Us Congress 2025-2026 Regular Session

Us Congress Senate Bill SB882 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	II
2	2	119THCONGRESS
3	3	1
4	4	STSESSION S. 882
5	5	To amend title XVIII of the Social Security Act to assure pharmacy access
6	6	and choice for beneficiaries under prescription drug plans and MA–
7	7	PD plans and to establish requirements of pharmacy benefit managers
8	8	under Medicare part D.
9	9	IN THE SENATE OF THE UNITED STATES
10	10	MARCH6, 2025
11	11	Mrs. B
12	12	LACKBURN(for herself, Ms. HASSAN, Mr. LANKFORD, Mr. WARNER,
13	13	Mr. M
14	14	ARSHALL, and Mr. WELCH) introduced the following bill; which
15	15	was read twice and referred to the Committee on Finance
16	16	A BILL
17	17	To amend title XVIII of the Social Security Act to assure
18	18	pharmacy access and choice for beneficiaries under pre-
19	19	scription drug plans and MA–PD plans and to establish
20	20	requirements of pharmacy benefit managers under Medi-
21	21	care part D.
22	22	Be it enacted by the Senate and House of Representa-1
23	23	tives of the United States of America in Congress assembled, 2
24	24	SECTION 1. SHORT TITLE. 3
25	25	This Act may be cited as the ‘‘Patients Before Mid-4
26	26	dlemen Act’’. 5
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29	29	•S 882 IS
30	30	SEC. 2. ASSURING PHARMACY ACCESS AND CHOICE FOR 1
31	31	MEDICARE BENEFICIARIES. 2
32	32	(a) I
33	33	NGENERAL.—Section 1860D–4(b)(1) of the So-3
34	34	cial Security Act (42 U.S.C. 1395w–104(b)(1)) is amend-4
35	35	ed by striking subparagraph (A) and inserting the fol-5
36	36	lowing: 6
37	37	‘‘(A) I
38	38	N GENERAL.— 7
39	39	‘‘(i) P
40	40	ARTICIPATION OF ANY WILLING 8
41	41	PHARMACY.—A PDP sponsor offering a 9
42	42	prescription drug plan shall permit any 10
43	43	pharmacy that meets the standard contract 11
44	44	terms and conditions under such plan to 12
45	45	participate as a network pharmacy of such 13
46	46	plan. 14
47	47	‘‘(ii) C
48	48	ONTRACT TERMS AND CONDI -15
49	49	TIONS.— 16
50	50	‘‘(I) I
51	51	N GENERAL .—Notwith-17
52	52	standing any other provision of law, 18
53	53	for plan years beginning on or after 19
54	54	January 1, 2028, in accordance with 20
55	55	clause (i), contract terms and condi-21
56	56	tions offered by such PDP sponsor 22
57	57	shall be reasonable and relevant ac-23
58	58	cording to standards established by 24
59	59	the Secretary under subclause (II). 25
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63	63	‘‘(II) STANDARDS.—Not later 1
64	64	than the first Monday in April of 2
65	65	2027, the Secretary shall establish 3
66	66	standards for reasonable and relevant 4
67	67	contract terms and conditions for pur-5
68	68	poses of this clause. 6
69	69	‘‘(III) R
70	70	EQUEST FOR INFORMA -7
71	71	TION.—Not later than April 1, 2026, 8
72	72	for purposes of establishing the stand-9
73	73	ards under subclause (II), the Sec-10
74	74	retary shall issue a request for infor-11
75	75	mation to seek input on trends in pre-12
76	76	scription drug plan and network phar-13
77	77	macy contract terms and conditions, 14
78	78	current prescription drug plan and 15
79	79	network pharmacy contracting prac-16
80	80	tices, whether pharmacy reimburse-17
81	81	ment and dispensing fees paid by 18
82	82	PDP sponsors to network pharmacies 19
83	83	sufficiently cover the ingredient and 20
84	84	operational costs of such pharmacies, 21
85	85	the use and application of pharmacy 22
86	86	quality measures by PDP sponsors for 23
87	87	network pharmacies, PDP sponsor re-24
88	88	strictions or limitations on the dis-25
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91	91	•S 882 IS
92	92	pensing of covered part D drugs by 1
93	93	network pharmacies (or any subsets of 2
94	94	such pharmacies), PDP sponsor au-3
95	95	diting practices for network phar-4
96	96	macies, areas in current regulations or 5
97	97	program guidance related to con-6
98	98	tracting between prescription drug 7
99	99	plans and network pharmacies requir-8
100	100	ing clarification or additional speci-9
101	101	ficity, factors for consideration in de-10
102	102	termining the reasonableness and rel-11
103	103	evance of contract terms and condi-12
104	104	tions between prescription drug plans 13
105	105	and network pharmacies, and other 14
106	106	issues as determined appropriate by 15
107	107	the Secretary.’’. 16
108	108	(b) E
109	109	SSENTIALRETAILPHARMACIES.—Section 17
110	110	1860D–42 of the Social Security Act (42 U.S.C. 1395w– 18
111	111	152) is amended by adding at the end the following new 19
112	112	subsection: 20
113	113	‘‘(e) E
114	114	SSENTIALRETAILPHARMACIES.— 21
115	115	‘‘(1) I
116	116	N GENERAL.—With respect to plan years 22
117	117	beginning on or after January 1, 2028, the Sec-23
118	118	retary shall publish reports, at least once every 2 24
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121	121	•S 882 IS
122	122	years until 2034, and periodically thereafter, that 1
123	123	provide information, to the extent feasible, on— 2
124	124	‘‘(A) trends in ingredient cost reimburse-3
125	125	ment, dispensing fees, incentive payments and 4
126	126	other fees paid by PDP sponsors offering pre-5
127	127	scription drug plans and MA organizations of-6
128	128	fering MA–PD plans under this part to essen-7
129	129	tial retail pharmacies (as defined in paragraph 8
130	130	(2)) with respect to the dispensing of covered 9
131	131	part D drugs, including a comparison of such 10
132	132	trends between essential retail pharmacies and 11
133	133	pharmacies that are not essential retail phar-12
134	134	macies; 13
135	135	‘‘(B) trends in amounts paid to PDP spon-14
136	136	sors offering prescription drug plans and MA 15
137	137	organizations offering MA–PD plans under this 16
138	138	part by essential retail pharmacies with respect 17
139	139	to the dispensing of covered part D drugs, in-18
140	140	cluding a comparison of such trends between 19
141	141	essential retail pharmacies and pharmacies that 20
142	142	are not essential retail pharmacies; 21
143	143	‘‘(C) trends in essential retail pharmacy 22
144	144	participation in pharmacy networks and pre-23
145	145	ferred pharmacy networks for prescription drug 24
146	146	plans offered by PDP sponsors and MA–PD 25
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150	150	plans offered by MA organizations under this 1
151	151	part, including a comparison of such trends be-2
152	152	tween essential retail pharmacies and phar-3
153	153	macies that are not essential retail pharmacies; 4
154	154	‘‘(D) trends in the number of essential re-5
155	155	tail pharmacies, including variation in such 6
156	156	trends by geographic region or other factors; 7
157	157	‘‘(E) a comparison of cost-sharing for cov-8
158	158	ered part D drugs dispensed by essential retail 9
159	159	pharmacies that are network pharmacies for 10
160	160	prescription drug plans offered by PDP spon-11
161	161	sors and MA–PD plans offered by MA organi-12
162	162	zations under this part and cost-sharing for 13
163	163	covered part D drugs dispensed by other net-14
164	164	work pharmacies for such plans located in simi-15
165	165	lar geographic areas that are not essential retail 16
166	166	pharmacies; 17
167	167	‘‘(F) a comparison of the volume of cov-18
168	168	ered part D drugs dispensed by essential retail 19
169	169	pharmacies that are network pharmacies for 20
170	170	prescription drug plans offered by PDP spon-21
171	171	sors and MA–PD plans offered by MA organi-22
172	172	zations under this part and such volume of dis-23
173	173	pensing by network pharmacies for such plans 24
174	174	located in similar geographic areas that are not 25
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177	177	•S 882 IS
178	178	essential retail pharmacies, including informa-1
179	179	tion on any patterns or trends in such compari-2
180	180	son specific to certain types of covered part D 3
