Us Congress House Bill HB2450 Latest Draft

                            I 
119THCONGRESS 
1
STSESSION H. R. 2450 
To amend the Public Health Service Act, the Employee Retirement Income 
Security Act of 1974, and the Internal Revenue Code of 1984 to increase 
oversight of pharmacy benefit management services, and for other pur-
poses. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH27, 2025 
Ms. M
CDONALDRIVET(for herself, Mr. CARTERof Georgia, Mr. MENENDEZ, 
and Mr. J
AMES) introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees 
on Education and Workforce, and 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 con-
cerned 
A BILL 
To amend the Public Health Service Act, the Employee Re-
tirement Income Security Act of 1974, and the Internal 
Revenue Code of 1984 to increase oversight of pharmacy 
benefit management services, and for other purposes. 
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Prescription Drug 4
Transparency and Affordability Act’’. 5
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SEC. 2. OVERSIGHT OF PHARMACY BENEFIT MANAGEMENT 1
SERVICES. 2
(a) P
UBLICHEALTHSERVICEACT.—Title XXVII of 3
the Public Health Service Act (42 U.S.C. 300gg et seq.) 4
is amended— 5
(1) in part D (42 U.S.C. 300gg–111 et seq.), 6
by adding at the end the following new section: 7
‘‘SEC. 2799A–11. OVERSIGHT OF ENTITIES THAT PROVIDE 8
PHARMACY BENEFIT MANAGEMENT SERV-9
ICES. 10
‘‘(a) I
NGENERAL.—For plan years beginning on or 11
after the date that is 30 months after the date of enact-12
ment of this section (referred to in this subsection and 13
subsection (b) as the ‘effective date’), a group health plan 14
or a health insurance issuer offering group health insur-15
ance coverage, or an entity providing pharmacy benefit 16
management services on behalf of such a plan or issuer, 17
shall not enter into a contract, including an extension or 18
renewal of a contract, entered into on or after the effective 19
date, with an applicable entity unless such applicable enti-20
ty agrees to— 21
‘‘(1) not limit or delay the disclosure of infor-22
mation to the group health plan (including such a 23
plan offered through a health insurance issuer) in 24
such a manner that prevents an entity providing 25
pharmacy benefit management services on behalf of 26
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a group health plan or health insurance issuer offer-1
ing group health insurance coverage from making 2
the reports described in subsection (b); and 3
‘‘(2) provide the entity providing pharmacy ben-4
efit management services on behalf of a group health 5
plan or health insurance issuer relevant information 6
necessary to make the reports described in sub-7
section (b). 8
‘‘(b) R
EPORTS.— 9
‘‘(1) I
N GENERAL.—For plan years beginning 10
on or after the effective date, in the case of any con-11
tract between a group health plan or a health insur-12
ance issuer offering group health insurance coverage 13
offered in connection with such a plan and an entity 14
providing pharmacy benefit management services on 15
behalf of such plan or issuer, including an extension 16
or renewal of such a contract, entered into on or 17
after the effective date, the entity providing phar-18
macy benefit management services on behalf of such 19
a group health plan or health insurance issuer, not 20
less frequently than every 6 months (or, at the re-21
quest of a group health plan, not less frequently 22
than quarterly, and under the same conditions, 23
terms, and cost of the semiannual report under this 24
subsection), shall submit to the group health plan a 25
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report in accordance with this section. Each such re-1
port shall be made available to such group health 2
plan in plain language, in a machine-readable for-3
mat, and as the Secretary may determine, other for-4
mats. Each such report shall include the information 5
described in paragraph (2). 6
‘‘(2) I
NFORMATION DESCRIBED .—For purposes 7
of paragraph (1), the information described in this 8
paragraph is, with respect to drugs covered by a 9
group health plan or group health insurance cov-10
erage offered by a health insurance issuer in connec-11
tion with a group health plan during each reporting 12
period— 13
‘‘(A) in the case of a group health plan 14
that is offered by a specified large employer or 15
that is a specified large plan, and is not offered 16
as health insurance coverage, or in the case of 17
health insurance coverage for which the election 18
under paragraph (3) is made for the applicable 19
reporting period— 20
‘‘(i) a list of drugs for which a claim 21
was filed and, with respect to each such 22
drug on such list— 23
‘‘(I) the contracted compensation 24
paid by the group health plan or 25
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health insurance issuer for each cov-1
ered drug (identified by the National 2
Drug Code) to the entity providing 3
pharmacy benefit management serv-4
ices or other applicable entity on be-5
half of the group health plan or health 6
insurance issuer; 7
‘‘(II) the contracted compensa-8
tion paid to the pharmacy, by any en-9
tity providing pharmacy benefit man-10
agement services or other applicable 11
entity on behalf of the group health 12
plan or health insurance issuer, for 13
each covered drug (identified by the 14
National Drug Code); 15
‘‘(III) for each such claim, the 16
difference between the amount paid 17
under subclause (I) and the amount 18
paid under subclause (II); 19
‘‘(IV) the proprietary name, es-20
tablished name or proper name, and 21
National Drug Code; 22
‘‘(V) for each claim for the drug 23
(including original prescriptions and 24
refills) and for each dosage unit of the 25
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drug for which a claim was filed, the 1
type of dispensing channel used to 2
furnish the drug, including retail, mail 3
order, or specialty pharmacy; 4
‘‘(VI) with respect to each drug 5
dispensed, for each type of dispensing 6
channel (including retail, mail order, 7
or specialty pharmacy)— 8
‘‘(aa) whether such drug is a 9
brand name drug or a generic 10
drug, and— 11
‘‘(AA) in the case of a 12
brand name drug, the whole-13
sale acquisition cost, listed 14
as cost per days supply and 15
cost per dosage unit, on the 16
date such drug was dis-17
pensed; and 18
‘‘(BB) in the case of a 19
generic drug, the average 20
wholesale price, listed as 21
cost per days supply and 22
cost per dosage unit, on the 23
date such drug was dis-24
pensed; and 25
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‘‘(bb) the total number of— 1
‘‘(AA) prescription 2
claims (including original 3
prescriptions and refills); 4
‘‘(BB) participants and 5
beneficiaries for whom a 6
claim for such drug was 7
filed through the applicable 8
dispensing channel; 9
‘‘(CC) dosage units and 10
dosage units per fill of such 11
drug; and 12
‘‘(DD) days supply of 13
such drug per fill; 14
‘‘(VII) the net price per course of 15
treatment or single fill, such as a 30- 16
day supply or 90-day supply to the 17
plan or coverage after rebates, fees, 18
alternative discounts, or other remu-19
neration received from applicable enti-20
ties; 21
‘‘(VIII) the total amount of out- 22
of-pocket spending by participants 23
and beneficiaries on such drug, in-24
cluding spending through copayments, 25
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coinsurance, and deductibles, but not 1
including any amounts spent by par-2
ticipants and beneficiaries on drugs 3
not covered under the plan or cov-4
erage, or for which no claim is sub-5
mitted under the plan or coverage; 6
‘‘(IX) the total net spending on 7
the drug; 8
‘‘(X) the total amount received, 9
or expected to be received, by the plan 10
or issuer from any applicable entity in 11
rebates, fees, alternative discounts, or 12
other remuneration; 13
‘‘(XI) the total amount received, 14
or expected to be received, by the enti-15
ty providing pharmacy benefit man-16
agement services, from applicable en-17
tities, in rebates, fees, alternative dis-18
counts, or other remuneration from 19
such entities— 20
‘‘(aa) for claims incurred 21
during the reporting period; and 22
‘‘(bb) that is related to utili-23
zation of such drug or spending 24
on such drug; and 25
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‘‘(XII) to the extent feasible, in-1
formation on the total amount of re-2
muneration for such drug, including 3
copayment assistance dollars paid, co-4
payment cards applied, or other dis-5
counts provided by each drug manu-6
facturer (or entity administering co-7
payment assistance on behalf of such 8
drug manufacturer), to the partici-9
pants and beneficiaries enrolled in 10
such plan or coverage; 11
‘‘(ii) a list of each therapeutic class 12
(as defined by the Secretary) for which a 13
claim was filed under the group health 14
plan or health insurance coverage during 15
the reporting period, and, with respect to 16
each such therapeutic class— 17
‘‘(I) the total gross spending on 18
drugs in such class before rebates, 19
price concessions, alternative dis-20
counts, or other remuneration from 21
applicable entities; 22
‘‘(II) the net spending in such 23
class after such rebates, price conces-24
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sions, alternative discounts, or other 1
remuneration from applicable entities; 2
‘‘(III) the total amount received, 3
or expected to be received, by the enti-4
ty providing pharmacy benefit man-5
agement services, from applicable en-6
tities, in rebates, fees, alternative dis-7
counts, or other remuneration from 8
such entities— 9
‘‘(aa) for claims incurred 10
during the reporting period; and 11
‘‘(bb) that is related to utili-12
zation of drugs or drug spending; 13
‘‘(IV) the average net spending 14
per 30-day supply and per 90-day 15
supply by the plan or by the issuer 16
with respect to such coverage and its 17
participants and beneficiaries, among 18
all drugs within the therapeutic class 19
for which a claim was filed during the 20
reporting period; 21
‘‘(V) the number of participants 22
and beneficiaries who filled a prescrip-23
tion for a drug in such class, includ-24
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ing the National Drug Code for each 1
such drug; 2
‘‘(VI) if applicable, a description 3
of the formulary tiers and utilization 4
mechanisms (such as prior authoriza-5
tion or step therapy) employed for 6
drugs in that class; and 7
‘‘(VII) the total out-of-pocket 8
spending under the plan or coverage 9
by participants and beneficiaries, in-10
cluding spending through copayments, 11
coinsurance, and deductibles, but not 12
including any amounts spent by par-13
ticipants and beneficiaries on drugs 14
not covered under the plan or cov-15
erage or for which no claim is sub-16
mitted under the plan or coverage; 17
‘‘(iii) with respect to any drug for 18
which gross spending under the group 19
health plan or health insurance coverage 20
exceeded $10,000 during the reporting pe-21
riod or, in the case that gross spending 22
under the group health plan or coverage 23
exceeded $10,000 during the reporting pe-24
riod with respect to fewer than 50 drugs, 25
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with respect to the 50 prescription drugs 1
with the highest spending during the re-2
porting period— 3
‘‘(I) a list of all other drugs in 4
the same therapeutic class as such 5
drug; 6
‘‘(II) if applicable, the rationale 7
for the formulary placement of such 8
drug in that therapeutic category or 9
class, selected from a list of standard 10
rationales established by the Sec-11
