitting an allegation or providing evidence for such an allegation under this clause. (IV) Standardized template The Secretary shall establish separate standardized templates for pharmacies to use for the submission of allegations described in items (aa) and (bb) of subclause (I). Each such template shall require that the submission include a certification by the pharmacy that the information included is accurate, complete, and true to the best of the knowledge, information, and belief of such pharmacy. (V) Preventing frivolous allegations In the case where the Secretary determines that a pharmacy has submitted frivolous allegations under this clause on a routine basis, the Secretary may temporarily prohibit such pharmacy from using the allegation submission process under this clause, as determined appropriate by the Secretary. (VI) Exemption from freedom of information act Allegations submitted under this clause shall be exempt from disclosure under section 552 of title 5, United States Code. (ii) Investigation The Secretary shall investigate, as determined appropriate by the Secretary, allegations submitted pursuant to clause (i). (iii) Enforcement (I) Reasonable and relevant contract terms and conditions In the case where the Secretary determines that a PDP sponsor offering a prescription drug plan has violated the standards for reasonable and relevant contract terms and conditions under subparagraph (A)(ii), the Secretary shall use existing authorities under sections 1857(g) and 1860D–12(b)(3)(E) to impose civil monetary penalties or take other enforcement actions. (II) Essential retail pharmacy protections In the case where the Secretary determines that a PDP sponsor offering a prescription drug plan has violated the requirements for total reimbursement for essential retail pharmacies that are independent community pharmacies under subparagraph (C)(v)(II), the Secretary shall— (aa) if the amount of total reimbursement paid by the sponsor to an essential retail pharmacy that is an independent community pharmacy for a covered part D drug was less than the amount of total reimbursement required to be paid to the pharmacy under subparagraph (C)(v)(II) for such drug, require the PDP sponsor to pay to the pharmacy an amount equal to the difference between such amounts; and (bb) use existing authorities under section 1857(g) and 1860D–12(b)(3)(E) to impose civil monetary penalties or take other enforcement actions. (III) Application of civil monetary penalties The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil monetary penalty under this clause in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). (iv) Definitions In this subparagraph, the terms essential retail pharmacy , independent community pharmacy , and total reimbursement have the meaning given those terms in subparagraph (C)(v). . (b) Conforming amendment Section 1857(g)(1) of the Social Security Act ( 42 U.S.C. 1395w–27(g)(1) ) is amended— (1) in subparagraph (J), by striking or after the semicolon; (2) by redesignating subparagraph (K) as subparagraph (L); (3) by inserting after subparagraph (J), the following new subparagraph: (K) fails to comply with— (i) the standards for reasonable and relevant contract terms and conditions under subparagraph (A)(ii) of section 1860D–4(b)(1); or (ii) the requirements for total reimbursement for essential retail pharmacies that are independent community pharmacies under subparagraph (C)(v)(II) of such section; or ; (4) in subparagraph (L), as redesignated by subparagraph (B), by striking through (J) and inserting through (K) ; and (5) in the flush matter following subparagraph (L), as so redesignated, by striking subparagraphs (A) through (K) and inserting subparagraphs (A) through (L) .