181	181	drugs, such as generic drugs or drugs specified 4
182	182	as specialty drugs by a PDP sponsor under a 5
183	183	prescription drug plan or an MA organization 6
184	184	under an MA–PD plan; and 7
185	185	‘‘(G) a comparison of the information de-8
186	186	scribed in subparagraphs (A) through (F) be-9
187	187	tween essential retail pharmacies that are net-10
188	188	work pharmacies for prescription drug plans of-11
189	189	fered by PDP sponsors under this part and es-12
190	190	sential retail pharmacies that are network phar-13
191	191	macies for MA–PD plans offered by MA organi-14
192	192	zations under this part. 15
193	193	‘‘(2) D
194	194	EFINITION OF ESSENTIAL RETAIL PHAR -16
195	195	MACY.—In this subsection, the term ‘essential retail 17
196	196	pharmacy’ means, with respect to a plan year, a re-18
197	197	tail pharmacy that— 19
198	198	‘‘(A) is not a pharmacy that is an affiliate 20
199	199	as defined in paragraph (4); and 21
200	200	‘‘(B) is located in— 22
201	201	‘‘(i) a medically underserved area (as 23
202	202	designated pursuant to section 24
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205	205	•S 882 IS
206	206	330(b)(3)(A) of the Public Health Service 1
207	207	Act); 2
208	208	‘‘(ii) a rural area in which there is no 3
209	209	other retail pharmacy within 10 miles, as 4
210	210	determined by the Secretary; 5
211	211	‘‘(iii) a suburban area in which there 6
212	212	is no other retail pharmacy within 2 miles, 7
213	213	as determined by the Secretary; or 8
214	214	‘‘(iv) an urban area in which there is 9
215	215	no other retail pharmacy within 1 mile, as 10
216	216	determined by the Secretary. 11
217	217	‘‘(3) L
218	218	IST OF ESSENTIAL RETAIL PHAR -12
219	219	MACIES.— 13
220	220	‘‘(A) P
221	221	UBLICATION OF LIST OF ESSENTIAL 14
222	222	RETAIL PHARMACIES.—For each plan year (be-15
223	223	ginning with plan year 2028), the Secretary 16
224	224	shall publish, on a publicly available internet 17
225	225	website of the Centers for Medicare & Medicaid 18
226	226	Services, a list of pharmacies that meet the cri-19
227	227	teria described in subparagraphs (A) and (B) of 20
228	228	paragraph (2) to be considered an essential re-21
229	229	tail pharmacy. 22
230	230	‘‘(B) R
231	231	EQUIRED SUBMISSIONS FROM PDP 23
232	232	SPONSORS.—For each plan year (beginning 24
233	233	with plan year 2028), each PDP sponsor offer-25
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236	236	•S 882 IS
237	237	ing a prescription drug plan and each MA orga-1
238	238	nization offering an MA–PD plan shall submit 2
239	239	to the Secretary, for the purposes of deter-3
240	240	mining retail pharmacies that meet the criterion 4
241	241	specified in subparagraph (A) of paragraph (2), 5
242	242	a list of retail pharmacies that are affiliates of 6
243	243	such sponsor or organization, or are affiliates of 7
244	244	a pharmacy benefit manager acting on behalf of 8
245	245	such sponsor or organization, at a time, and in 9
246	246	a form and manner, specified by the Secretary. 10
247	247	‘‘(C) R
248	248	EPORTING BY PDP SPONSORS AND 11
249	249	MA ORGANIZATIONS.—For each plan year be-12
250	250	ginning with plan year 2027, each PDP sponsor 13
251	251	offering a prescription drug plan and each MA 14
252	252	organization offering an MA–PD plan under 15
253	253	this part shall submit to the Secretary informa-16
254	254	tion on incentive payments and other fees paid 17
255	255	by such sponsor or organization to pharmacies, 18
256	256	insofar as any such payments or fees are not 19
257	257	otherwise reported, at a time, and in a form 20
258	258	and manner, specified by the Secretary. 21
259	259	‘‘(D) I
260	260	MPLEMENTATION.—Notwithstanding 22
261	261	any other provision of law, the Secretary may 23
262	262	implement this paragraph by program instruc-24
263	263	tion or otherwise. 25
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267	267	‘‘(E) NONAPPLICATION OF PAPERWORK 1
268	268	REDUCTION ACT .—Chapter 35 of title 44, 2
269	269	United States Code, shall not apply to the im-3
270	270	plementation of this paragraph. 4
271	271	‘‘(4) D
272	272	EFINITION OF AFFILIATE.—In this sub-5
273	273	section, the term ‘affiliate’ means any entity that is 6
274	274	owned by, controlled by, or related under a common 7
275	275	ownership structure with a pharmacy benefit man-8
276	276	ager or a managed care entity or other specified en-9
277	277	tity (as such terms are defined in section 10
278	278	1903(m)(9)(D)).’’. 11
279	279	(c) E
280	280	NFORCEMENT.— 12
281	281	(1) I
282	282	N GENERAL.—Section 1860D–4(b)(1) of 13
283	283	the Social Security Act (42 U.S.C. 1395w– 14
284	284	104(b)(1)) is amended by adding at the end the fol-15
285	285	lowing new subparagraph: 16
286	286	‘‘(F) E
287	287	NFORCEMENT OF STANDARDS FOR 17
288	288	REASONABLE AND RELEVANT CONTRACT TERMS 18
289	289	AND CONDITIONS.— 19
290	290	‘‘(i) A
291	291	LLEGATION SUBMISSION PROC -20
292	292	ESS.— 21
293	293	‘‘(I) I
294	294	N GENERAL.—Not later 22
295	295	than January 1, 2028, the Secretary 23
296	296	shall establish a process through 24
297	297	which a pharmacy may submit to the 25
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300	300	•S 882 IS
301	301	Secretary an allegation of a violation 1
302	302	by a PDP sponsor offering a prescrip-2
303	303	tion drug plan of the standards for 3
304	304	reasonable and relevant contract 4
305	305	terms and conditions under subpara-5
306	306	graph (A)(ii), or of subclause (VIII) 6
307	307	of this clause. 7
308	308	‘‘(II) F
309	309	REQUENCY OF SUBMIS -8
310	310	SION.— 9
311	311	‘‘(aa) I
312	312	N GENERAL.—Except 10
313	313	as provided in item (bb), the alle-11
314	314	gation submission process under 12
315	315	this clause shall allow pharmacies 13
316	316	to submit any allegations of vio-14
317	317	lations described in subclause (I) 15
318	318	not more frequently than once 16
319	319	per plan year per contract be-17
320	320	tween a pharmacy and a PDP 18
321	321	sponsor. 19
322	322	‘‘(bb) A
323	323	LLEGATIONS RELAT-20
324	324	ING TO CONTRACT MODIFICA -21
325	325	TIONS.—In the case where a con-22
326	326	tract between a pharmacy and a 23
327	327	PDP sponsor is modified fol-24
328	328	lowing the submission of allega-25
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331	331	•S 882 IS
332	332	tions by a pharmacy with respect 1
333	333	to such contract and plan year, 2
334	334	the allegation submission process 3
335	335	under this clause shall allow such 4
336	336	pharmacy to submit an additional 5
337	337	allegation related to those modi-6
338	338	fications with respect to such 7
339	339	contract and plan year. 8
340	340	‘‘(III) A
341	341	CCESS TO RELEVANT 9
342	342	DOCUMENTS AND MATERIALS .—A 10
343	343	PDP sponsor subject to an allegation 11
344	344	under this clause— 12
345	345	‘‘(aa) shall provide docu-13
346	346	ments or materials, as specified 14
347	347	by the Secretary, including con-15
348	348	tract offers made by such spon-16
349	349	sor to such pharmacy or cor-17
350	350	respondence related to such of-18
351	351	fers, to the Secretary at a time, 19
352	352	and in a form and manner, speci-20
353	353	fied by the Secretary; and 21
354	354	‘‘(bb) shall not prohibit or 22
355	355	otherwise limit the ability of a 23
356	356	pharmacy to submit such docu-24
357	357	ments or materials to the Sec-25
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360	360	•S 882 IS
361	361	retary for the purpose of submit-1
362	362	ting an allegation or providing 2
363	363	evidence for such an allegation 3
364	364	under this clause. 4
365	365	‘‘(IV) S
366	366	TANDARDIZED TEM -5
367	367	PLATE.—The Secretary shall establish 6
368	368	a standardized template for phar-7
369	369	macies to use for the submission of al-8
370	370	legations described in subclause (I). 9
371	371	Such template shall require that the 10
372	372	submission include a certification by 11
373	373	the pharmacy that the information in-12