retary, in consultation with stake-12
holders; and 13
‘‘(III) any change in formulary 14
placement compared to the prior plan 15
year; and 16
‘‘(iv) in the case that such plan or 17
issuer (or an entity providing pharmacy 18
benefit management services on behalf of 19
such plan or issuer) has an affiliated phar-20
macy or pharmacy under common owner-21
ship, including mandatory mail and spe-22
cialty home delivery programs, retail and 23
mail auto-refill programs, and cost sharing 24
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assistance incentives funded by an entity 1
providing pharmacy benefit services— 2
‘‘(I) an explanation of any ben-3
efit design parameters that encourage 4
or require participants and bene-5
ficiaries in the plan or coverage to fill 6
prescriptions at mail order, specialty, 7
or retail pharmacies; 8
‘‘(II) the percentage of total pre-9
scriptions dispensed by such phar-10
macies to participants or beneficiaries 11
in such plan or coverage; and 12
‘‘(III) a list of all drugs dis-13
pensed by such pharmacies to partici-14
pants or beneficiaries enrolled in such 15
plan or coverage, and, with respect to 16
each drug dispensed— 17
‘‘(aa) the amount charged, 18
per dosage unit, per 30-day sup-19
ply, or per 90-day supply (as ap-20
plicable) to the plan or issuer, 21
and to participants and bene-22
ficiaries; 23
‘‘(bb) the median amount 24
charged to such plan or issuer, 25
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and the interquartile range of the 1
costs, per dosage unit, per 30- 2
day supply, and per 90-day sup-3
ply, including amounts paid by 4
the participants and bene-5
ficiaries, when the same drug is 6
dispensed by other pharmacies 7
that are not affiliated with or 8
under common ownership with 9
the entity and that are included 10
in the pharmacy network of such 11
plan or coverage; 12
‘‘(cc) the lowest cost per 13
dosage unit, per 30-day supply 14
and per 90-day supply, for each 15
such drug, including amounts 16
charged to the plan or coverage 17
and to participants and bene-18
ficiaries, that is available from 19
any pharmacy included in the 20
network of such plan or coverage; 21
and 22
‘‘(dd) the net acquisition 23
cost per dosage unit, per 30-day 24
supply, and per 90-day supply, if 25
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such drug is subject to a max-1
imum price discount; and 2
‘‘(B) with respect to any group health 3
plan, including group health insurance coverage 4
offered in connection with such a plan, regard-5
less of whether the plan or coverage is offered 6
by a specified large employer or whether it is a 7
specified large plan— 8
‘‘(i) a summary document for the 9
group health plan that includes such infor-10
mation described in clauses (i) through (iv) 11
of subparagraph (A), as specified by the 12
Secretary through guidance, program in-13
struction, or otherwise (with no require-14
ment of notice and comment rulemaking), 15
that the Secretary determines useful to 16
group health plans for purposes of select-17
ing pharmacy benefit management serv-18
ices, such as an estimated net price to 19
group health plan and participant or bene-20
ficiary, a cost per claim, the fee structure 21
or reimbursement model, and estimated 22
cost per participant or beneficiary; 23
‘‘(ii) a summary document for plans 24
and issuers to provide to participants and 25
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beneficiaries, which shall be made available 1
to participants or beneficiaries upon re-2
quest to their group health plan (including 3
in the case of group health insurance cov-4
erage offered in connection with such a 5
plan), that— 6
‘‘(I) contains such information 7
described in clauses (iii), (iv), (v), and 8
(vi), as applicable, as specified by the 9
Secretary through guidance, program 10
instruction, or otherwise (with no re-11
quirement of notice and comment 12
rulemaking) that the Secretary deter-13
mines useful to participants or bene-14
ficiaries in better understanding the 15
plan or coverage or benefits under 16
such plan or coverage; 17
‘‘(II) contains only aggregate in-18
formation; and 19
‘‘(III) states that participants 20
and beneficiaries may request specific, 21
claims-level information required to be 22
furnished under subsection (c) from 23
the group health plan or health insur-24
ance issuer; and 25
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‘‘(iii) with respect to drugs covered by 1
such plan or coverage during such report-2
ing period— 3
‘‘(I) the total net spending by the 4
plan or coverage for all such drugs; 5
‘‘(II) the total amount received, 6
or expected to be received, by the plan 7
or issuer from any applicable entity in 8
rebates, fees, alternative discounts, or 9
other remuneration; and 10
‘‘(III) to the extent feasible, in-11
formation on the total amount of re-12
muneration for such drugs, including 13
copayment assistance dollars paid, co-14
payment cards applied, or other dis-15
counts provided by each drug manu-16
facturer (or entity administering co-17
payment assistance on behalf of such 18
drug manufacturer) to participants 19
and beneficiaries; 20
‘‘(iv) amounts paid directly or indi-21
rectly in rebates, fees, or any other type of 22
compensation (as defined in section 23
408(b)(2)(B)(ii)(dd)(AA) of the Employee 24
Retirement Income Security Act) to bro-25
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kerage firms, brokers, consultants, advi-1
sors, or any other individual or firm, for— 2
‘‘(I) the referral of the group 3
health plan’s or health insurance 4
issuer’s business to an entity pro-5
viding pharmacy benefit management 6
services, including the identity of the 7
recipient of such amounts; 8
‘‘(II) consideration of the entity 9
providing pharmacy benefit manage-10
ment services by the group health 11
plan or health insurance issuer; or 12
‘‘(III) the retention of the entity 13
by the group health plan or health in-14
surance issuer; 15
‘‘(v) an explanation of any benefit de-16
sign parameters that encourage or require 17
participants and beneficiaries in such plan 18
or coverage to fill prescriptions at mail 19
order, specialty, or retail pharmacies that 20
are affiliated with or under common own-21
ership with the entity providing pharmacy 22
benefit management services under such 23
plan or coverage, including mandatory mail 24
and specialty home delivery programs, re-25
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tail and mail auto-refill programs, and 1
cost-sharing assistance incentives directly 2
or indirectly funded by such entity; and 3
‘‘(vi) total gross spending on all drugs 4
under the plan or coverage during the re-5
porting period. 6
‘‘(3) O
PT-IN FOR GROUP HEALTH INSURANCE 7
COVERAGE OFFERED BY A SPECIFIED LARGE EM -8
PLOYER OR THAT IS A SPECIFIED LARGE PLAN .—In 9
the case of group health insurance coverage offered 10
in connection with a group health plan that is of-11
fered by a specified large employer or is a specified 12
large plan, such group health plan may, on an an-13
nual basis, for plan years beginning on or after the 14
date that is 30 months after the date of enactment 15
of this section, elect to require an entity providing 16
pharmacy benefit management services on behalf of 17
the health insurance issuer to submit to such group 18
health plan a report that includes all of the informa-19
tion described in paragraph (2)(A), in addition to 20
the information described in paragraph (2)(B). 21
‘‘(4) P
RIVACY REQUIREMENTS .— 22
‘‘(A) I
N GENERAL.—An entity providing 23
pharmacy benefit management services on be-24
half of a group health plan or a health insur-25
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ance issuer offering group health insurance cov-1
erage shall report information under paragraph 2
(1) in a manner consistent with the privacy reg-3
ulations promulgated under section 13402(a) of 4
the Health Information Technology for Eco-5
nomic and Clinical Health Act and consistent 6
with the privacy regulations promulgated under 7
the Health Insurance Portability and Account-8
ability Act of 1996 in part 160 and subparts A 9
and E of part 164 of title 45, Code of Federal 10
Regulations (or successor regulations) (referred 11
to in this paragraph as the ‘HIPAA privacy 12
regulations’) and shall restrict the use and dis-13
closure of such information according to such 14
privacy regulations and such HIPAA privacy 15
regulations. 16
‘‘(B) A
DDITIONAL REQUIREMENTS .— 17
‘‘(i) I
N GENERAL.—An entity pro-18
viding pharmacy benefit management serv-19
ices on behalf of a group health plan or 20
health insurance issuer offering group 21
health insurance coverage that submits a 22
report under paragraph (1) shall ensure 23
that such report contains only summary 24
health information, as defined in section 25
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164.504(a) of title 45, Code of Federal 1
Regulations (or successor regulations). 2
‘‘(ii) R
ESTRICTIONS.—In carrying out 3
this subsection, a group health plan shall 4
comply with section 164.504(f) of title 45, 5
Code of Federal Regulations (or a suc-6
cessor regulation), and a plan sponsor shall 7
act in accordance with the terms of the 8
agreement described in such section. 9
‘‘(C) R
ULE OF CONSTRUCTION .— 10
‘‘(i) Nothing in this section shall be 11
construed to modify the requirements for 12
the creation, receipt, maintenance, or 13
transmission of protected health informa-14
tion under the HIPAA privacy regulations. 15
‘‘(ii) Nothing in this section shall be 16
construed to affect the application of any 17
Federal or State privacy or civil rights law, 18
including the HIPAA privacy regulations, 19
the Genetic Information Nondiscrimination 20
Act of 2008 (Public Law 110–233) (in-21
cluding the amendments made by such 22
Act), the Americans with Disabilities Act 23
of 1990 (42 U.S.C. 12101 et sec), section 24
504 of the Rehabilitation Act of 1973 (29 25
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U.S.C. 794), section 1557 of the Patient 1
Protection and Affordable Care Act (42 2
U.S.C. 18116), title VI of the Civil Rights 3
Act of 1964 (42 U.S.C. 2000d), and title 4
VII of the Civil Rights Act of 1964 (42 5
U.S.C. 2000e). 6
‘‘(D) W
RITTEN NOTICE.—Each plan year, 7
group health plans, including with respect to 8
group health insurance coverage offered in con-9
nection with a group health plan, shall provide 10
to each participant or beneficiary written notice 11
informing the participant or beneficiary of the 12
requirement for entities providing pharmacy 13
benefit management services on behalf of the 14
group health plan or health insurance issuer of-15
fering group health insurance coverage to sub-16
mit reports to group health plans under para-17
graph (1), as applicable, which may include in-18
corporating such notification in plan documents 19
provided to the participant or beneficiary, or 20
providing individual notification. 21
‘‘(E) L
IMITATION TO BUSINESS ASSOCI -22
ATES.—A group health plan receiving a report 23
under paragraph (1) may disclose such informa-24
tion only to the entity from which the report 25
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was received or to that entity’s business associ-1
ates as defined in section 160.103 of title 45, 2
Code of Federal Regulations (or successor regu-3
lations) or as permitted by the HIPAA privacy 4
regulations. 5
‘‘(F) C
LARIFICATION REGARDING PUBLIC 6
DISCLOSURE OF INFORMATION .—Nothing in 7
this section shall prevent an entity providing 8
pharmacy benefit management services on be-9
half of a group health plan or health insurance 10
