[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 526 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 526
To prevent unfair and deceptive acts or practices and the dissemination
of false information related to pharmacy benefit management services
for prescription drugs, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 11, 2025
Mr. Grassley (for himself, Ms. Cantwell, Ms. Ernst, Mr. Welch, Mrs.
Capito, Mrs. Shaheen, Mr. Marshall, Mr. Heinrich, Mr. Moran, Mrs. Hyde-
Smith, Mr. Tillis, and Mr. Rounds) introduced the following bill; which
was read twice and referred to the Committee on Commerce, Science, and
Transportation
_______________________________________________________________________
A BILL
To prevent unfair and deceptive acts or practices and the dissemination
of false information related to pharmacy benefit management services
for prescription drugs, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Pharmacy Benefit Manager
Transparency Act of 2025''.
SEC. 2. PROHIBITION ON UNFAIR OR DECEPTIVE PRESCRIPTION DRUG PRICING
PRACTICES.
(a) Conduct Prohibited.--Except as provided in subsection (b), it
shall be unlawful for any pharmacy benefit manager (or affiliate,
subsidiary, or agent of a pharmacy benefit manager), directly or
indirectly, to engage in any of the following activities related to
pharmacy benefit management services:
(1) Charge a health plan or payer a different amount for a
prescription drug's ingredient cost or dispensing fee than the
amount the pharmacy benefit manager reimburses a pharmacy for
the prescription drug's ingredient cost or dispensing fee where
the pharmacy benefit manager retains the amount of any such
difference.
(2) Arbitrarily, unfairly, or deceptively, by contract or
any other means, reduce, rescind, or otherwise claw back any
reimbursement payment, in whole or in part, to a pharmacist or
pharmacy for a prescription drug's ingredient cost or
dispensing fee, unless--
(A) the original claim was submitted fraudulently;
(B) the original claim payment was inconsistent
with the reimbursement terms in the contract; or
(C) the pharmacist services were not rendered by
the pharmacy or pharmacist.
(3) Arbitrarily, unfairly, or deceptively, by contract or
any other means, increase fees or lower reimbursement to a
pharmacy in order to offset reimbursement changes instructed by
the Federal Government under any health plan funded by the
Federal Government.
(b) Exceptions.--A pharmacy benefit manager shall not be in
violation of paragraph (1) or (3) of subsection (a) if the pharmacy
benefit manager meets the following conditions:
(1) The pharmacy benefit manager, affiliate, subsidiary, or
agent passes along or returns 100 percent of any price
concession to a health plan or payer, including any rebate,
discount, or other price concession.
(2) The pharmacy benefit manager, affiliate, subsidiary, or
agent provides full and complete disclosure of--
(A) the cost, price, and reimbursement of a
prescription drug to each health plan, payer, and
pharmacy with which the pharmacy benefit manager,
affiliate, subsidiary, or agent has a contract or
agreement to provide pharmacy benefit management
services;
(B) each fee, markup, and discount charged or
imposed by the pharmacy benefit manager, affiliate,
subsidiary, or agent to each health plan, payer, and
pharmacy with which the pharmacy benefit manager,
affiliate, subsidiary, or agent has a contract or
agreement for pharmacy benefit management services; or
(C) the aggregate amount of all remuneration the
pharmacy benefit manager receives from a prescription
drug manufacturer for a prescription drug, including
any rebate, discount, administration fee, and any other
payment or credit obtained or retained by the pharmacy
benefit manager, or affiliate, subsidiary, or agent of
the pharmacy benefit manager, pursuant to a contract or
agreement for pharmacy benefit management services to a
health plan, payer, or any Federal agency (upon the
request of the agency).
SEC. 3. PROHIBITION ON FALSE INFORMATION.
It shall be unlawful for any person to report information related
to pharmacy benefit management services to a Federal department or
agency if--
(1) the person knew, or reasonably should have known, the
information to be false or misleading;
(2) the information was required by law to be reported; and
(3) the false or misleading information reported by the
person would affect analysis or information compiled by the
Federal department or agency for statistical or analytical
purposes with respect to the market for pharmacy benefit
management services.
SEC. 4. TRANSPARENCY.
(a) Reporting by Pharmacy Benefit Managers.--Subject to subsection
(d), not later than 1 year after the date of enactment of this Act, and
annually thereafter, each pharmacy benefit manager (or affiliate,
subsidiary, or agent of a pharmacy benefit manager) shall report to the
Commission and the Secretary of Health and Human Services the following
information:
(1) The aggregate amount of the difference between the
amount the pharmacy benefit manager was paid by each health
plan and the amount that the pharmacy benefit manager paid each
pharmacy on behalf of the health plan for prescription drugs.