374	374	cluded is accurate, complete, and true 13
375	375	to the best of the knowledge, informa-14
376	376	tion, and belief of such pharmacy. 15
377	377	‘‘(V) P
378	378	REVENTING FRIVOLOUS 16
379	379	ALLEGATIONS.—In the case where the 17
380	380	Secretary determines that a pharmacy 18
381	381	has submitted frivolous allegations 19
382	382	under this clause on a routine basis, 20
383	383	the Secretary may temporarily pro-21
384	384	hibit such pharmacy from using the 22
385	385	allegation submission process under 23
386	386	this clause, as determined appropriate 24
387	387	by the Secretary. 25
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391	391	‘‘(VI) EXEMPTION FROM FREE -1
392	392	DOM OF INFORMATION ACT .—Allega-2
393	393	tions submitted under this clause shall 3
394	394	be exempt from disclosure under sec-4
395	395	tion 552 of title 5, United States 5
396	396	Code. 6
397	397	‘‘(VII) R
398	398	ULE OF CONSTRUC -7
399	399	TION.—Nothing in this clause shall be 8
400	400	construed as limiting the ability of a 9
401	401	pharmacy to pursue other legal ac-10
402	402	tions or remedies, consistent with ap-11
403	403	plicable Federal or State law, with re-12
404	404	spect to a potential violation of a re-13
405	405	quirement described in this subpara-14
406	406	graph. 15
407	407	‘‘(VIII) A
408	408	NTI-RETALIATION AND 16
409	409	ANTI-COERCION.—Consistent with ap-17
410	410	plicable Federal or State law, a PDP 18
411	411	sponsor shall not— 19
412	412	‘‘(aa) retaliate against a 20
413	413	pharmacy for submitting any al-21
414	414	legations under this clause; or 22
415	415	‘‘(bb) coerce, intimidate, 23
416	416	threaten, or interfere with the 24
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419	419	•S 882 IS
420	420	ability of a pharmacy to submit 1
421	421	any such allegations. 2
422	422	‘‘(ii) I
423	423	NVESTIGATION.—The Secretary 3
424	424	shall investigate, as determined appro-4
425	425	priate by the Secretary, allegations sub-5
426	426	mitted pursuant to clause (i). 6
427	427	‘‘(iii) E
428	428	NFORCEMENT.— 7
429	429	‘‘(I) I
430	430	N GENERAL.—In the case 8
431	431	where the Secretary determines that a 9
432	432	PDP sponsor offering a prescription 10
433	433	drug plan has violated the standards 11
434	434	for reasonable and relevant contract 12
435	435	terms and conditions under subpara-13
436	436	graph (A)(ii), the Secretary may use 14
437	437	authorities under sections 1857(g) 15
438	438	and 1860D–12(b)(3)(E) to impose 16
439	439	civil monetary penalties or other inter-17
440	440	mediate sanctions. 18
441	441	‘‘(II) A
442	442	PPLICATION OF CIVIL 19
443	443	MONETARY PENALTIES .—The provi-20
444	444	sions of section 1128A (other than 21
445	445	subsections (a) and (b)) shall apply to 22
446	446	a civil monetary penalty under this 23
447	447	clause in the same manner as such 24
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450	450	•S 882 IS
451	451	provisions apply to a penalty or pro-1
452	452	ceeding under section 1128A(a).’’. 2
453	453	(2) C
454	454	ONFORMING AMENDMENT .—Section 3
455	455	1857(g)(1) of the Social Security Act (42 U.S.C. 4
456	456	1395w–27(g)(1)) is amended— 5
457	457	(A) in subparagraph (J), by striking ‘‘or’’ 6
458	458	after the semicolon; 7
459	459	(B) by redesignating subparagraph (K) as 8
460	460	subparagraph (L); 9
461	461	(C) by inserting after subparagraph (J), 10
462	462	the following new subparagraph: 11
463	463	‘‘(K) fails to comply with the standards for 12
464	464	reasonable and relevant contract terms and con-13
465	465	ditions under subparagraph (A)(ii) of section 14
466	466	1860D–4(b)(1); or’’; 15
467	467	(D) in subparagraph (L), as redesignated 16
468	468	by subparagraph (B), by striking ‘‘through (J)’’ 17
469	469	and inserting ‘‘through (K)’’; and 18
470	470	(E) in the flush matter following subpara-19
471	471	graph (L), as so redesignated, by striking ‘‘sub-20
472	472	paragraphs (A) through (K)’’ and inserting 21
473	473	‘‘subparagraphs (A) through (L)’’. 22
474	474	(d) A
475	475	CCOUNTABILITY OF PHARMACYBENEFITMAN-23
476	476	AGERS FORVIOLATIONS OFREASONABLE ANDRELEVANT 24
477	477	C
478	478	ONTRACTTERMS ANDCONDITIONS.— 25
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481	481	•S 882 IS
482	482	(1) IN GENERAL.—Section 1860D–12(b) of the 1
483	483	Social Security Act (42 U.S.C. 1395w–112) is 2
484	484	amended by adding at the end the following new 3
485	485	paragraph: 4
486	486	‘‘(9) A
487	487	CCOUNTABILITY OF PHARMACY BENEFIT 5
488	488	MANAGERS FOR VIOLATIONS OF REASONABLE AND 6
489	489	RELEVANT CONTRACT TERMS AND CONDITIONS .— 7
490	490	For plan years beginning on or after January 1, 8
491	491	2028, each contract entered into with a PDP spon-9
492	492	sor under this part with respect to a prescription 10
493	493	drug plan offered by such sponsor shall provide that 11
494	494	any pharmacy benefit manager acting on behalf of 12
495	495	such sponsor has a written agreement with the PDP 13
496	496	sponsor under which the pharmacy benefit manager 14
497	497	agrees to reimburse the PDP sponsor for any 15
498	498	amounts paid by such sponsor under section 1860D– 16
499	499	4(b)(1)(F)(iii)(I) to the Secretary as a result of a 17
500	500	violation described in such section if such violation 18
501	501	is related to a responsibility delegated to the phar-19
502	502	macy benefit manager by such PDP sponsor.’’. 20
503	503	(2) MA–PD
504	504	PLANS.—Section 1857(f)(3) of the 21
505	505	Social Security Act (42 U.S.C. 1395w–27(f)(3)) is 22
506	506	amended by adding at the end the following new 23
507	507	subparagraph: 24
508	508	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
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510	510	•S 882 IS
511	511	‘‘(F) ACCOUNTABILITY OF PHARMACY 1
512	512	BENEFIT MANAGERS FOR VIOLATIONS OF REA -2
513	513	SONABLE AND RELEVANT CONTRACT TERMS .— 3
514	514	For plan years beginning on or after January 4
515	515	1, 2028, section 1860D–12(b)(9).’’. 5
516	516	(e) B
517	517	IENNIALREPORT ON ENFORCEMENT AND 6
518	518	O
519	519	VERSIGHT OF PHARMACYACCESSREQUIREMENTS.— 7
520	520	Section 1860D–42 of the Social Security Act (42 U.S.C. 8
521	521	1395w–152), as amended by subsection (b), is amended 9
522	522	by adding at the end the following new subsection: 10
523	523	‘‘(f) B
524	524	IENNIALREPORT ON ENFORCEMENT AND 11
525	525	O
526	526	VERSIGHT OFPHARMACYACCESSREQUIREMENTS.— 12
527	527	‘‘(1) I
528	528	N GENERAL.—Not later than 2 years 13
529	529	after the date of enactment of this subsection, and 14
530	530	at least once every 2 years thereafter, the Secretary 15
531	531	shall publish a report on enforcement and oversight 16
532	532	actions and activities undertaken by the Secretary 17
533	533	with respect to the requirements under section 18
534	534	1860D–4(b)(1). 19
535	535	‘‘(2) L
536	536	IMITATION.—A report under paragraph 20
537	537	(1) shall not disclose— 21
538	538	‘‘(A) identifiable information about individ-22
539	539	uals or entities unless such information is oth-23
540	540	erwise publicly available; or 24
541	541	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
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543	543	•S 882 IS
544	544	‘‘(B) trade secrets with respect to any enti-1
545	545	ties.’’. 2
546	546	SEC. 3. REQUIREMENTS OF PHARMACY BENEFIT MAN-3
547	547	AGERS UNDER MEDICARE PART D. 4
548	548	(a) P
549	549	RESCRIPTIONDRUGPLANS.—Section 1860D– 5
550	550	12 of the Social Security Act (42 U.S.C. 1395w–112) is 6
551	551	amended by adding at the end the following new sub-7
552	552	section: 8
553	553	‘‘(h) R
554	554	EQUIREMENTSRELATING TOPHARMACYBEN-9
555	555	EFITMANAGERS.—For plan years beginning on or after 10
556	556	January 1, 2028: 11
557	557	‘‘(1) A
558	558	GREEMENTS WITH PHARMACY BENEFIT 12
559	559	MANAGERS.—Each contract entered into with a 13
560	560	PDP sponsor under this part with respect to a pre-14