issuer offering group health insurance coverage, 11
from placing reasonable restrictions on the pub-12
lic disclosure of the information contained in a 13
report described in paragraph (1), except that 14
such plan, issuer, or entity may not— 15
‘‘(i) restrict disclosure of such report 16
to the Department of Health and Human 17
Services, the Department of Labor, or the 18
Department of the Treasury; or 19
‘‘(ii) prevent disclosure for the pur-20
poses of subsection (c), or any other public 21
disclosure requirement under this section. 22
‘‘(G) L
IMITED FORM OF REPORT .—The 23
Secretary shall define through rulemaking a 24
limited form of the report under paragraph (1) 25
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required with respect to any group health plan 1
established by a plan sponsor that is, or is af-2
filiated with, a drug manufacturer, drug whole-3
saler, or other direct participant in the drug 4
supply chain, in order to prevent anti-competi-5
tive behavior. 6
‘‘(5) S
TANDARD FORMAT AND REGULATIONS .— 7
‘‘(A) I
N GENERAL.—Not later than 18 8
months after the date of enactment of this sec-9
tion, the Secretary shall specify through rule-10
making a standard format for entities providing 11
pharmacy benefit management services on be-12
half of group health plans and health insurance 13
issuers offering group health insurance cov-14
erage, to submit reports required under para-15
graph (1). 16
‘‘(B) A
DDITIONAL REGULATIONS .—Not 17
later than 18 months after the date of enact-18
ment of this section, the Secretary shall, 19
through rulemaking, promulgate any other final 20
regulations necessary to implement the require-21
ments of this section. In promulgating such 22
regulations, the Secretary shall, to the extent 23
practicable, align the reporting requirements 24
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under this section with the reporting require-1
ments under section 2799A–10. 2
‘‘(c) R
EQUIREMENTTOPROVIDEINFORMATION TO 3
P
ARTICIPANTS ORBENEFICIARIES.—A group health plan, 4
including with respect to group health insurance coverage 5
offered in connection with a group health plan, upon re-6
quest of a participant or beneficiary, shall provide to such 7
participant or beneficiary— 8
‘‘(1) the summary document described in sub-9
section (b)(2)(B)(ii); and 10
‘‘(2) the information described in subsection 11
(b)(2)(A)(i)(III) with respect to a claim made by or 12
on behalf of such participant or beneficiary. 13
‘‘(d) E
NFORCEMENT.— 14
‘‘(1) I
N GENERAL.—The Secretary shall enforce 15
this section. The enforcement authority under this 16
subsection shall apply only with respect to group 17
health plans (including group health insurance cov-18
erage offered in connection with such a plan) to 19
which the requirements of subparts I and II of part 20
A and part D apply in accordance with section 2722, 21
and with respect to entities providing pharmacy ben-22
efit management services on behalf of such plans 23
and applicable entities providing services on behalf 24
of such plans. 25
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‘‘(2) FAILURE TO PROVIDE INFORMATION .—A 1
group health plan, a health insurance issuer offering 2
group health insurance coverage, an entity providing 3
pharmacy benefit management services on behalf of 4
such a plan or issuer, or an applicable entity pro-5
viding services on behalf of such a plan or issuer 6
that violates subsection (a); an entity providing 7
pharmacy benefit management services on behalf of 8
such a plan or issuer that fails to provide the infor-9
mation required under subsection (b); or a group 10
health plan that fails to provide the information re-11
quired under subsection (c), shall be subject to a 12
civil monetary penalty in the amount of $10,000 for 13
each day during which such violation continues or 14
such information is not disclosed or reported. 15
‘‘(3) F
ALSE INFORMATION.—A health insurance 16
issuer, an entity providing pharmacy benefit man-17
agement services, or a third party administrator pro-18
viding services on behalf of such issuer offered by a 19
health insurance issuer that knowingly provides false 20
information under this section shall be subject to a 21
civil monetary penalty in an amount not to exceed 22
$100,000 for each item of false information. Such 23
civil monetary penalty shall be in addition to other 24
penalties as may be prescribed by law. 25
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‘‘(4) PROCEDURE.—The provisions of section 1
1128A of the Social Security Act, other than sub-2
sections (a) and (b) and the first sentence of sub-3
section (c)(1) of such section shall apply to civil 4
monetary penalties under this subsection in the 5
same manner as such provisions apply to a penalty 6
or proceeding under such section. 7
‘‘(5) W
AIVERS.—The Secretary may waive pen-8
alties under paragraph (2), or extend the period of 9
time for compliance with a requirement of this sec-10
tion, for an entity in violation of this section that 11
has made a good-faith effort to comply with the re-12
quirements in this section. 13
‘‘(e) R
ULE OFCONSTRUCTION.—Nothing in this sec-14
tion shall be construed to permit a health insurance issuer, 15
group health plan, entity providing pharmacy benefit man-16
agement services on behalf of a group health plan or 17
health insurance issuer, or other entity to restrict disclo-18
sure to, or otherwise limit the access of, the Secretary to 19
a report described in subsection (b)(1) or information re-20
lated to compliance with subsections (a), (b), (c), or (d) 21
by such issuer, plan, or entity. 22
‘‘(f) D
EFINITIONS.—In this section: 23
‘‘(1) A
PPLICABLE ENTITY.—The term ‘applica-24
ble entity’ means— 25
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•HR 2450 IH
‘‘(A) an applicable group purchasing orga-1
nization, drug manufacturer, distributor, whole-2
saler, rebate aggregator (or other purchasing 3
entity designed to aggregate rebates), or associ-4
ated third party; 5
‘‘(B) any subsidiary, parent, affiliate, or 6
subcontractor of a group health plan, health in-7
surance issuer, entity that provides pharmacy 8
benefit management services on behalf of such 9
a plan or issuer, or any entity described in sub-10
paragraph (A); or 11
‘‘(C) such other entity as the Secretary 12
may specify through rulemaking. 13
‘‘(2) A
PPLICABLE GROUP PURCHASING ORGANI -14
ZATION.—The term ‘applicable group purchasing or-15
ganization’ means a group purchasing organization 16
that is affiliated with or under common ownership 17
with an entity providing pharmacy benefit manage-18
ment services. 19
‘‘(3) C
ONTRACTED COMPENSATION .—The term 20
‘contracted compensation’ means the sum of any in-21
gredient cost and dispensing fee for a drug (inclusive 22
of the out-of-pocket costs to the participant or bene-23
ficiary), or another analogous compensation struc-24
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•HR 2450 IH
ture that the Secretary may specify through regula-1
tions. 2
‘‘(4) G
ROSS SPENDING .—The term ‘gross 3
spending’, with respect to prescription drug benefits 4
under a group health plan or health insurance cov-5
erage, means the amount spent by a group health 6
plan or health insurance issuer on prescription drug 7
benefits, calculated before the application of rebates, 8
fees, alternative discounts, or other remuneration. 9
‘‘(5) N
ET SPENDING.—The term ‘net spending’, 10
with respect to prescription drug benefits under a 11
group health plan or health insurance coverage, 12
means the amount spent by a group health plan or 13
health insurance issuer on prescription drug bene-14
fits, calculated after the application of rebates, fees, 15
alternative discounts, or other remuneration. 16
‘‘(6) P
LAN SPONSOR.—The term ‘plan sponsor’ 17
has the meaning given such term in section 3(16)(B) 18
of the Employee Retirement Income Security Act of 19
1974. 20
‘‘(7) R
EMUNERATION.—The term ‘remunera-21
tion’ has the meaning given such term by the Sec-22
retary through rulemaking, which shall be reevalu-23
ated by the Secretary every 5 years. 24
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‘‘(8) SPECIFIED LARGE EMPLOYER .—The term 1
‘specified large employer’ means, in connection with 2
a group health plan (including group health insur-3
ance coverage offered in connection with such a 4
plan) established or maintained by a single em-5
ployer, with respect to a calendar year or a plan 6
year, as applicable, an employer who employed an 7
average of at least 100 employees on business days 8
during the preceding calendar year or plan year and 9
who employs at least 1 employee on the first day of 10
the calendar year or plan year. 11
‘‘(9) S
PECIFIED LARGE PLAN.—The term ‘spec-12
ified large plan’ means a group health plan (includ-13
ing group health insurance coverage offered in con-14
nection with such a plan) established or maintained 15
by a plan sponsor described in clause (ii) or (iii) of 16
section 3(16)(B) of the Employee Retirement In-17
come Security Act of 1974 that had an average of 18
at least 100 participants on business days during 19
the preceding calendar year or plan year, as applica-20
ble. 21
‘‘(10) W
HOLESALE ACQUISITION COST .—The 22
term ‘wholesale acquisition cost’ has the meaning 23
given such term in section 1847A(c)(6)(B) of the 24
Social Security Act.’’; and 25
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(2) in section 2723 (42 U.S.C. 300gg–22)— 1
(A) in subsection (a)— 2
(i) in paragraph (1), by inserting 3
‘‘(other than section 2799A–11)’’ after 4
‘‘part D’’; and 5
(ii) in paragraph (2), by inserting 6
‘‘(other than section 2799A–11)’’ after 7
‘‘part D’’; and 8
(B) in subsection (b)— 9
(i) in paragraph (1), by inserting 10
‘‘(other than section 2799A–11)’’ after 11
‘‘part D’’; 12
(ii) in paragraph (2)(A), by inserting 13
‘‘(other than section 2799A–11)’’ after 14
‘‘part D’’; and 15
(iii) in paragraph (2)(C)(ii), by insert-16
ing ‘‘(other than section 2799A–11)’’ after 17
‘‘part D’’. 18
(b) E
MPLOYEERETIREMENTINCOMESECURITYACT 19
OF1974.— 20
(1) I
N GENERAL.—Subtitle B of title I of the 21
Employee Retirement Income Security Act of 1974 22
(29 U.S.C. 1021 et seq.) is amended— 23
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(A) in subpart B of part 7 (29 U.S.C. 1
1185 et seq.), by adding at the end the fol-2
lowing: 3
‘‘SEC. 726. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR-4
MACY BENEFIT MANAGEMENT SERVICES. 5
‘‘(a) I
NGENERAL.—For plan years beginning on or 6
after the date that is 30 months after the date of enact-7
ment of this section (referred to in this subsection and 8
subsection (b) as the ‘effective date’), a group health plan 9
or a health insurance issuer offering group health insur-10
ance coverage, or an entity providing pharmacy benefit 11
management services on behalf of such a plan or issuer, 12
shall not enter into a contract, including an extension or 13
renewal of a contract, entered into on or after the effective 14
date, with an applicable entity unless such applicable enti-15
ty agrees to— 16
‘‘(1) not limit or delay the disclosure of infor-17
mation to the group health plan (including such a 18
plan offered through a health insurance issuer) in 19
such a manner that prevents an entity providing 20
pharmacy benefit management services on behalf of 21
a group health plan or health insurance issuer offer-22
ing group health insurance coverage from making 23
the reports described in subsection (b); and 24
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‘‘(2) provide the entity providing pharmacy ben-1
efit management services on behalf of a group health 2