(2) The aggregate amount of any--
(A) generic effective rate fee charged to each
pharmacy;
(B) direct and indirect remuneration fee charged or
other price concession to each pharmacy; and
(C) payment rescinded or otherwise clawed back from
a reimbursement made to each pharmacy.
(3) If, during the reporting year, the pharmacy benefit
manager moved or reassigned a prescription drug to a formulary
tier that has a higher cost, higher copayment, higher
coinsurance, or higher deductible to a consumer, or a lower
reimbursement to a pharmacy, an explanation of the reason why
the drug was moved or reassigned from 1 tier to another,
including whether the move or reassignment was determined or
requested by a prescription drug manufacturer or other entity.
(4) With respect to any pharmacy benefit manager that owns,
controls, or is affiliated with a pharmacy, a report regarding
any difference in reimbursement rates or practices, direct and
indirect remuneration fees or other price concessions, and
clawbacks between a pharmacy that is owned, controlled, or
affiliated with the pharmacy benefit manager and any other
pharmacy.
(b) Report to Congress.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, and annually thereafter, the Commission
shall submit to the Committee on Commerce, Science, and
Transportation of the Senate and the Committee on Energy and
Commerce of the House of Representatives a report that
addresses, at a minimum--
(A) the number actions brought by the Commission
during the reporting year to enforce this Act and the
outcome of each such enforcement action;
(B) the number of open investigations or inquiries
into potential violations of this Act as of the time
the report is submitted;
(C) the number and nature of complaints received by
the Commission relating to an allegation of a violation
of this Act during the reporting year;
(D) an anonymized summary of the reports filed with
the Commission pursuant to subsection (a) for the
reporting year;
(E) an analysis of the requirements of this Act and
whether the implementation of such requirements leads
to mergers (including horizontal mergers or vertical
mergers) amongst any pharmacy benefit managers, or any
pharmacy benefit manager that owns, controls, or is
affiliated with a pharmacy, or any pharmacy benefit
manager that owns, controls, or is affiliated with a
health plan, and the effect of such merger (including
the likelihood of a substantial decrease in competition
or the potential for a monopoly); and
(F) policy or legislative recommendations to
strengthen any enforcement action relating to a
violation of this Act, including recommendations to
include additional prohibited conduct in section 2(a),
and recommendations to encourage more competition and
decrease the likelihood of a monopoly in the
pharmaceutical supply chain.
(2) Formulary design or placement practices.--Not later
than 1 year after the date of enactment of this Act, the
Commission shall submit to the Committee on Commerce, Science,
and Transportation of the Senate, the Committee on Finance of
the Senate, the Committee on Health, Education, Labor, and
Pensions of the Senate, the Committee on Ways and Means of the
House of Representatives, and the Committee on Energy and
Commerce of the House of Representatives a report that
addresses the policies, practices, and role of pharmacy benefit
managers (including their affiliates, subsidiaries, and agents)
regarding formulary design or placement, including--
(A) whether pharmacy benefit managers (including
their affiliates, subsidiaries, and agents) use
formulary design or placement to increase their gross
revenue without an accompanying increase in patient
access or decrease in patient cost; or
(B) recommendations to Congress for legislative
action addressing such policies, practices, and role of
pharmacy benefit managers (including their affiliates,
subsidiaries, and agents).
(3) Construction.--Nothing in this section shall be
construed as authorizing the Commission to disclose any
information that is a trade secret or confidential information
described in section 552(b)(4) of title 5, United States Code,
except as necessary to enforce this Act.
(4) Confidentiality.--The Commission may disclose the
information in a form which does not disclose the identity of a
specific pharmacy benefit manager, pharmacy, or health plan for
the following purposes:
(A) To permit the Comptroller General of the United
States to review the information provided to carry out
this Act.
(B) To permit the Director of the Congressional
Budget Office to review the information provided.