561	561	scription drug plan offered by such sponsor shall 15
562	562	provide that any pharmacy benefit manager acting 16
563	563	on behalf of such sponsor has a written agreement 17
564	564	with the PDP sponsor under which the pharmacy 18
565	565	benefit manager, and any affiliates of such phar-19
566	566	macy benefit manager, as applicable, agree to meet 20
567	567	the following requirements: 21
568	568	‘‘(A) N
569	569	O INCOME OTHER THAN BONA FIDE 22
570	570	SERVICE FEES.— 23
571	571	‘‘(i) I
572	572	N GENERAL.—The pharmacy 24
573	573	benefit manager and any affiliate of such 25
574	574	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
575	575	kjohnson on DSK7ZCZBW3PROD with $$_JOB 20
576	576	•S 882 IS
577	577	pharmacy benefit manager shall not derive 1
578	578	any remuneration with respect to any serv-2
579	579	ices provided on behalf of any entity or in-3
580	580	dividual, in connection with the utilization 4
581	581	of covered part D drugs, from any such en-5
582	582	tity or individual other than bona fide serv-6
583	583	ice fees, subject to clauses (ii) and (iii). 7
584	584	‘‘(ii) I
585	585	NCENTIVE PAYMENTS .—For the 8
586	586	purposes of this subsection, an incentive 9
587	587	payment (as determined by the Secretary) 10
588	588	paid by a PDP sponsor to a pharmacy 11
589	589	benefit manager that is performing serv-12
590	590	ices on behalf of such sponsor shall be 13
591	591	deemed a ‘bona fide service fee’ (even if 14
592	592	such payment does not otherwise meet the 15
593	593	definition of such term under paragraph 16
594	594	(7)(B)) if such payment is a flat dollar 17
595	595	amount, is consistent with fair market 18
596	596	value (as specified by the Secretary), is re-19
597	597	lated to services actually performed by the 20
598	598	pharmacy benefit manager or affiliate of 21
599	599	such pharmacy benefit manager, on behalf 22
600	600	of the PDP sponsor making such payment, 23
601	601	in connection with the utilization of cov-24
602	602	ered part D drugs, and meets additional 25
603	603	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
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605	605	•S 882 IS
606	606	requirements, if any, as determined appro-1
607	607	priate by the Secretary. 2
608	608	‘‘(iii) C
609	609	LARIFICATION ON REBATES 3
610	610	AND DISCOUNTS USED TO LOWER COSTS 4
611	611	FOR COVERED PART D DRUGS .—Rebates, 5
612	612	discounts, and other price concessions re-6
613	613	ceived by a pharmacy benefit manager or 7
614	614	an affiliate of a pharmacy benefit manager 8
615	615	from manufacturers, even if such price 9
616	616	concessions are calculated as a percentage 10
617	617	of a drug’s price, shall not be considered a 11
618	618	violation of the requirements of clause (i) 12
619	619	if they are fully passed through to a PDP 13
620	620	sponsor and are compliant with all regu-14
621	621	latory and subregulatory requirements re-15
622	622	lated to direct and indirect remuneration 16
623	623	for manufacturer rebates under this part, 17
624	624	including in cases where a PDP sponsor is 18
625	625	acting as a pharmacy benefit manager on 19
626	626	behalf of a prescription drug plan offered 20
627	627	by such PDP sponsor. 21
628	628	‘‘(iv) E
629	629	VALUATION OF REMUNERATION 22
630	630	ARRANGEMENTS.—Components of subsets 23
631	631	of remuneration arrangements (such as 24
632	632	fees or other forms of compensation paid 25
633	633	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
634	634	kjohnson on DSK7ZCZBW3PROD with $$_JOB 22
635	635	•S 882 IS
636	636	to or retained by the pharmacy benefit 1
637	637	manager or affiliate of such pharmacy ben-2
638	638	efit manager), as determined appropriate 3
639	639	by the Secretary, between pharmacy ben-4
640	640	efit managers or affiliates of such phar-5
641	641	macy benefit managers, as applicable, and 6
642	642	other entities involved in the dispensing or 7
643	643	utilization of covered part D drugs (includ-8
644	644	ing PDP sponsors, manufacturers, phar-9
645	645	macies, and other entities as determined 10
646	646	appropriate by the Secretary) shall be sub-11
647	647	ject to review by the Secretary, in con-12
648	648	sultation with the Office of the Inspector 13
649	649	General of the Department of Health and 14
650	650	Human Services, as determined appro-15
651	651	priate by the Secretary. The Secretary, in 16
652	652	consultation with the Office of the Inspec-17
653	653	tor General, shall review whether remu-18
654	654	neration under such arrangements is con-19
655	655	sistent with fair market value (as specified 20
656	656	by the Secretary) through reviews and as-21
657	657	sessments of such remuneration, as deter-22
658	658	mined appropriate. 23
659	659	‘‘(v) D
660	660	ISGORGEMENT.—The pharmacy 24
661	661	benefit manager shall disgorge any remu-25
662	662	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
663	663	kjohnson on DSK7ZCZBW3PROD with $$_JOB 23
664	664	•S 882 IS
665	665	neration paid to such pharmacy benefit 1
666	666	manager or an affiliate of such pharmacy 2
667	667	benefit manager in violation of this sub-3
668	668	paragraph to the PDP sponsor. 4
669	669	‘‘(vi) A
670	670	DDITIONAL REQUIREMENTS .— 5
671	671	The pharmacy benefit manager shall— 6
672	672	‘‘(I) enter into a written agree-7
673	673	ment with any affiliate of such phar-8
674	674	macy benefit manager, under which 9
675	675	the affiliate shall identify and disgorge 10
676	676	any remuneration described in clause 11
677	677	(v) to the pharmacy benefit manager; 12
678	678	and 13
679	679	‘‘(II) attest, subject to any re-14
680	680	quirements determined appropriate by 15
681	681	the Secretary, that the pharmacy ben-16
682	682	efit manager has entered into a writ-17
683	683	ten agreement described in subclause 18
684	684	(I) with any relevant affiliate of the 19
685	685	pharmacy benefit manager. 20
686	686	‘‘(B) T
687	687	RANSPARENCY REGARDING GUARAN -21
688	688	TEES AND COST PERFORMANCE EVALUA -22
689	689	TIONS.—The pharmacy benefit manager shall— 23
690	690	‘‘(i) define, interpret, and apply, in a 24
691	691	fully transparent and consistent manner 25
692	692	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
693	693	kjohnson on DSK7ZCZBW3PROD with $$_JOB 24
694	694	•S 882 IS
695	695	for purposes of calculating or otherwise 1
696	696	evaluating pharmacy benefit manager per-2
697	697	formance against pricing guarantees or 3
698	698	similar cost performance measurements re-4
699	699	lated to rebates, discounts, price conces-5
700	700	sions, or net costs, terms such as— 6
701	701	‘‘(I) ‘generic drug’, in a manner 7
702	702	consistent with the definition of the 8
703	703	term under section 423.4 of title 42, 9
704	704	Code of Federal Regulations, or a suc-10
705	705	cessor regulation; 11
706	706	‘‘(II) ‘brand name drug’, in a 12
707	707	manner consistent with the definition 13
708	708	of the term under section 423.4 of 14
709	709	title 42, Code of Federal Regulations, 15
710	710	or a successor regulation; 16
711	711	‘‘(III) ‘specialty drug’; 17
712	712	‘‘(IV) ‘rebate’; and 18
713	713	‘‘(V) ‘discount’; 19
714	714	‘‘(ii) identify any drugs, claims, or 20
715	715	price concessions excluded from any pric-21
716	716	ing guarantee or other cost performance 22
717	717	measure in a clear and consistent manner; 23
718	718	and 24
719	719	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
720	720	kjohnson on DSK7ZCZBW3PROD with $$_JOB 25
721	721	•S 882 IS
722	722	‘‘(iii) where a pricing guarantee or 1
723	723	other cost performance measure is based 2
724	724	on a pricing benchmark other than the 3
725	725	wholesale acquisition cost (as defined in 4
726	726	section 1847A(c)(6)(B)) of a drug, cal-5
727	727	culate and provide a wholesale acquisition 6
728	728	cost-based equivalent to the pricing guar-7
729	729	antee or other cost performance measure. 8
730	730	‘‘(C) P
731	731	ROVISION OF INFORMATION .— 9
732	732	‘‘(i) I