plan or health insurance issuer relevant information 3
necessary to make the reports described in sub-4
section (b). 5
‘‘(b) R
EPORTS.— 6
‘‘(1) I
N GENERAL.—For plan years beginning 7
on or after the effective date, in the case of any con-8
tract between a group health plan or a health insur-9
ance issuer offering group health insurance coverage 10
offered in connection with such a plan and an entity 11
providing pharmacy benefit management services on 12
behalf of such plan or issuer, including an extension 13
or renewal of such a contract, entered into on or 14
after the effective date, the entity providing phar-15
macy benefit management services on behalf of such 16
a group health plan or health insurance issuer, not 17
less frequently than every 6 months (or, at the re-18
quest of a group health plan, not less frequently 19
than quarterly, and under the same conditions, 20
terms, and cost of the semiannual report under this 21
subsection), shall submit to the group health plan a 22
report in accordance with this section. Each such re-23
port shall be made available to such group health 24
plan in plain language, in a machine-readable for-25
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mat, and as the Secretary may determine, other for-1
mats. Each such report shall include the information 2
described in paragraph (2). 3
‘‘(2) I
NFORMATION DESCRIBED .—For purposes 4
of paragraph (1), the information described in this 5
paragraph is, with respect to drugs covered by a 6
group health plan or group health insurance cov-7
erage offered by a health insurance issuer in connec-8
tion with a group health plan during each reporting 9
period— 10
‘‘(A) in the case of a group health plan 11
that is offered by a specified large employer or 12
that is a specified large plan, and is not offered 13
as health insurance coverage, or in the case of 14
health insurance coverage for which the election 15
under paragraph (3) is made for the applicable 16
reporting period— 17
‘‘(i) a list of drugs for which a claim 18
was filed and, with respect to each such 19
drug on such list— 20
‘‘(I) the contracted compensation 21
paid by the group health plan or 22
health insurance issuer for each cov-23
ered drug (identified by the National 24
Drug Code) to the entity providing 25
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•HR 2450 IH
pharmacy benefit management serv-1
ices or other applicable entity on be-2
half of the group health plan or health 3
insurance issuer; 4
‘‘(II) the contracted compensa-5
tion paid to the pharmacy, by any en-6
tity providing pharmacy benefit man-7
agement services or other applicable 8
entity on behalf of the group health 9
plan or health insurance issuer, for 10
each covered drug (identified by the 11
National Drug Code); 12
‘‘(III) for each such claim, the 13
difference between the amount paid 14
under subclause (I) and the amount 15
paid under subclause (II); 16
‘‘(IV) the proprietary name, es-17
tablished name or proper name, and 18
National Drug Code; 19
‘‘(V) for each claim for the drug 20
(including original prescriptions and 21
refills) and for each dosage unit of the 22
drug for which a claim was filed, the 23
type of dispensing channel used to 24
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•HR 2450 IH
furnish the drug, including retail, mail 1
order, or specialty pharmacy; 2
‘‘(VI) with respect to each drug 3
dispensed, for each type of dispensing 4
channel (including retail, mail order, 5
or specialty pharmacy)— 6
‘‘(aa) whether such drug is a 7
brand name drug or a generic 8
drug, and— 9
‘‘(AA) in the case of a 10
brand name drug, the whole-11
sale acquisition cost, listed 12
as cost per days supply and 13
cost per dosage unit, on the 14
date such drug was dis-15
pensed; and 16
‘‘(BB) in the case of a 17
generic drug, the average 18
wholesale price, listed as 19
cost per days supply and 20
cost per dosage unit, on the 21
date such drug was dis-22
pensed; and 23
‘‘(bb) the total number of— 24
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‘‘(AA) prescription 1
claims (including original 2
prescriptions and refills); 3
‘‘(BB) participants and 4
beneficiaries for whom a 5
claim for such drug was 6
filed through the applicable 7
dispensing channel; 8
‘‘(CC) dosage units and 9
dosage units per fill of such 10
drug; and 11
‘‘(DD) days supply of 12
such drug per fill; 13
‘‘(VII) the net price per course of 14
treatment or single fill, such as a 30- 15
day supply or 90-day supply to the 16
plan or coverage after rebates, fees, 17
alternative discounts, or other remu-18
neration received from applicable enti-19
ties; 20
‘‘(VIII) the total amount of out- 21
of-pocket spending by participants 22
and beneficiaries on such drug, in-23
cluding spending through copayments, 24
coinsurance, and deductibles, but not 25
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including any amounts spent by par-1
ticipants and beneficiaries on drugs 2
not covered under the plan or cov-3
erage, or for which no claim is sub-4
mitted under the plan or coverage; 5
‘‘(IX) the total net spending on 6
the drug; 7
‘‘(X) the total amount received, 8
or expected to be received, by the plan 9
or issuer from any applicable entity in 10
rebates, fees, alternative discounts, or 11
other remuneration; 12
‘‘(XI) the total amount received, 13
or expected to be received, by the enti-14
ty providing pharmacy benefit man-15
agement services, from applicable en-16
tities, in rebates, fees, alternative dis-17
counts, or other remuneration from 18
such entities— 19
‘‘(aa) for claims incurred 20
during the reporting period; and 21
‘‘(bb) that is related to utili-22
zation of such drug or spending 23
on such drug; and 24
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‘‘(XII) to the extent feasible, in-1
formation on the total amount of re-2
muneration for such drug, including 3
copayment assistance dollars paid, co-4
payment cards applied, or other dis-5
counts provided by each drug manu-6
facturer (or entity administering co-7
payment assistance on behalf of such 8
drug manufacturer), to the partici-9
pants and beneficiaries enrolled in 10
such plan or coverage; 11
‘‘(ii) a list of each therapeutic class 12
(as defined by the Secretary) for which a 13
claim was filed under the group health 14
plan or health insurance coverage during 15
the reporting period, and, with respect to 16
each such therapeutic class— 17
‘‘(I) the total gross spending on 18
drugs in such class before rebates, 19
price concessions, alternative dis-20
counts, or other remuneration from 21
applicable entities; 22
‘‘(II) the net spending in such 23
class after such rebates, price conces-24
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•HR 2450 IH
sions, alternative discounts, or other 1
remuneration from applicable entities; 2
‘‘(III) the total amount received, 3
or expected to be received, by the enti-4
ty providing pharmacy benefit man-5
agement services, from applicable en-6
tities, in rebates, fees, alternative dis-7
counts, or other remuneration from 8
such entities— 9
‘‘(aa) for claims incurred 10
during the reporting period; and 11
‘‘(bb) that is related to utili-12
zation of drugs or drug spending; 13
‘‘(IV) the average net spending 14
per 30-day supply and per 90-day 15
supply by the plan or by the issuer 16
with respect to such coverage and its 17
participants and beneficiaries, among 18
all drugs within the therapeutic class 19
for which a claim was filed during the 20
reporting period; 21
‘‘(V) the number of participants 22
and beneficiaries who filled a prescrip-23
tion for a drug in such class, includ-24
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ing the National Drug Code for each 1
such drug; 2
‘‘(VI) if applicable, a description 3
of the formulary tiers and utilization 4
mechanisms (such as prior authoriza-5
tion or step therapy) employed for 6
drugs in that class; and 7
‘‘(VII) the total out-of-pocket 8
spending under the plan or coverage 9
by participants and beneficiaries, in-10
cluding spending through copayments, 11
coinsurance, and deductibles, but not 12
including any amounts spent by par-13
ticipants and beneficiaries on drugs 14
not covered under the plan or cov-15
erage or for which no claim is sub-16
mitted under the plan or coverage; 17
‘‘(iii) with respect to any drug for 18
which gross spending under the group 19
health plan or health insurance coverage 20
exceeded $10,000 during the reporting pe-21
riod or, in the case that gross spending 22
under the group health plan or coverage 23
exceeded $10,000 during the reporting pe-24
riod with respect to fewer than 50 drugs, 25
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•HR 2450 IH
with respect to the 50 prescription drugs 1
with the highest spending during the re-2
porting period— 3
‘‘(I) a list of all other drugs in 4
the same therapeutic class as such 5
drug; 6
‘‘(II) if applicable, the rationale 7
for the formulary placement of such 8
drug in that therapeutic category or 9
class, selected from a list of standard 10
rationales established by the Sec-11
retary, in consultation with stake-12
holders; and 13
‘‘(III) any change in formulary 14
placement compared to the prior plan 15
year; and 16
‘‘(iv) in the case that such plan or 17
issuer (or an entity providing pharmacy 18
benefit management services on behalf of 19
such plan or issuer) has an affiliated phar-20
macy or pharmacy under common owner-21
ship, including mandatory mail and spe-22
cialty home delivery programs, retail and 23
mail auto-refill programs, and cost sharing 24
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assistance incentives funded by an entity 1
providing pharmacy benefit services— 2
‘‘(I) an explanation of any ben-3
efit design parameters that encourage 4
or require participants and bene-5
ficiaries in the plan or coverage to fill 6
prescriptions at mail order, specialty, 7
or retail pharmacies; 8
‘‘(II) the percentage of total pre-9
scriptions dispensed by such phar-10
macies to participants or beneficiaries 11
in such plan or coverage; and 12
‘‘(III) a list of all drugs dis-13
pensed by such pharmacies to partici-14
pants or beneficiaries enrolled in such 15
plan or coverage, and, with respect to 16
each drug dispensed— 17
‘‘(aa) the amount charged, 18
per dosage unit, per 30-day sup-19
ply, or per 90-day supply (as ap-20
plicable) to the plan or issuer, 21
and to participants and bene-22
ficiaries; 23
‘‘(bb) the median amount 24
charged to such plan or issuer, 25
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and the interquartile range of the 1
costs, per dosage unit, per 30- 2
day supply, and per 90-day sup-3
ply, including amounts paid by 4
the participants and bene-5
ficiaries, when the same drug is 6
dispensed by other pharmacies 7
that are not affiliated with or 8
under common ownership with 9
the entity and that are included 10
in the pharmacy network of such 11
plan or coverage; 12
‘‘(cc) the lowest cost per 13
dosage unit, per 30-day supply 14
and per 90-day supply, for each 15
such drug, including amounts 16
charged to the plan or coverage 17
and to participants and bene-18
ficiaries, that is available from 19
any pharmacy included in the 20
network of such plan or coverage; 21
and 22
‘‘(dd) the net acquisition 23
cost per dosage unit, per 30-day 24
supply, and per 90-day supply, if 25
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•HR 2450 IH
such drug is subject to a max-1
imum price discount; and 2
‘‘(B) with respect to any group health 3
plan, including group health insurance coverage 4
offered in connection with such a plan, regard-5
less of whether the plan or coverage is offered 6