(c) GAO Study.--Not later than 1 year after the date of enactment
of this Act, the Comptroller General of the United States shall submit
to the Committee on Commerce, Science, and Transportation, the
Committee on Finance, and the Committee on Health, Education, Labor,
and Pensions of the Senate and to the Committee on Ways and Means and
the Committee on Energy and Commerce of the House of Representatives a
report that--
(1) addresses, at minimum--
(A) the role that pharmacy benefit managers play in
the pharmaceutical supply chain;
(B) the state of competition among pharmacy benefit
managers, including the market share for the Nation's
10 largest pharmacy benefit managers;
(C) the use of rebates and fees by pharmacy benefit
managers, including data for each of the 10 largest
pharmacy benefit managers that reflects, for each drug
in the formulary of each such pharmacy benefit
manager--
(i) the amount of the rebate passed on to
patients;
(ii) the amount of the rebate passed on to
payors;
(iii) the amount of the rebate kept by the
pharmacy benefit manager; and
(iv) the role of fees charged by the
pharmacy benefit manager;
(D) whether pharmacy benefit managers structure
their formularies in favor of high-rebate prescription
drugs over lower-cost, lower-rebate alternatives;
(E) the average prior authorization approval time
for each of the 10 largest pharmacy benefit managers;
(F) factors affecting the use of step therapy in
each of the 10 largest pharmacy benefit managers;
(G) the extent to which the price that pharmacy
benefit managers charge payors, such as the Medicare
program under title XXVIII of the Social Security Act
(42 U.S.C. 1395 et seq.), State Medicaid programs under
title XIX of the Social Security Act (42 U.S.C. 1396 et
seq.), the Federal Employees Health Benefits Program
under chapter 89 of title 5, United States Code, or
private payors, for a drug is more than such pharmacy
benefit managers pay the pharmacy for the drug; and
(H) the competitive impact of pharmacy benefit
managers' business practices, including the impact that
such business practices have on the cost of health plan
premiums or prescription drugs for consumers; and
(2) provides recommendations for legislative action to
lower the cost of prescription drugs for consumers and payors,
improve the efficiency of the pharmaceutical supply chain by
lowering intermediary costs, improve competition in pharmacy
benefit management, and provide transparency in pharmacy
benefit management.
(d) Privacy Requirements.--Any entity shall provide information
under subsection (a) in a manner consistent with the privacy, security,
and breach notification regulations promulgated under section 264(c) of
the Health Insurance Portability and Accountability Act of 1996 (42
U.S.C. 1320d-2 note) (or any successor regulation), and shall restrict
the use and disclosure of such information according to such
regulations.
SEC. 5. WHISTLEBLOWER PROTECTIONS.
(a) In General.--A pharmacy benefit manager, health plan,
pharmaceutical manufacturer, pharmacy, or any affiliate, subsidiary, or
agent thereof shall not, directly or indirectly, discharge, demote,
suspend, diminish, or withdraw benefits from, threaten, harass, or in
any other manner discriminate against or adversely impact a covered
individual because--
(1) the covered individual, or anyone perceived as
assisting the covered individual, takes (or is suspected to
have taken or will take) a lawful action in providing to
Congress, an agency of the Federal Government, the attorney
general of a State, a State regulator with authority over the
distribution or insurance coverage of prescription drugs, or a
law enforcement agency relating to any act or omission that the
covered individual reasonably believes to be a violation of
this Act;
(2) the covered individual provides information that the
covered individual reasonably believes evidences such a
violation to--
(A) a person with supervisory authority over the
covered individual at the pharmacy benefit manager,
health plan, pharmaceutical manufacturer, pharmacy, or
any affiliate, subsidiary, or agent thereof; or
(B) another individual working for the pharmacy
benefit manager, health plan, pharmaceutical
manufacturer, pharmacy, or any affiliate, subsidiary,
or agent thereof who the covered individual reasonably
believes has the authority to investigate, discover, or
terminate the violation or to take any other action to
address the violation;
(3) the covered individual testifies (or it is suspected
that the covered individual will testify) in an investigation
or judicial or administrative proceeding concerning such a
violation; or
(4) the covered individual assists or participates (or it
is expected that the covered individual will assist or
participate) in such an investigation or judicial or
administrative proceeding.
(b) Enforcement.--An individual who alleges any adverse action in
violation of subsection (a) may bring an action for a jury trial in the
appropriate district court of the United States for the following
relief:
(1) Temporary relief while the case is pending.
(2) Reinstatement with the same seniority status that the
individual would have had, but for the discharge or
discrimination.
(3) Twice the amount of back pay otherwise owed to the
individual, with interest.
(4) Consequential and compensatory damages, and
compensation for litigation costs, expert witness fees, and
reasonable attorneys' fees.
(c) Waiver of Rights and Remedies.--The rights and remedies
provided for in this section shall not be waived by any policy form or
condition of employment, including by a predispute arbitration
agreement.
(d) Predispute Arbitration Agreements.--No predispute arbitration
agreement shall be valid or enforceable if the agreement requires
arbitration of a dispute arising under this section.
SEC. 6. ENFORCEMENT.
(a) Enforcement by the Commission.--
(1) Unfair and deceptive acts or practices.--A violation of
this Act shall be treated as a violation of a rule defining an
unfair or deceptive act or practice under section 18(a)(1)(B)
of the Federal Trade Commission