733	733	N GENERAL.—Not later than 10
734	734	July 1 of each year, beginning in 2028, the 11
735	735	pharmacy benefit manager shall submit to 12
736	736	the PDP sponsor, and to the Secretary, a 13
737	737	report, in accordance with this subpara-14
738	738	graph, and shall make such report avail-15
739	739	able to such sponsor at no cost to such 16
740	740	sponsor in a format specified by the Sec-17
741	741	retary under paragraph (5). Each such re-18
742	742	port shall include, with respect to such 19
743	743	PDP sponsor and each plan offered by 20
744	744	such sponsor, the following information 21
745	745	with respect to the previous plan year: 22
746	746	‘‘(I) A list of all drugs covered by 23
747	747	the plan that were dispensed includ-24
748	748	ing, with respect to each such drug— 25
749	749	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
750	750	kjohnson on DSK7ZCZBW3PROD with $$_JOB 26
751	751	•S 882 IS
752	752	‘‘(aa) the brand name, ge-1
753	753	neric or non-proprietary name, 2
754	754	and National Drug Code; 3
755	755	‘‘(bb) the number of plan 4
756	756	enrollees for whom the drug was 5
757	757	dispensed, the total number of 6
758	758	prescription claims for the drug 7
759	759	(including original prescriptions 8
760	760	and refills, counted as separate 9
761	761	claims), and the total number of 10
762	762	dosage units of the drug dis-11
763	763	pensed; 12
764	764	‘‘(cc) the number of pre-13
765	765	scription claims described in item 14
766	766	(bb) by each type of dispensing 15
767	767	channel through which the drug 16
768	768	was dispensed, including retail, 17
769	769	mail order, specialty pharmacy, 18
770	770	long term care pharmacy, home 19
771	771	infusion pharmacy, or other types 20
772	772	of pharmacies or providers; 21
773	773	‘‘(dd) the average wholesale 22
774	774	acquisition cost, listed as cost per 23
775	775	day’s supply, cost per dosage 24
776	776	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
777	777	kjohnson on DSK7ZCZBW3PROD with $$_JOB 27
778	778	•S 882 IS
779	779	unit, and cost per typical course 1
780	780	of treatment (as applicable); 2
781	781	‘‘(ee) the average wholesale 3
782	782	price for the drug, listed as price 4
783	783	per day’s supply, price per dos-5
784	784	age unit, and price per typical 6
785	785	course of treatment (as applica-7
786	786	ble); 8
787	787	‘‘(ff) the total out-of-pocket 9
788	788	spending by plan enrollees on 10
789	789	such drug after application of 11
790	790	any benefits under the plan, in-12
791	791	cluding plan enrollee spending 13
792	792	through copayments, coinsurance, 14
793	793	and deductibles; 15
794	794	‘‘(gg) total rebates paid by 16
795	795	the manufacturer on the drug as 17
796	796	reported under the Detailed DIR 18
797	797	Report (or any successor report) 19
798	798	submitted by such sponsor to the 20
799	799	Centers for Medicare & Medicaid 21
800	800	Services; 22
801	801	‘‘(hh) all other direct or in-23
802	802	direct remuneration on the drug 24
803	803	as reported under the Detailed 25
804	804	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
805	805	kjohnson on DSK7ZCZBW3PROD with $$_JOB 28
806	806	•S 882 IS
807	807	DIR Report (or any successor re-1
808	808	port) submitted by such sponsor 2
809	809	to the Centers for Medicare & 3
810	810	Medicaid Services; 4
811	811	‘‘(ii) the average pharmacy 5
812	812	reimbursement amount paid by 6
813	813	the plan for the drug in the ag-7
814	814	gregate and disaggregated by dis-8
815	815	pensing channel identified in item 9
816	816	(cc); 10
817	817	‘‘(jj) the average National 11
818	818	Average Drug Acquisition Cost 12
819	819	(NADAC); and 13
820	820	‘‘(kk) total manufacturer-de-14
821	821	rived revenue, inclusive of bona 15
822	822	fide service fees, attributable to 16
823	823	the drug and retained by the 17
824	824	pharmacy benefit manager and 18
825	825	any affiliate of such pharmacy 19
826	826	benefit manager. 20
827	827	‘‘(II) In the case of a pharmacy 21
828	828	benefit manager that has an affiliate 22
829	829	that is a retail, mail order, or spe-23
830	830	cialty pharmacy, with respect to drugs 24
831	831	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
832	832	kjohnson on DSK7ZCZBW3PROD with $$_JOB 29
833	833	•S 882 IS
834	834	covered by such plan that were dis-1
835	835	pensed, the following information: 2
836	836	‘‘(aa) The percentage of 3
837	837	total prescriptions that were dis-4
838	838	pensed by pharmacies that are an 5
839	839	affiliate of the pharmacy benefit 6
840	840	manager for each drug. 7
841	841	‘‘(bb) The interquartile 8
842	842	range of the total combined costs 9
843	843	paid by the plan and plan enroll-10
844	844	ees, per dosage unit, per course 11
845	845	of treatment, per 30-day supply, 12
846	846	and per 90-day supply for each 13
847	847	drug dispensed by pharmacies 14
848	848	that are not an affiliate of the 15
849	849	pharmacy benefit manager and 16
850	850	that are included in the phar-17
851	851	macy network of such plan. 18
852	852	‘‘(cc) The interquartile 19
853	853	range of the total combined costs 20
854	854	paid by the plan and plan enroll-21
855	855	ees, per dosage unit, per course 22
856	856	of treatment, per 30-day supply, 23
857	857	and per 90-day supply for each 24
858	858	drug dispensed by pharmacies 25
859	859	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
860	860	kjohnson on DSK7ZCZBW3PROD with $$_JOB 30
861	861	•S 882 IS
862	862	that are an affiliate of the phar-1
863	863	macy benefit manager and that 2
864	864	are included in the pharmacy 3
865	865	network of such plan. 4
866	866	‘‘(dd) The lowest total com-5
867	867	bined cost paid by the plan and 6
868	868	plan enrollees, per dosage unit, 7
869	869	per course of treatment, per 30- 8
870	870	day supply, and per 90-day sup-9
871	871	ply, for each drug that is avail-10
872	872	able from any pharmacy included 11
873	873	in the pharmacy network of such 12
874	874	plan. 13
875	875	‘‘(ee) The difference between 14
876	876	the average acquisition cost of 15
877	877	the affiliate, such as a pharmacy 16
878	878	or other entity that acquires pre-17
879	879	scription drugs, that initially ac-18
880	880	quires the drug and the amount 19
881	881	reported under subclause (I)(jj) 20
882	882	for each drug. 21
883	883	‘‘(ff) A list inclusive of the 22
884	884	brand name, generic or non-pro-23
885	885	prietary name, and National 24
886	886	Drug Code of covered part D 25
887	887	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
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889	889	•S 882 IS
890	890	drugs subject to an agreement 1
891	891	with a covered entity under sec-2
892	892	tion 340B of the Public Health 3
893	893	Service Act for which the phar-4
894	894	macy benefit manager or an affil-5
895	895	iate of the pharmacy benefit 6
896	896	manager had a contract or other 7
897	897	arrangement with such a covered 8
898	898	entity in the service area of such 9
899	899	plan. 10
900	900	‘‘(III) Where a drug approved 11
901	901	under section 505(c) of the Federal 12
902	902	Food, Drug, and Cosmetic Act (re-13
903	903	ferred to in this subclause as the ‘list-14
904	904	ed drug’) is covered by the plan, the 15
905	905	following information: 16
906	906	‘‘(aa) A list of currently 17
907	907	marketed generic drugs approved 18
908	908	under section 505(j) of the Fed-19
909	909	eral Food, Drug, and Cosmetic 20
910	910	Act pursuant to an application 21
911	911	that references such listed drug 22
912	912	that are not covered by the plan, 23
913	913	are covered on the same for-24
914	914	mulary tier or a formulary tier 25
915	915	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
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917	917	•S 882 IS
918	918	typically associated with higher 1
919	919	cost-sharing than the listed drug, 2
920	920	or are subject to utilization man-3
921	921	agement that the listed drug is 4