by a specified large employer or whether it is a 7
specified large plan— 8
‘‘(i) a summary document for the 9
group health plan that includes such infor-10
mation described in clauses (i) through (iv) 11
of subparagraph (A), as specified by the 12
Secretary through guidance, program in-13
struction, or otherwise (with no require-14
ment of notice and comment rulemaking), 15
that the Secretary determines useful to 16
group health plans for purposes of select-17
ing pharmacy benefit management serv-18
ices, such as an estimated net price to 19
group health plan and participant or bene-20
ficiary, a cost per claim, the fee structure 21
or reimbursement model, and estimated 22
cost per participant or beneficiary; 23
‘‘(ii) a summary document for plans 24
and issuers to provide to participants and 25
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beneficiaries, which shall be made available 1
to participants or beneficiaries upon re-2
quest to their group health plan (including 3
in the case of group health insurance cov-4
erage offered in connection with such a 5
plan), that— 6
‘‘(I) contains such information 7
described in clauses (iii), (iv), (v), and 8
(vi), as applicable, as specified by the 9
Secretary through guidance, program 10
instruction, or otherwise (with no re-11
quirement of notice and comment 12
rulemaking) that the Secretary deter-13
mines useful to participants or bene-14
ficiaries in better understanding the 15
plan or coverage or benefits under 16
such plan or coverage; 17
‘‘(II) contains only aggregate in-18
formation; and 19
‘‘(III) states that participants 20
and beneficiaries may request specific, 21
claims-level information required to be 22
furnished under subsection (c) from 23
the group health plan or health insur-24
ance issuer; 25
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‘‘(iii) with respect to drugs covered by 1
such plan or coverage during such report-2
ing period— 3
‘‘(I) the total net spending by the 4
plan or coverage for all such drugs; 5
‘‘(II) the total amount received, 6
or expected to be received, by the plan 7
or issuer from any applicable entity in 8
rebates, fees, alternative discounts, or 9
other remuneration; and 10
‘‘(III) to the extent feasible, in-11
formation on the total amount of re-12
muneration for such drugs, including 13
copayment assistance dollars paid, co-14
payment cards applied, or other dis-15
counts provided by each drug manu-16
facturer (or entity administering co-17
payment assistance on behalf of such 18
drug manufacturer) to participants 19
and beneficiaries; 20
‘‘(iv) amounts paid directly or indi-21
rectly in rebates, fees, or any other type of 22
compensation (as defined in section 23
408(b)(2)(B)(ii)(dd)(AA)) to brokerage 24
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firms, brokers, consultants, advisors, or 1
any other individual or firm, for— 2
‘‘(I) the referral of the group 3
health plan’s or health insurance 4
issuer’s business to an entity pro-5
viding pharmacy benefit management 6
services, including the identity of the 7
recipient of such amounts; 8
‘‘(II) consideration of the entity 9
providing pharmacy benefit manage-10
ment services by the group health 11
plan or health insurance issuer; or 12
‘‘(III) the retention of the entity 13
by the group health plan or health in-14
surance issuer; 15
‘‘(v) an explanation of any benefit de-16
sign parameters that encourage or require 17
participants and beneficiaries in such plan 18
or coverage to fill prescriptions at mail 19
order, specialty, or retail pharmacies that 20
are affiliated with or under common own-21
ership with the entity providing pharmacy 22
benefit management services under such 23
plan or coverage, including mandatory mail 24
and specialty home delivery programs, re-25
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tail and mail auto-refill programs, and 1
cost-sharing assistance incentives directly 2
or indirectly funded by such entity; and 3
‘‘(vi) total gross spending on all drugs 4
under the plan or coverage during the re-5
porting period. 6
‘‘(3) O
PT-IN FOR GROUP HEALTH INSURANCE 7
COVERAGE OFFERED BY A SPECIFIED LARGE EM -8
PLOYER OR THAT IS A SPECIFIED LARGE PLAN .—In 9
the case of group health insurance coverage offered 10
in connection with a group health plan that is of-11
fered by a specified large employer or is a specified 12
large plan, such group health plan may, on an an-13
nual basis, for plan years beginning on or after the 14
date that is 30 months after the date of enactment 15
of this section, elect to require an entity providing 16
pharmacy benefit management services on behalf of 17
the health insurance issuer to submit to such group 18
health plan a report that includes all of the informa-19
tion described in paragraph (2)(A), in addition to 20
the information described in paragraph (2)(B). 21
‘‘(4) P
RIVACY REQUIREMENTS .— 22
‘‘(A) I
N GENERAL.—An entity providing 23
pharmacy benefit management services on be-24
half of a group health plan or a health insur-25
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ance issuer offering group health insurance cov-1
erage shall report information under paragraph 2
(1) in a manner consistent with the privacy reg-3
ulations promulgated under section 13402(a) of 4
the Health Information Technology for Eco-5
nomic and Clinical Health Act (42 U.S.C. 6
17932(a)) and consistent with the privacy regu-7
lations promulgated under the Health Insur-8
ance Portability and Accountability Act of 1996 9
in part 160 and subparts A and E of part 164 10
of title 45, Code of Federal Regulations (or suc-11
cessor regulations) (referred to in this para-12
graph as the ‘HIPAA privacy regulations’) and 13
shall restrict the use and disclosure of such in-14
formation according to such privacy regulations 15
and such HIPAA privacy regulations. 16
‘‘(B) A
DDITIONAL REQUIREMENTS .— 17
‘‘(i) I
N GENERAL.—An entity pro-18
viding pharmacy benefit management serv-19
ices on behalf of a group health plan or 20
health insurance issuer offering group 21
health insurance coverage that submits a 22
report under paragraph (1) shall ensure 23
that such report contains only summary 24
health information, as defined in section 25
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•HR 2450 IH
164.504(a) of title 45, Code of Federal 1
Regulations (or successor regulations). 2
‘‘(ii) R
ESTRICTIONS.—In carrying out 3
this subsection, a group health plan shall 4
comply with section 164.504(f) of title 45, 5
Code of Federal Regulations (or a suc-6
cessor regulation), and a plan sponsor shall 7
act in accordance with the terms of the 8
agreement described in such section. 9
‘‘(C) R
ULE OF CONSTRUCTION .— 10
‘‘(i) Nothing in this section shall be 11
construed to modify the requirements for 12
the creation, receipt, maintenance, or 13
transmission of protected health informa-14
tion under the HIPAA privacy regulations. 15
‘‘(ii) Nothing in this section shall be 16
construed to affect the application of any 17
Federal or State privacy or civil rights law, 18
including the HIPAA privacy regulations, 19
the Genetic Information Nondiscrimination 20
Act of 2008 (Public Law 110–233) (in-21
cluding the amendments made by such 22
Act), the Americans with Disabilities Act 23
of 1990 (42 U.S.C. 12101 et sec), section 24
504 of the Rehabilitation Act of 1973 (29 25
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•HR 2450 IH
U.S.C. 794), section 1557 of the Patient 1
Protection and Affordable Care Act (42 2
U.S.C. 18116), title VI of the Civil Rights 3
Act of 1964 (42 U.S.C. 2000d), and title 4
VII of the Civil Rights Act of 1964 (42 5
U.S.C. 2000e). 6
‘‘(D) W
RITTEN NOTICE.—Each plan year, 7
group health plans, including with respect to 8
group health insurance coverage offered in con-9
nection with a group health plan, shall provide 10
to each participant or beneficiary written notice 11
informing the participant or beneficiary of the 12
requirement for entities providing pharmacy 13
benefit management services on behalf of the 14
group health plan or health insurance issuer of-15
fering group health insurance coverage to sub-16
mit reports to group health plans under para-17
graph (1), as applicable, which may include in-18
corporating such notification in plan documents 19
provided to the participant or beneficiary, or 20
providing individual notification. 21
‘‘(E) L
IMITATION TO BUSINESS ASSOCI -22
ATES.—A group health plan receiving a report 23
under paragraph (1) may disclose such informa-24
tion only to the entity from which the report 25
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•HR 2450 IH
was received or to that entity’s business associ-1
ates as defined in section 160.103 of title 45, 2
Code of Federal Regulations (or successor regu-3
lations) or as permitted by the HIPAA privacy 4
regulations. 5
‘‘(F) C
LARIFICATION REGARDING PUBLIC 6
DISCLOSURE OF INFORMATION .—Nothing in 7
this section shall prevent an entity providing 8
pharmacy benefit management services on be-9
half of a group health plan or health insurance 10
issuer offering group health insurance coverage, 11
from placing reasonable restrictions on the pub-12
lic disclosure of the information contained in a 13
report described in paragraph (1), except that 14
such plan, issuer, or entity may not— 15
‘‘(i) restrict disclosure of such report 16
to the Department of Health and Human 17
Services, the Department of Labor, or the 18
Department of the Treasury; or 19
‘‘(ii) prevent disclosure for the pur-20
poses of subsection (c), or any other public 21
disclosure requirement under this section. 22
‘‘(G) L
IMITED FORM OF REPORT .—The 23
Secretary shall define through rulemaking a 24
limited form of the report under paragraph (1) 25
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required with respect to any group health plan 1
established by a plan sponsor that is, or is af-2
filiated with, a drug manufacturer, drug whole-3
saler, or other direct participant in the drug 4
supply chain, in order to prevent anti-competi-5
tive behavior. 6
‘‘(5) S
TANDARD FORMAT AND REGULATIONS .— 7
‘‘(A) I
N GENERAL.—Not later than 18 8
months after the date of enactment of this sec-9
tion, the Secretary shall specify through rule-10
making a standard format for entities providing 11
pharmacy benefit management services on be-12
half of group health plans and health insurance 13
issuers offering group health insurance cov-14
erage, to submit reports required under para-15
graph (1). 16
‘‘(B) A
DDITIONAL REGULATIONS .—Not 17
later than 18 months after the date of enact-18
ment of this section, the Secretary shall, 19
through rulemaking, promulgate any other final 20
regulations necessary to implement the require-21
ments of this section. In promulgating such 22
regulations, the Secretary shall, to the extent 23
practicable, align the reporting requirements 24
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under this section with the reporting require-1
ments under section 725. 2
‘‘(c) R
EQUIREMENTTOPROVIDEINFORMATION TO 3
P
ARTICIPANTS ORBENEFICIARIES.—A group health plan, 4
including with respect to group health insurance coverage 5
offered in connection with a group health plan, upon re-6
quest of a participant or beneficiary, shall provide to such 7
participant or beneficiary— 8
‘‘(1) the summary document described in sub-9
section (b)(2)(B)(ii); and 10
‘‘(2) the information described in subsection 11
(b)(2)(A)(i)(III) with respect to a claim made by or 12
on behalf of such participant or beneficiary. 13
‘‘(d) R
ULE OFCONSTRUCTION.—Nothing in this sec-14