922	922	not subject to. 5
923	923	‘‘(bb) The estimated average 6
924	924	beneficiary cost-sharing under 7
925	925	the plan for a 30-day supply of 8
926	926	the listed drug. 9
927	927	‘‘(cc) Where a generic drug 10
928	928	listed under item (aa) is on a for-11
929	929	mulary tier typically associated 12
930	930	with higher cost-sharing than the 13
931	931	listed drug, the estimated aver-14
932	932	age cost-sharing that a bene-15
933	933	ficiary would have paid for a 30- 16
934	934	day supply of each of the generic 17
935	935	drugs described in item (aa), had 18
936	936	the plan provided coverage for 19
937	937	such drugs on the same for-20
938	938	mulary tier as the listed drug. 21
939	939	‘‘(dd) A written justification 22
940	940	for providing more favorable cov-23
941	941	erage of the listed drug than the 24
942	942	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
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944	944	•S 882 IS
945	945	generic drugs described in item 1
946	946	(aa). 2
947	947	‘‘(ee) The number of cur-3
948	948	rently marketed generic drugs 4
949	949	approved under section 505(j) of 5
950	950	the Federal Food, Drug, and 6
951	951	Cosmetic Act pursuant to an ap-7
952	952	plication that references such 8
953	953	listed drug. 9
954	954	‘‘(IV) Where a reference product 10
955	955	(as defined in section 351(i) of the 11
956	956	Public Health Service Act) is covered 12
957	957	by the plan, the following information: 13
958	958	‘‘(aa) A list of currently 14
959	959	marketed biosimilar biological 15
960	960	products licensed under section 16
961	961	351(k) of the Public Health 17
962	962	Service Act pursuant to an appli-18
963	963	cation that refers to such ref-19
964	964	erence product that are not cov-20
965	965	ered by the plan, are covered on 21
966	966	the same formulary tier or a for-22
967	967	mulary tier typically associated 23
968	968	with higher cost-sharing than the 24
969	969	reference product, or are subject 25
970	970	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
971	971	kjohnson on DSK7ZCZBW3PROD with $$_JOB 34
972	972	•S 882 IS
973	973	to utilization management that 1
974	974	the reference product is not sub-2
975	975	ject to. 3
976	976	‘‘(bb) The estimated average 4
977	977	beneficiary cost-sharing under 5
978	978	the plan for a 30-day supply of 6
979	979	the reference product. 7
980	980	‘‘(cc) Where a biosimilar bi-8
981	981	ological product listed under item 9
982	982	(aa) is on a formulary tier typi-10
983	983	cally associated with higher cost- 11
984	984	sharing than the reference prod-12
985	985	uct, the estimated average cost- 13
986	986	sharing that a beneficiary would 14
987	987	have paid for a 30-day supply of 15
988	988	each of the biosimilar biological 16
989	989	products described in item (aa), 17
990	990	had the plan provided coverage 18
991	991	for such products on the same 19
992	992	formulary tier as the reference 20
993	993	product. 21
994	994	‘‘(dd) A written justification 22
995	995	for providing more favorable cov-23
996	996	erage of the reference product 24
997	997	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
998	998	kjohnson on DSK7ZCZBW3PROD with $$_JOB 35
999	999	•S 882 IS
1000	1000	than the biosimilar biological 1
1001	1001	product described in item (aa). 2
1002	1002	‘‘(ee) The number of cur-3
1003	1003	rently marketed biosimilar bio-4
1004	1004	logical products licensed under 5
1005	1005	section 351(k) of the Public 6
1006	1006	Health Service Act, pursuant to 7
1007	1007	an application that refers to such 8
1008	1008	reference product. 9
1009	1009	‘‘(V) Total gross spending on 10
1010	1010	covered part D drugs by the plan, not 11
1011	1011	net of rebates, fees, discounts, or 12
1012	1012	other direct or indirect remuneration. 13
1013	1013	‘‘(VI) The total amount retained 14
1014	1014	by the pharmacy benefit manager or 15
1015	1015	an affiliate of such pharmacy benefit 16
1016	1016	manager in revenue related to utiliza-17
1017	1017	tion of covered part D drugs under 18
1018	1018	that plan, inclusive of bona fide serv-19
1019	1019	ice fees. 20
1020	1020	‘‘(VII) The total spending on cov-21
1021	1021	ered part D drugs net of rebates, fees, 22
1022	1022	discounts, or other direct and indirect 23
1023	1023	remuneration by the plan. 24
1024	1024	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
1025	1025	kjohnson on DSK7ZCZBW3PROD with $$_JOB 36
1026	1026	•S 882 IS
1027	1027	‘‘(VIII) An explanation of any 1
1028	1028	benefit design parameters under such 2
1029	1029	plan that encourage plan enrollees to 3
1030	1030	fill prescriptions at pharmacies that 4
1031	1031	are an affiliate of such pharmacy ben-5
1032	1032	efit manager, such as mail and spe-6
1033	1033	cialty home delivery programs, and re-7
1034	1034	tail and mail auto-refill programs. 8
1035	1035	‘‘(IX) The following information: 9
1036	1036	‘‘(aa) A list of all brokers, 10
1037	1037	consultants, advisors, and audi-11
1038	1038	tors that receive compensation 12
1039	1039	from the pharmacy benefit man-13
1040	1040	ager or an affiliate of such phar-14
1041	1041	macy benefit manager for refer-15
1042	1042	rals, consulting, auditing, or 16
1043	1043	other services offered to PDP 17
1044	1044	sponsors related to pharmacy 18
1045	1045	benefit management services. 19
1046	1046	‘‘(bb) The amount of com-20
1047	1047	pensation provided by such phar-21
1048	1048	macy benefit manager or affiliate 22
1049	1049	to each such broker, consultant, 23
1050	1050	advisor, and auditor. 24
1051	1051	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
1052	1052	kjohnson on DSK7ZCZBW3PROD with $$_JOB 37
1053	1053	•S 882 IS
1054	1054	‘‘(cc) The methodology for 1
1055	1055	calculating the amount of com-2
1056	1056	pensation provided by such phar-3
1057	1057	macy benefit manager or affil-4
1058	1058	iate, for each such broker, con-5
1059	1059	sultant, advisor, and auditor. 6
1060	1060	‘‘(X) A list of all affiliates of the 7
1061	1061	pharmacy benefit manager. 8
1062	1062	‘‘(XI) A summary document sub-9
1063	1063	mitted in a standardized template de-10
1064	1064	veloped by the Secretary that includes 11
1065	1065	such information described in sub-12
1066	1066	clauses (I) through (X). 13
1067	1067	‘‘(ii) W
1068	1068	RITTEN EXPLANATION OF CON -14
1069	1069	TRACTS OR AGREEMENTS WITH DRUG 15
1070	1070	MANUFACTURERS .— 16
1071	1071	‘‘(I) I
1072	1072	N GENERAL.—The phar-17
1073	1073	macy benefit manager shall, not later 18
1074	1074	than 30 days after the finalization of 19
1075	1075	any contract or agreement between 20
1076	1076	such pharmacy benefit manager or an 21
1077	1077	affiliate of such pharmacy benefit 22
1078	1078	manager and a drug manufacturer (or 23
1079	1079	subsidiary, agent, or entity affiliated 24
1080	1080	with such drug manufacturer) that 25
1081	1081	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
1082	1082	kjohnson on DSK7ZCZBW3PROD with $$_JOB 38
1083	1083	•S 882 IS
1084	1084	makes rebates, discounts, payments, 1
1085	1085	or other financial incentives related to 2
1086	1086	one or more covered part D drugs or 3
1087	1087	other prescription drugs, as applica-4
1088	1088	ble, of the manufacturer directly or 5
1089	1089	indirectly contingent upon coverage, 6
1090	1090	formulary placement, or utilization 7
1091	1091	management conditions on any other 8
1092	1092	covered part D drugs or other pre-9
1093	1093	scription drugs, as applicable, submit 10
1094	1094	to the PDP sponsor a written expla-11
1095	1095	nation of such contract or agreement. 12
1096	1096	‘‘(II) R
1097	1097	EQUIREMENTS.—A writ-13
1098	1098	ten explanation under subclause (I) 14
1099	1099	shall— 15
1100	1100	‘‘(aa) include the manufac-16
1101	1101	turer subject to the contract or 17
1102	1102	agreement, all covered part D 18
1103	1103	drugs and other prescription 19
1104	1104	drugs, as applicable, subject to 20
1105	1105	the contract or agreement and 21
1106	1106	the manufacturers of such drugs, 22
1107	1107	and a high-level description of 23
1108	1108	the terms of such contract or 24
1109	1109	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
1110	1110	kjohnson on DSK7ZCZBW3PROD with $$_JOB 39
1111	1111	•S 882 IS
1112	1112	agreement and how such terms 1
1113	1113	apply to such drugs; and 2
1114	1114	‘‘(bb) be certified by the 3
1115	1115	Chief Executive Officer, Chief Fi-4
1116	1116	nancial Officer, or General Coun-5
1117	1117	sel of such pharmacy benefit 6
1118	1118	manager, or affiliate of such 7
1119	1119	pharmacy benefit manager, as 8
1120	1120	applicable, or an individual dele-9
1121	1121	gated with the authority to sign 10
1122	1122	on behalf of one of these officers, 11
1123	1123	who reports directly to the offi-12
1124	1124	cer. 13
1125	1125	‘‘(III) D
1126	1126	EFINITION OF OTHER 14
1127	1127	PRESCRIPTION DRUGS.—For purposes 15
1128	1128	of this clause, the term ‘other pre-16
1129	1129	scription drugs’ means prescription 17
1130	1130	drugs covered as supplemental bene-18
1131	1131	fits under this part or prescription 19
1132	1132	drugs paid outside of this part. 20
1133	1133	‘‘(D) A
1134	1134	UDIT RIGHTS.— 21
1135	1135	‘‘(i) I
1136	1136	N GENERAL.—Not less than once 22
1137	1137	a year, at the request of the PDP sponsor, 23
1138	1138	the pharmacy benefit manager shall allow 24
1139	1139	for an audit of the pharmacy benefit man-25
1140	1140	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
1141	1141	kjohnson on DSK7ZCZBW3PROD with $$_JOB 40
1142	1142	•S 882 IS
1143	1143	ager to ensure compliance with all terms 1
1144	1144	and conditions under the written agree-2
1145	1145	ment described in this paragraph and the 3
1146	1146	accuracy of information reported under 4
1147	1147	subparagraph (C). 5
1148	1148	‘‘(ii) A
1149	1149	UDITOR.—The PDP sponsor 6
1150	1150	shall have the right to select an auditor. 7
1151	1151	The pharmacy benefit manager shall not 8
1152	1152	impose any limitations on the selection of 9
1153	1153	such auditor. 10
1154	1154	‘‘(iii) P
1155	1155	ROVISION OF INFORMATION .— 11
1156	1156	The pharmacy benefit manager shall make 12
1157	1157	available to such auditor all records, data, 13
1158	1158	contracts, and other information necessary 14
1159	1159	to confirm the accuracy of information 15
1160	1160	provided under subparagraph (C), subject 16
1161	1161	to reasonable restrictions on how such in-17
1162	1162	formation must be reported to prevent re-18
1163	1163	disclosure of such information. 19
1164	1164	‘‘(iv) T
1165	1165	IMING.—The pharmacy benefit 20
1166	1166	manager must provide information under 21
1167	1167	clause (iii) and other information, data, 22
1168	1168	and records relevant to the audit to such 23
1169	1169	auditor within 6 months of the initiation of 24
1170	1170	the audit and respond to requests for addi-25
1171	1171	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
1172	1172	kjohnson on DSK7ZCZBW3PROD with $$_JOB 41
1173	1173	•S 882 IS
1174	1174	tional information from such auditor with-1
1175	1175	in 30 days after the request for additional 2
1176	1176	information. 3
1177	1177	‘‘(v) I
1178	1178	NFORMATION FROM AFFILI -4
1179	1179	ATES.—The pharmacy benefit manager 5
1180	1180	shall be responsible for providing to such 6
1181	1181	auditor information required to be reported 7
1182	1182	under subparagraph (C) or under clause 8
1183	1183	(iii) of this subparagraph that is owned or 9
1184	1184	held by an affiliate of such pharmacy ben-10
1185	1185	efit manager. 11
1186	1186	‘‘(2) E
1187	1187	NFORCEMENT.— 12
1188	1188	‘‘(A) I
1189	1189	N GENERAL.—Each PDP sponsor 13
1190	1190	shall— 14
1191	1191	‘‘(i) disgorge to the Secretary any 15
1192	1192	amounts disgorged to the PDP sponsor by 16
1193	1193	a pharmacy benefit manager under para-17
1194	1194	graph (1)(A)(v); 18
1195	1195	‘‘(ii) require, in a written agreement 19
1196	1196	with any pharmacy benefit manager acting 20
1197	1197	on behalf of such sponsor or affiliate of 21
1198	1198	such pharmacy benefit manager, that such 22
1199	1199	pharmacy benefit manager or affiliate re-23
1200	1200	imburse the PDP sponsor for any civil 24
1201	1201	money penalty imposed on the PDP spon-25
1202	1202	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
1203	1203	kjohnson on DSK7ZCZBW3PROD with $$_JOB 42
1204	1204	•S 882 IS
1205	1205	sor as a result of the failure of the phar-1
1206	1206	macy benefit manager or affiliate to meet 2
1207	1207	the requirements of paragraph (1) that are 3
1208	1208	applicable to the pharmacy benefit man-4
1209	1209	ager or affiliate under the agreement; and 5
1210	1210	‘‘(iii) require, in a written agreement 6
1211	1211	with any such pharmacy benefit manager 7
1212	1212	acting on behalf of such sponsor or affil-8
1213	1213	iate of such pharmacy benefit manager, 9
1214	1214	that such pharmacy benefit manager or af-10
1215	1215	filiate be subject to punitive remedies for 11
1216	1216	breach of contract for failure to comply 12
1217	1217	with the requirements applicable under 13
1218	1218	paragraph (1). 14
1219	1219	‘‘(B) R
1220	1220	EPORTING OF ALLEGED VIOLA -15
1221	1221	TIONS.—The Secretary shall make available and 16
1222	1222	maintain a mechanism for manufacturers, PDP 17
1223	1223	sponsors, pharmacies, and other entities that 18
1224	1224	have contractual relationships with pharmacy 19
1225	1225	benefit managers or affiliates of such pharmacy 20
1226	1226	benefit managers to report, on a confidential 21
1227	1227	basis, alleged violations of paragraph (1)(A) or 22
1228	1228	subparagraph (C). 23
1229	1229	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
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1231	1231	•S 882 IS
1232	1232	‘‘(C) ANTI-RETALIATION AND ANTI -COER-1
1233	1233	CION.—Consistent with applicable Federal or 2
1234	1234	State law, a PDP sponsor shall not— 3
1235	1235	‘‘(i) retaliate against an individual or 4
1236	1236	entity for reporting an alleged violation 5
1237	1237	under subparagraph (B); or 6
1238	1238	‘‘(ii) coerce, intimidate, threaten, or 7
1239	1239	interfere with the ability of an individual 8
1240	1240	or entity to report any such alleged viola-9
1241	1241	tions. 10
1242	1242	‘‘(3) C
1243	1243	ERTIFICATION OF COMPLIANCE .— 11
1244	1244	‘‘(A) I
1245	1245	N GENERAL.—Each PDP sponsor 12
1246	1246	shall furnish to the Secretary (at a time and in 13
1247	1247	a manner specified by the Secretary) an annual 14
1248	1248	certification of compliance with this subsection, 15
1249	1249	as well as such information as the Secretary de-16
1250	1250	termines necessary to carry out this subsection. 17
1251	1251	‘‘(B) I
1252	1252	MPLEMENTATION.—Notwithstanding 18
1253	1253	any other provision of law, the Secretary may 19
1254	1254	implement this paragraph by program instruc-20
1255	1255	tion or otherwise. 21
1256	1256	‘‘(4) R
1257	1257	ULE OF CONSTRUCTION .—Nothing in 22
1258	1258	this subsection shall be construed as— 23
1259	1259	‘‘(A) prohibiting flat dispensing fees or re-24
1260	1260	imbursement or payment for ingredient costs 25
1261	1261	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
1262	1262	kjohnson on DSK7ZCZBW3PROD with $$_JOB 44
1263	1263	•S 882 IS
1264	1264	(including customary, industry-standard dis-1
1265	1265	counts directly related to drug acquisition that 2
1266	1266	are retained by pharmacies or wholesalers) to 3
1267	1267	entities that acquire or dispense prescription 4
1268	1268	drugs; or 5
1269	1269	‘‘(B) modifying regulatory requirements or 6
1270	1270	sub-regulatory program instruction or guidance 7
1271	1271	related to pharmacy payment, reimbursement, 8
1272	1272	or dispensing fees. 9
1273	1273	‘‘(5) S
1274	1274	TANDARD FORMATS .— 10
1275	1275	‘‘(A) I
1276	1276	N GENERAL.—Not later than June 11
1277	1277	1, 2027, the Secretary shall specify standard, 12
1278	1278	machine-readable formats for pharmacy benefit 13