tion shall be construed to permit a health insurance issuer, 15
group health plan, entity providing pharmacy benefit man-16
agement services on behalf of a group health plan or 17
health insurance issuer, or other entity to restrict disclo-18
sure to, or otherwise limit the access of, the Secretary to 19
a report described in subsection (b)(1) or information re-20
lated to compliance with subsections (a), (b), or (c) of this 21
section or section 502(c)(13) by such issuer, plan, or enti-22
ty. 23
‘‘(e) D
EFINITIONS.—In this section: 24
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‘‘(1) APPLICABLE ENTITY.—The term ‘applica-1
ble entity’ means— 2
‘‘(A) an applicable group purchasing orga-3
nization, drug manufacturer, distributor, whole-4
saler, rebate aggregator (or other purchasing 5
entity designed to aggregate rebates), or associ-6
ated third party; 7
‘‘(B) any subsidiary, parent, affiliate, or 8
subcontractor of a group health plan, health in-9
surance issuer, entity that provides pharmacy 10
benefit management services on behalf of such 11
a plan or issuer, or any entity described in sub-12
paragraph (A); or 13
‘‘(C) such other entity as the Secretary 14
may specify through rulemaking. 15
‘‘(2) A
PPLICABLE GROUP PURCHASING ORGANI -16
ZATION.—The term ‘applicable group purchasing or-17
ganization’ means a group purchasing organization 18
that is affiliated with or under common ownership 19
with an entity providing pharmacy benefit manage-20
ment services. 21
‘‘(3) C
ONTRACTED COMPENSATION .—The term 22
‘contracted compensation’ means the sum of any in-23
gredient cost and dispensing fee for a drug (inclusive 24
of the out-of-pocket costs to the participant or bene-25
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•HR 2450 IH
ficiary), or another analogous compensation struc-1
ture that the Secretary may specify through regula-2
tions. 3
‘‘(4) G
ROSS SPENDING .—The term ‘gross 4
spending’, with respect to prescription drug benefits 5
under a group health plan or health insurance cov-6
erage, means the amount spent by a group health 7
plan or health insurance issuer on prescription drug 8
benefits, calculated before the application of rebates, 9
fees, alternative discounts, or other remuneration. 10
‘‘(5) N
ET SPENDING.—The term ‘net spending’, 11
with respect to prescription drug benefits under a 12
group health plan or health insurance coverage, 13
means the amount spent by a group health plan or 14
health insurance issuer on prescription drug bene-15
fits, calculated after the application of rebates, fees, 16
alternative discounts, or other remuneration. 17
‘‘(6) P
LAN SPONSOR.—The term ‘plan sponsor’ 18
has the meaning given such term in section 19
3(16)(B). 20
‘‘(7) R
EMUNERATION.—The term ‘remunera-21
tion’ has the meaning given such term by the Sec-22
retary through rulemaking, which shall be reevalu-23
ated by the Secretary every 5 years. 24
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‘‘(8) SPECIFIED LARGE EMPLOYER .—The term 1
‘specified large employer’ means, in connection with 2
a group health plan (including group health insur-3
ance coverage offered in connection with such a 4
plan) established or maintained by a single em-5
ployer, with respect to a calendar year or a plan 6
year, as applicable, an employer who employed an 7
average of at least 100 employees on business days 8
during the preceding calendar year or plan year and 9
who employs at least 1 employee on the first day of 10
the calendar year or plan year. 11
‘‘(9) S
PECIFIED LARGE PLAN.—The term ‘spec-12
ified large plan’ means a group health plan (includ-13
ing group health insurance coverage offered in con-14
nection with such a plan) established or maintained 15
by a plan sponsor described in clause (ii) or (iii) of 16
section 3(16)(B) that had an average of at least 100 17
participants on business days during the preceding 18
calendar year or plan year, as applicable. 19
‘‘(10) W
HOLESALE ACQUISITION COST .—The 20
term ‘wholesale acquisition cost’ has the meaning 21
given such term in section 1847A(c)(6)(B) of the 22
Social Security Act (42 U.S.C. 1395w– 23
3a(c)(6)(B)).’’; 24
(B) in section 502 (29 U.S.C. 1132)— 25
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•HR 2450 IH
(i) in subsection (a)(6), by striking 1
‘‘or (9)’’ and inserting ‘‘(9), or (13)’’; 2
(ii) in subsection (b)(3), by striking 3
‘‘under subsection (c)(9)’’ and inserting 4
‘‘under paragraphs (9) and (13) of sub-5
section (c)’’; and 6
(iii) in subsection (c), by adding at 7
the end the following: 8
‘‘(13) S
ECRETARIAL ENFORCEMENT AUTHORITY 9
RELATING TO OVERSIGHT OF PHARMACY BENEFIT 10
MANAGEMENT SERVICES .— 11
‘‘(A) F
AILURE TO PROVIDE INFORMA -12
TION.—The Secretary may impose a penalty 13
against a plan administrator of a group health 14
plan, a health insurance issuer offering group 15
health insurance coverage, or an entity pro-16
viding pharmacy benefit management services 17
on behalf of such a plan or issuer, or an appli-18
cable entity (as defined in section 726(f)) that 19
violates section 726(a); an entity providing 20
pharmacy benefit management services on be-21
half of such a plan or issuer that fails to pro-22
vide the information required under section 23
726(b); or any person who causes a group 24
health plan to fail to provide the information 25
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•HR 2450 IH
required under section 726(c), in the amount of 1
$10,000 for each day during which such viola-2
tion continues or such information is not dis-3
closed or reported. 4
‘‘(B) F
ALSE INFORMATION .—The Sec-5
retary may impose a penalty against a plan ad-6
ministrator of a group health plan, a health in-7
surance issuer offering group health insurance 8
coverage, an entity providing pharmacy benefit 9
management services, or an applicable entity 10
(as defined in section 726(f)) that knowingly 11
provides false information under section 726, in 12
an amount not to exceed $100,000 for each 13
item of false information. Such penalty shall be 14
in addition to other penalties as may be pre-15
scribed by law. 16
‘‘(C) W
AIVERS.—The Secretary may waive 17
penalties under subparagraph (A), or extend 18
the period of time for compliance with a re-19
quirement of this section, for an entity in viola-20
tion of section 726 that has made a good-faith 21
effort to comply with the requirements of sec-22
tion 726.’’; and 23
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(C) in section 732(a) (29 U.S.C. 1
1191a(a)), by striking ‘‘section 711’’ and in-2
serting ‘‘sections 711 and 726’’. 3
(2) C
LERICAL AMENDMENT .—The table of con-4
tents in section 1 of the Employee Retirement In-5
come Security Act of 1974 (29 U.S.C. 1001 et seq.) 6
is amended by inserting after the item relating to 7
section 725 the following new item: 8
‘‘Sec. 726. Oversight of entities that provide pharmacy benefit management 
services.’’. 
(c) INTERNALREVENUECODE OF1986.— 9
(1) I
N GENERAL.—Chapter 100 of the Internal 10
Revenue Code of 1986 is amended— 11
(A) by adding at the end of subchapter B 12
the following: 13
‘‘SEC. 9826. OVERSIGHT OF ENTITIES THAT PROVIDE PHAR-14
MACY BENEFIT MANAGEMENT SERVICES. 15
‘‘(a) I
NGENERAL.—For plan years beginning on or 16
after the date that is 30 months after the date of enact-17
ment of this section (referred to in this subsection and 18
subsection (b) as the ‘effective date’), a group health plan, 19
or an entity providing pharmacy benefit management serv-20
ices on behalf of such a plan, shall not enter into a con-21
tract, including an extension or renewal of a contract, en-22
tered into on or after the effective date, with an applicable 23
entity unless such applicable entity agrees to— 24
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•HR 2450 IH
‘‘(1) not limit or delay the disclosure of infor-1
mation to the group health plan in such a manner 2
that prevents an entity providing pharmacy benefit 3
management services on behalf of a group health 4
plan from making the reports described in sub-5
section (b); and 6
‘‘(2) provide the entity providing pharmacy ben-7
efit management services on behalf of a group health 8
plan relevant information necessary to make the re-9
ports described in subsection (b). 10
‘‘(b) R
EPORTS.— 11
‘‘(1) I
N GENERAL.—For plan years beginning 12
on or after the effective date, in the case of any con-13
tract between a group health plan and an entity pro-14
viding pharmacy benefit management services on be-15
half of such plan, including an extension or renewal 16
of such a contract, entered into on or after the effec-17
tive date, the entity providing pharmacy benefit 18
management services on behalf of such a group 19
health plan, not less frequently than every 6 months 20
(or, at the request of a group health plan, not less 21
frequently than quarterly, and under the same con-22
ditions, terms, and cost of the semiannual report 23
under this subsection), shall submit to the group 24
health plan a report in accordance with this section. 25
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Each such report shall be made available to such 1
group health plan in plain language, in a machine- 2
readable format, and as the Secretary may deter-3
mine, other formats. Each such report shall include 4
the information described in paragraph (2). 5
‘‘(2) I
NFORMATION DESCRIBED .—For purposes 6
of paragraph (1), the information described in this 7
paragraph is, with respect to drugs covered by a 8
group health plan during each reporting period— 9
‘‘(A) in the case of a group health plan 10
that is offered by a specified large employer or 11
that is a specified large plan, and is not offered 12
as health insurance coverage, or in the case of 13
health insurance coverage for which the election 14
under paragraph (3) is made for the applicable 15
reporting period— 16
‘‘(i) a list of drugs for which a claim 17
was filed and, with respect to each such 18
drug on such list— 19
‘‘(I) the contracted compensation 20
paid by the group health plan for each 21
covered drug (identified by the Na-22
tional Drug Code) to the entity pro-23
viding pharmacy benefit management 24
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•HR 2450 IH
services or other applicable entity on 1
behalf of the group health plan; 2
‘‘(II) the contracted compensa-3
tion paid to the pharmacy, by any en-4
tity providing pharmacy benefit man-5
agement services or other applicable 6
entity on behalf of the group health 7
plan, for each covered drug (identified 8
by the National Drug Code); 9
‘‘(III) for each such claim, the 10
difference between the amount paid 11
under subclause (I) and the amount 12
paid under subclause (II); 13
‘‘(IV) the proprietary name, es-14
tablished name or proper name, and 15
National Drug Code; 16
‘‘(V) for each claim for the drug 17
(including original prescriptions and 18
refills) and for each dosage unit of the 19
drug for which a claim was filed, the 20
type of dispensing channel used to 21
furnish the drug, including retail, mail 22
order, or specialty pharmacy; 23
‘‘(VI) with respect to each drug 24
dispensed, for each type of dispensing 25
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channel (including retail, mail order, 1
or specialty pharmacy)— 2
‘‘(aa) whether such drug is a 3
brand name drug or a generic 4
drug, and— 5
‘‘(AA) in the case of a 6
brand name drug, the whole-7
sale acquisition cost, listed 8
as cost per days supply and 9
cost per dosage unit, on the 10
date such drug was dis-11
pensed; and 12
‘‘(BB) in the case of a 13
generic drug, the average 14
wholesale price, listed as 15
cost per days supply and 16
cost per dosage unit, on the 17