1279	1279	managers to submit annual reports required 14
1280	1280	under paragraph (1)(C)(i). 15
1281	1281	‘‘(B) I
1282	1282	MPLEMENTATION.—Notwithstanding 16
1283	1283	any other provision of law, the Secretary may 17
1284	1284	implement this paragraph by program instruc-18
1285	1285	tion or otherwise. 19
1286	1286	‘‘(6) C
1287	1287	ONFIDENTIALITY.— 20
1288	1288	‘‘(A) I
1289	1289	N GENERAL.—Information disclosed 21
1290	1290	by a pharmacy benefit manager, an affiliate of 22
1291	1291	a pharmacy benefit manager, a PDP sponsor, 23
1292	1292	or a pharmacy under this subsection that is not 24
1293	1293	otherwise publicly available or available for pur-25
1294	1294	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
1295	1295	kjohnson on DSK7ZCZBW3PROD with $$_JOB 45
1296	1296	•S 882 IS
1297	1297	chase shall not be disclosed by the Secretary or 1
1298	1298	a PDP sponsor receiving the information, ex-2
1299	1299	cept that the Secretary may disclose the infor-3
1300	1300	mation for the following purposes: 4
1301	1301	‘‘(i) As the Secretary determines nec-5
1302	1302	essary to carry out this part. 6
1303	1303	‘‘(ii) To permit the Comptroller Gen-7
1304	1304	eral to review the information provided. 8
1305	1305	‘‘(iii) To permit the Director of the 9
1306	1306	Congressional Budget Office to review the 10
1307	1307	information provided. 11
1308	1308	‘‘(iv) To permit the Executive Direc-12
1309	1309	tor of the Medicare Payment Advisory 13
1310	1310	Commission to review the information pro-14
1311	1311	vided. 15
1312	1312	‘‘(v) To the Attorney General for the 16
1313	1313	purposes of conducting oversight and en-17
1314	1314	forcement under this title. 18
1315	1315	‘‘(vi) To the Inspector General of the 19
1316	1316	Department of Health and Human Serv-20
1317	1317	ices in accordance with its authorities 21
1318	1318	under the Inspector General Act of 1978 22
1319	1319	(section 406 of title 5, United States 23
1320	1320	Code), and other applicable statutes. 24
1321	1321	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00045 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
1322	1322	kjohnson on DSK7ZCZBW3PROD with $$_JOB 46
1323	1323	•S 882 IS
1324	1324	‘‘(B) RESTRICTION ON USE OF INFORMA -1
1325	1325	TION.—The Secretary, the Comptroller General, 2
1326	1326	the Director of the Congressional Budget Of-3
1327	1327	fice, and the Executive Director of the Medicare 4
1328	1328	Payment Advisory Commission shall not report 5
1329	1329	on or disclose information disclosed pursuant to 6
1330	1330	subparagraph (A) to the public in a manner 7
1331	1331	that would identify— 8
1332	1332	‘‘(i) a specific pharmacy benefit man-9
1333	1333	ager, affiliate, pharmacy, manufacturer, 10
1334	1334	wholesaler, PDP sponsor, or plan; or 11
1335	1335	‘‘(ii) contract prices, rebates, dis-12
1336	1336	counts, or other remuneration for specific 13
1337	1337	drugs in a manner that may allow the 14
1338	1338	identification of specific contracting parties 15
1339	1339	or of such specific drugs. 16
1340	1340	‘‘(7) D
1341	1341	EFINITIONS.—For purposes of this sub-17
1342	1342	section: 18
1343	1343	‘‘(A) A
1344	1344	FFILIATE.—The term ‘affiliate’ 19
1345	1345	means, with respect to any pharmacy benefit 20
1346	1346	manager or PDP sponsor, any entity that, di-21
1347	1347	rectly or indirectly— 22
1348	1348	‘‘(i) owns or is owned by, controls or 23
1349	1349	is controlled by, or is otherwise related in 24
1350	1350	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00046 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
1351	1351	kjohnson on DSK7ZCZBW3PROD with $$_JOB 47
1352	1352	•S 882 IS
1353	1353	any ownership structure to such pharmacy 1
1354	1354	benefit manager or PDP sponsor; or 2
1355	1355	‘‘(ii) acts as a contractor, principal, or 3
1356	1356	agent to such pharmacy benefit manager 4
1357	1357	or PDP sponsor, insofar as such con-5
1358	1358	tractor, principal, or agent performs any of 6
1359	1359	the functions described under subpara-7
1360	1360	graph (C). 8
1361	1361	‘‘(B) B
1362	1362	ONA FIDE SERVICE FEE.—The term 9
1363	1363	‘bona fide service fee’ means a fee that is reflec-10
1364	1364	tive of the fair market value (as specified by the 11
1365	1365	Secretary, through notice and comment rule-12
1366	1366	making) for a bona fide, itemized service actu-13
1367	1367	ally performed on behalf of an entity, that the 14
1368	1368	entity would otherwise perform (or contract for) 15
1369	1369	in the absence of the service arrangement and 16
1370	1370	that is not passed on in whole or in part to a 17
1371	1371	client or customer, whether or not the entity 18
1372	1372	takes title to the drug. Such fee must be a flat 19
1373	1373	dollar amount and shall not be directly or indi-20
1374	1374	rectly based on, or contingent upon— 21
1375	1375	‘‘(i) drug price, such as wholesale ac-22
1376	1376	quisition cost or drug benchmark price 23
1377	1377	(such as average wholesale price); 24
1378	1378	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
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1380	1380	•S 882 IS
1381	1381	‘‘(ii) the amount of discounts, rebates, 1
1382	1382	fees, or other direct or indirect remunera-2
1383	1383	tion with respect to covered part D drugs 3
1384	1384	dispensed to enrollees in a prescription 4
1385	1385	drug plan, except as permitted pursuant to 5
1386	1386	paragraph (1)(A)(ii); 6
1387	1387	‘‘(iii) coverage or formulary placement 7
1388	1388	decisions or the volume or value of any re-8
1389	1389	ferrals or business generated between the 9
1390	1390	parties to the arrangement; or 10
1391	1391	‘‘(iv) any other amounts or meth-11
1392	1392	odologies prohibited by the Secretary. 12
1393	1393	‘‘(C) P
1394	1394	HARMACY BENEFIT MANAGER .—The 13
1395	1395	term ‘pharmacy benefit manager’ means any 14
1396	1396	person or entity that, either directly or through 15
1397	1397	an intermediary, acts as a price negotiator or 16
1398	1398	group purchaser on behalf of a PDP sponsor or 17
1399	1399	prescription drug plan, or manages the pre-18
1400	1400	scription drug benefits provided by such spon-19
1401	1401	sor or plan, including the processing and pay-20
1402	1402	ment of claims for prescription drugs, the per-21
1403	1403	formance of drug utilization review, the proc-22
1404	1404	essing of drug prior authorization requests, the 23
1405	1405	adjudication of appeals or grievances related to 24
1406	1406	the prescription drug benefit, contracting with 25
1407	1407	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 E:\BILLS\S882.IS S882
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1409	1409	•S 882 IS
1410	1410	network pharmacies, controlling the cost of cov-1
1411	1411	ered part D drugs, or the provision of related 2
1412	1412	services. Such term includes any person or enti-3
1413	1413	ty that carries out one or more of the activities 4
1414	1414	described in the preceding sentence, irrespective 5
1415	1415	of whether such person or entity calls itself a 6
1416	1416	‘pharmacy benefit manager’.’’. 7
1417	1417	(b) MA–PD P
1418	1418	LANS.—Section 1857(f)(3) of the So-8
1419	1419	cial Security Act (42 U.S.C. 1395w–27(f)(3)), as amended 9
1420	1420	by section 2(d)(2), is amended by adding at the end the 10
1421	1421	following new subparagraph: 11
1422	1422	‘‘(G) R
1423	1423	EQUIREMENTS RELATING TO PHAR -12
1424	1424	MACY BENEFIT MANAGERS .—For plan years be-13
1425	1425	ginning on or after January 1, 2028, section 14
1426	1426	1860D–12(h).’’. 15
1427	1427	(c) N
1428	1428	ONAPPLICATION OF PAPERWORKREDUCTION 16
1429	1429	A
1430	1430	CT.—Chapter 35 of title 44, United States Code, shall 17
1431	1431	not apply to the implementation of this subsection. 18
1432	1432	Æ
1433	1433	VerDate Sep 11 2014 08:57 Mar 19, 2025 Jkt 059200 PO 00000 Frm 00049 Fmt 6652 Sfmt 6301 E:\BILLS\S882.IS S882
1434	1434	kjohnson on DSK7ZCZBW3PROD with $$_JOB