date such drug was dis-18
pensed; and 19
‘‘(bb) the total number of— 20
‘‘(AA) prescription 21
claims (including original 22
prescriptions and refills); 23
‘‘(BB) participants and 24
beneficiaries for whom a 25
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•HR 2450 IH
claim for such drug was 1
filed through the applicable 2
dispensing channel; 3
‘‘(CC) dosage units and 4
dosage units per fill of such 5
drug; and 6
‘‘(DD) days supply of 7
such drug per fill; 8
‘‘(VII) the net price per course of 9
treatment or single fill, such as a 30- 10
day supply or 90-day supply to the 11
plan after rebates, fees, alternative 12
discounts, or other remuneration re-13
ceived from applicable entities; 14
‘‘(VIII) the total amount of out- 15
of-pocket spending by participants 16
and beneficiaries on such drug, in-17
cluding spending through copayments, 18
coinsurance, and deductibles, but not 19
including any amounts spent by par-20
ticipants and beneficiaries on drugs 21
not covered under the plan, or for 22
which no claim is submitted under the 23
plan; 24
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‘‘(IX) the total net spending on 1
the drug; 2
‘‘(X) the total amount received, 3
or expected to be received, by the plan 4
from any applicable entity in rebates, 5
fees, alternative discounts, or other 6
remuneration; 7
‘‘(XI) the total amount received, 8
or expected to be received, by the enti-9
ty providing pharmacy benefit man-10
agement services, from applicable en-11
tities, in rebates, fees, alternative dis-12
counts, or other remuneration from 13
such entities— 14
‘‘(aa) for claims incurred 15
during the reporting period; and 16
‘‘(bb) that is related to utili-17
zation of such drug or spending 18
on such drug; and 19
‘‘(XII) to the extent feasible, in-20
formation on the total amount of re-21
muneration for such drug, including 22
copayment assistance dollars paid, co-23
payment cards applied, or other dis-24
counts provided by each drug manu-25
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•HR 2450 IH
facturer (or entity administering co-1
payment assistance on behalf of such 2
drug manufacturer), to the partici-3
pants and beneficiaries enrolled in 4
such plan; 5
‘‘(ii) a list of each therapeutic class 6
(as defined by the Secretary) for which a 7
claim was filed under the group health 8
plan during the reporting period, and, with 9
respect to each such therapeutic class— 10
‘‘(I) the total gross spending on 11
drugs in such class before rebates, 12
price concessions, alternative dis-13
counts, or other remuneration from 14
applicable entities; 15
‘‘(II) the net spending in such 16
class after such rebates, price conces-17
sions, alternative discounts, or other 18
remuneration from applicable entities; 19
‘‘(III) the total amount received, 20
or expected to be received, by the enti-21
ty providing pharmacy benefit man-22
agement services, from applicable en-23
tities, in rebates, fees, alternative dis-24
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•HR 2450 IH
counts, or other remuneration from 1
such entities— 2
‘‘(aa) for claims incurred 3
during the reporting period; and 4
‘‘(bb) that is related to utili-5
zation of drugs or drug spending; 6
‘‘(IV) the average net spending 7
per 30-day supply and per 90-day 8
supply by the plan and its partici-9
pants and beneficiaries, among all 10
drugs within the therapeutic class for 11
which a claim was filed during the re-12
porting period; 13
‘‘(V) the number of participants 14
and beneficiaries who filled a prescrip-15
tion for a drug in such class, includ-16
ing the National Drug Code for each 17
such drug; 18
‘‘(VI) if applicable, a description 19
of the formulary tiers and utilization 20
mechanisms (such as prior authoriza-21
tion or step therapy) employed for 22
drugs in that class; and 23
‘‘(VII) the total out-of-pocket 24
spending under the plan by partici-25
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pants and beneficiaries, including 1
spending through copayments, coin-2
surance, and deductibles, but not in-3
cluding any amounts spent by partici-4
pants and beneficiaries on drugs not 5
covered under the plan or for which 6
no claim is submitted under the plan; 7
‘‘(iii) with respect to any drug for 8
which gross spending under the group 9
health plan exceeded $10,000 during the 10
reporting period or, in the case that gross 11
spending under the group health plan ex-12
ceeded $10,000 during the reporting pe-13
riod with respect to fewer than 50 drugs, 14
with respect to the 50 prescription drugs 15
with the highest spending during the re-16
porting period— 17
‘‘(I) a list of all other drugs in 18
the same therapeutic class as such 19
drug; 20
‘‘(II) if applicable, the rationale 21
for the formulary placement of such 22
drug in that therapeutic category or 23
class, selected from a list of standard 24
rationales established by the Sec-25
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retary, in consultation with stake-1
holders; and 2
‘‘(III) any change in formulary 3
placement compared to the prior plan 4
year; and 5
‘‘(iv) in the case that such plan (or an 6
entity providing pharmacy benefit manage-7
ment services on behalf of such plan) has 8
an affiliated pharmacy or pharmacy under 9
common ownership, including mandatory 10
mail and specialty home delivery programs, 11
retail and mail auto-refill programs, and 12
cost sharing assistance incentives funded 13
by an entity providing pharmacy benefit 14
services— 15
‘‘(I) an explanation of any ben-16
efit design parameters that encourage 17
or require participants and bene-18
ficiaries in the plan to fill prescrip-19
tions at mail order, specialty, or retail 20
pharmacies; 21
‘‘(II) the percentage of total pre-22
scriptions dispensed by such phar-23
macies to participants or beneficiaries 24
in such plan; and 25
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‘‘(III) a list of all drugs dis-1
pensed by such pharmacies to partici-2
pants or beneficiaries enrolled in such 3
plan, and, with respect to each drug 4
dispensed— 5
‘‘(aa) the amount charged, 6
per dosage unit, per 30-day sup-7
ply, or per 90-day supply (as ap-8
plicable) to the plan, and to par-9
ticipants and beneficiaries; 10
‘‘(bb) the median amount 11
charged to such plan, and the 12
interquartile range of the costs, 13
per dosage unit, per 30-day sup-14
ply, and per 90-day supply, in-15
cluding amounts paid by the par-16
ticipants and beneficiaries, when 17
the same drug is dispensed by 18
other pharmacies that are not af-19
filiated with or under common 20
ownership with the entity and 21
that are included in the phar-22
macy network of such plan; 23
‘‘(cc) the lowest cost per 24
dosage unit, per 30-day supply 25
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and per 90-day supply, for each 1
such drug, including amounts 2
charged to the plan and to par-3
ticipants and beneficiaries, that 4
is available from any pharmacy 5
included in the network of such 6
plan; and 7
‘‘(dd) the net acquisition 8
cost per dosage unit, per 30-day 9
supply, and per 90-day supply, if 10
such drug is subject to a max-11
imum price discount; and 12
‘‘(B) with respect to any group health 13
plan, regardless of whether the plan is offered 14
by a specified large employer or whether it is a 15
specified large plan— 16
‘‘(i) a summary document for the 17
group health plan that includes such infor-18
mation described in clauses (i) through (iv) 19
of subparagraph (A), as specified by the 20
Secretary through guidance, program in-21
struction, or otherwise (with no require-22
ment of notice and comment rulemaking), 23
that the Secretary determines useful to 24
group health plans for purposes of select-25
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•HR 2450 IH
ing pharmacy benefit management serv-1
ices, such as an estimated net price to 2
group health plan and participant or bene-3
ficiary, a cost per claim, the fee structure 4
or reimbursement model, and estimated 5
cost per participant or beneficiary; 6
‘‘(ii) a summary document for plans 7
to provide to participants and beneficiaries, 8
which shall be made available to partici-9
pants or beneficiaries upon request to their 10
group health plan, that— 11
‘‘(I) contains such information 12
described in clauses (iii), (iv), (v), and 13
(vi), as applicable, as specified by the 14
Secretary through guidance, program 15
instruction, or otherwise (with no re-16
quirement of notice and comment 17
rulemaking) that the Secretary deter-18
mines useful to participants or bene-19
ficiaries in better understanding the 20
plan or benefits under such plan; 21
‘‘(II) contains only aggregate in-22
formation; and 23
‘‘(III) states that participants 24
and beneficiaries may request specific, 25
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•HR 2450 IH
claims-level information required to be 1
furnished under subsection (c) from 2
the group health plan; and 3
‘‘(iii) with respect to drugs covered by 4
such plan during such reporting period— 5
‘‘(I) the total net spending by the 6
plan for all such drugs; 7
‘‘(II) the total amount received, 8
or expected to be received, by the plan 9
from any applicable entity in rebates, 10
fees, alternative discounts, or other 11
remuneration; and 12
‘‘(III) to the extent feasible, in-13
formation on the total amount of re-14
muneration for such drugs, including 15
copayment assistance dollars paid, co-16
payment cards applied, or other dis-17
counts provided by each drug manu-18
facturer (or entity administering co-19
payment assistance on behalf of such 20
drug manufacturer) to participants 21
and beneficiaries; 22
‘‘(iv) amounts paid directly or indi-23
rectly in rebates, fees, or any other type of 24
compensation (as defined in section 25
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•HR 2450 IH
408(b)(2)(B)(ii)(dd)(AA) of the Employee 1
Retirement Income Security Act (29 2
U.S.C. 1108(b)(2)(B)(ii)(dd)(AA))) to bro-3
kerage firms, brokers, consultants, advi-4
sors, or any other individual or firm, for— 5
‘‘(I) the referral of the group 6
health plan’s business to an entity 7
providing pharmacy benefit manage-8
ment services, including the identity 9
of the recipient of such amounts; 10
‘‘(II) consideration of the entity 11
providing pharmacy benefit manage-12
ment services by the group health 13
plan; or 14
‘‘(III) the retention of the entity 15
by the group health plan; 16
‘‘(v) an explanation of any benefit de-17
sign parameters that encourage or require 18
participants and beneficiaries in such plan 19
to fill prescriptions at mail order, specialty, 20
or retail pharmacies that are affiliated with 21
or under common ownership with the enti-22
ty providing pharmacy benefit management 23
services under such plan, including manda-24
tory mail and specialty home delivery pro-25
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•HR 2450 IH
grams, retail and mail auto-refill pro-1
grams, and cost-sharing assistance incen-2
tives directly or indirectly funded by such 3
entity; and 4
‘‘(vi) total gross spending on all drugs 5
under the plan during the reporting period. 6
‘‘(3) O
PT-IN FOR GROUP HEALTH INSURANCE 7
COVERAGE OFFERED BY A SPECIFIED LARGE EM -8
PLOYER OR THAT IS A SPECIFIED LARGE PLAN .—In 9
the case of group health insurance coverage offered 10
in connection with a group health plan that is of-11
fered by a specified large employer or is a specified 12
large plan, such group health plan may, on an an-13
nual basis, for plan years beginning on or after the 14
date that is 30 months after the date of enactment 15
of this section, elect to require an entity providing 16
pharmacy benefit management services on behalf of 17
the health insurance issuer to submit to such group 18
health plan a report that includes all of the informa-19
tion described in paragraph (2)(A), in addition to 20
the information described in paragraph (2)(B). 21
‘‘(4) P
RIVACY REQUIREMENTS .— 22
‘‘(A) I
N GENERAL.—An entity providing 23
pharmacy benefit management services on be-24
half of a group health plan shall report infor-25
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•HR 2450 IH
mation under paragraph (1) in a manner con-1
sistent with the privacy regulations promul-2
gated under section 13402(a) of the Health In-3
formation Technology for Economic and Clin-4
ical Health Act (42 U.S.C. 17932(a)) and con-5
sistent with the privacy regulations promul-6
gated under the Health Insurance Portability 7
and Accountability Act of 1996 in part 160 and 8
subparts A and E of part 164 of title 45, Code 9
of Federal Regulations (or successor regula-10
tions) (referred to in this paragraph as the 11
‘HIPAA privacy regulations’) and shall restrict 12
the use and disclosure of such information ac-13
cording to such privacy regulations and such 14
HIPAA privacy regulations. 15
‘‘(B) A
DDITIONAL REQUIREMENTS .— 16
‘‘(i) I
N GENERAL.—An entity pro-17
viding pharmacy benefit management serv-18
ices on behalf of a group health plan that 19
submits a report under paragraph (1) shall 20
ensure that such report contains only sum-21
mary health information, as defined in sec-22
tion 164.504(a) of title 45, Code of Fed-23
eral Regulations (or successor regulations). 24
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‘‘(ii) RESTRICTIONS.—In carrying out 1
this subsection, a group health plan shall 2
comply with section 164.504(f) of title 45, 3
Code of Federal Regulations (or a suc-4
cessor regulation), and a plan sponsor shall 5
act in accordance with the terms of the 6
agreement described in such section. 7
‘‘(C) R
ULE OF CONSTRUCTION .— 8
‘‘(i) Nothing in this section shall be 9
construed to modify the requirements for 10
the creation, receipt, maintenance, or 11
transmission of protected health informa-12
tion under the HIPAA privacy regulations. 13
‘‘(ii) Nothing in this section shall be 14
construed to affect the application of any 15
Federal or State privacy or civil rights law, 16
including the HIPAA privacy regulations, 17
the Genetic Information Nondiscrimination 18
Act of 2008 (Public Law 110–233) (in-19
cluding the amendments made by such 20
Act), the Americans with Disabilities Act 21
of 1990 (42 U.S.C. 12101 et sec), section 22
504 of the Rehabilitation Act of 1973 (29 23
U.S.C. 794), section 1557 of the Patient 24
Protection and Affordable Care Act (42 25
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•HR 2450 IH
U.S.C. 18116), title VI of the Civil Rights 1
Act of 1964 (42 U.S.C. 2000d), and title 2
VII of the Civil Rights Act of 1964 (42 3
U.S.C. 2000e). 4
‘‘(D) W
RITTEN NOTICE.—Each plan year, 5
group health plans shall provide to each partici-6
pant or beneficiary written notice informing the 7
participant or beneficiary of the requirement for 8
entities providing pharmacy benefit manage-9
ment services on behalf of the group health 10
plan to submit reports to group health plans 11
under paragraph (1), as applicable, which may 12
include incorporating such notification in plan 13
documents provided to the participant or bene-14
ficiary, or providing individual notification. 15
‘‘(E) L
IMITATION TO BUSINESS ASSOCI -16
ATES.—A group health plan receiving a report 17
under paragraph (1) may disclose such informa-18
tion only to the entity from which the report 19
was received or to that entity’s business associ-20
ates as defined in section 160.103 of title 45, 21
Code of Federal Regulations (or successor regu-22
lations) or as permitted by the HIPAA privacy 23
regulations. 24
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‘‘(F) CLARIFICATION REGARDING PUBLIC 1
DISCLOSURE OF INFORMATION .—Nothing in 2
this section shall prevent an entity providing 3
pharmacy benefit management services on be-4
half of a group health plan, from placing rea-5
sonable restrictions on the public disclosure of 6
the information contained in a report described 7
in paragraph (1), except that such plan or enti-8
ty may not— 9
‘‘(i) restrict disclosure of such report 10
to the Department of Health and Human 11
Services, the Department of Labor, or the 12
Department of the Treasury; or 13
‘‘(ii) prevent disclosure for the pur-14
poses of subsection (c), or any other public 15
disclosure requirement under this section. 16
‘‘(G) L
IMITED FORM OF REPORT .—The 17
Secretary shall define through rulemaking a 18
limited form of the report under paragraph (1) 19
required with respect to any group health plan 20
established by a plan sponsor that is, or is af-21
filiated with, a drug manufacturer, drug whole-22
saler, or other direct participant in the drug 23
supply chain, in order to prevent anti-competi-24
tive behavior. 25
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‘‘(5) STANDARD FORMAT AND REGULATIONS .— 1
‘‘(A) I
N GENERAL.—Not later than 18 2
months after the date of enactment of this sec-3
tion, the Secretary shall specify through rule-4
making a standard format for entities providing 5
pharmacy benefit management services on be-6
half of group health plans, to submit reports re-7
quired under paragraph (1). 8
‘‘(B) A
DDITIONAL REGULATIONS .—Not 9
later than 18 months after the date of enact-10
ment of this section, the Secretary shall, 11
through rulemaking, promulgate any other final 12
regulations necessary to implement the require-13
ments of this section. In promulgating such 14
regulations, the Secretary shall, to the extent 15
practicable, align the reporting requirements 16
under this section with the reporting require-17
ments under section 9825. 18
‘‘(c) R
EQUIREMENTTOPROVIDEINFORMATION TO 19
P
ARTICIPANTS ORBENEFICIARIES.—A group health plan, 20
upon request of a participant or beneficiary, shall provide 21
to such participant or beneficiary— 22
‘‘(1) the summary document described in sub-23
section (b)(2)(B)(ii); and 24
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‘‘(2) the information described in subsection 1
(b)(2)(A)(i)(III) with respect to a claim made by or 2
on behalf of such participant or beneficiary. 3
‘‘(d) R
ULE OFCONSTRUCTION.—Nothing in this sec-4
tion shall be construed to permit a health insurance issuer, 5
group health plan, entity providing pharmacy benefit man-6
agement services on behalf of a group health plan or 7
health insurance issuer, or other entity to restrict disclo-8
sure to, or otherwise limit the access of, the Secretary to 9
a report described in subsection (b)(1) or information re-10
lated to compliance with subsections (a), (b), or (c) of this 11
section or section 4980D(g) by such issuer, plan, or entity. 12
‘‘(e) D
EFINITIONS.—In this section: 13
‘‘(1) A
PPLICABLE ENTITY.—The term ‘applica-14
ble entity’ means— 15
‘‘(A) an applicable group purchasing orga-16
nization, drug manufacturer, distributor, whole-17
saler, rebate aggregator (or other purchasing 18
entity designed to aggregate rebates), or associ-19
ated third party; 20
‘‘(B) any subsidiary, parent, affiliate, or 21
subcontractor of a group health plan, health in-22
surance issuer, entity that provides pharmacy 23
benefit management services on behalf of such 24
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•HR 2450 IH
a plan or issuer, or any entity described in sub-1
paragraph (A); or 2
‘‘(C) such other entity as the Secretary 3
may specify through rulemaking. 4
‘‘(2) A
PPLICABLE GROUP PURCHASING ORGANI -5
ZATION.—The term ‘applicable group purchasing or-6
ganization’ means a group purchasing organization 7
that is affiliated with or under common ownership 8
with an entity providing pharmacy benefit manage-9
ment services. 10
‘‘(3) C
ONTRACTED COMPENSATION .—The term 11
‘contracted compensation’ means the sum of any in-12
gredient cost and dispensing fee for a drug (inclusive 13
of the out-of-pocket costs to the participant or bene-14
ficiary), or another analogous compensation struc-15
ture that the Secretary may specify through regula-16
tions. 17
‘‘(4) G
ROSS SPENDING .—The term ‘gross 18
spending’, with respect to prescription drug benefits 19
under a group health plan, means the amount spent 20
by a group health plan on prescription drug benefits, 21
calculated before the application of rebates, fees, al-22
ternative discounts, or other remuneration. 23
‘‘(5) N
ET SPENDING.—The term ‘net spending’, 24
with respect to prescription drug benefits under a 25
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•HR 2450 IH
group health plan, means the amount spent by a 1
group health plan on prescription drug benefits, cal-2
culated after the application of rebates, fees, alter-3
native discounts, or other remuneration. 4
‘‘(6) P
LAN SPONSOR.—The term ‘plan sponsor’ 5
has the meaning given such term in section 3(16)(B) 6
of the Employee Retirement Income Security Act of 7
1974 (29 U.S.C. 1002(16)(B)). 8
‘‘(7) R
EMUNERATION.—The term ‘remunera-9
tion’ has the meaning given such term by the Sec-10
retary, through rulemaking, which shall be reevalu-11
ated by the Secretary every 5 years. 12
‘‘(8) S
PECIFIED LARGE EMPLOYER .—The term 13
‘specified large employer’ means, in connection with 14
a group health plan established or maintained by a 15
single employer, with respect to a calendar year or 16
a plan year, as applicable, an employer who em-17
ployed an average of at least 100 employees on busi-18
ness days during the preceding calendar year or plan 19
year and who employs at least 1 employee on the 20
first day of the calendar year or plan year. 21
‘‘(9) S
PECIFIED LARGE PLAN.—The term ‘spec-22
ified large plan’ means a group health plan estab-23
lished or maintained by a plan sponsor described in 24
clause (ii) or (iii) of section 3(16)(B) of the Em-25
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•HR 2450 IH
ployee Retirement Income Security Act of 1974 (29 1
U.S.C. 1002(16)(B)) that had an average of at least 2
100 participants on business days during the pre-3
ceding calendar year or plan year, as applicable. 4
‘‘(10) W
HOLESALE ACQUISITION COST .—The 5
term ‘wholesale acquisition cost’ has the meaning 6
given such term in section 1847A(c)(6)(B) of the 7
Social Security Act (42 U.S.C. 1395w– 8
3a(c)(6)(B)).’’; 9
(2) E
XCEPTION FOR CERTAIN GROUP HEALTH 10
PLANS.—Section 9831(a)(2) of the Internal Revenue 11
Code of 1986 is amended by inserting ‘‘other than 12
with respect to section 9826,’’ before ‘‘any group 13
health plan’’. 14
(3) E
NFORCEMENT.—Section 4980D of the In-15
ternal Revenue Code of 1986 is amended by adding 16
at the end the following new subsection: 17
‘‘(g) A
PPLICATION TOREQUIREMENTSIMPOSED ON 18
C
ERTAINENTITIESPROVIDINGPHARMACYBENEFIT 19
M
ANAGEMENTSERVICES.—In the case of any requirement 20
under section 9826 that applies with respect to an entity 21
providing pharmacy benefit management services on be-22
half of a group health plan, any reference in this section 23
to such group health plan (and the reference in subsection 24
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(e)(1) to the employer) shall be treated as including a ref-1
erence to such entity.’’. 2
(4) C
LERICAL AMENDMENT .—The table of sec-3
tions for subchapter B of chapter 100 of the Inter-4
nal Revenue Code of 1986 is amended by adding at 5
the end the following new item: 6
‘‘Sec. 9826. Oversight of entities that provide pharmacy benefit management 
services.’’. 
Æ 
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