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 purposes.

Overview

Title

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 purposes.

ELI5 AI

H. R. 2450 is a bill that wants to make sure people who manage how medicine is bought and paid for do their job honestly by telling everyone how much things cost and why. It also sets big fines for not sharing this information, but some people think that's too tough on smaller companies.

Summary AI

H. R. 2450 aims to amend existing laws to enhance oversight of pharmacy benefit management services in the United States. The bill introduces new requirements for transparency and disclosure of information related to prescription drug pricing, expenditures, and rebates. It mandates regular reporting from pharmacy benefit managers to group health plans and insurance issuers, ensuring that costs and compensation details are made clear. Additionally, it establishes enforcement mechanisms and penalties for non-compliance to improve transparency and accountability in the pharmaceutical supply chain.

Published

2025-03-27

Congress: 119

Session: 1

Chamber: HOUSE

Status: Introduced in House

Date: 2025-03-27

Package ID: BILLS-119hr2450ih

Keywords AI

pharmacy benefit management drug pricing transparency public health service act amendment employee retirement income security act amendment internal revenue code amendment hipaa compliance transparency reporting penalties for non-compliance group health plans secretary's regulatory powers

Sources

Bill Text

Bill Metadata

Bill Statistics

Size

Sections:

Words:

16,108

Pages:

Sentences:

131

Language

Nouns: 5,627

Verbs: 1,094

Adjectives: 893

Adverbs: 79

Numbers: 350

Entities: 501

Complexity

Average Token Length:

4.35

Average Sentence Length:

122.96

Token Entropy:

5.22

Readability (ARI):

64.16

AnalysisAI

Summary of the Bill

The proposed legislation, titled the "Prescription Drug Transparency and Affordability Act," aims to amend existing laws such as the Public Health Service Act, the Employee Retirement Income Security Act of 1974, and the Internal Revenue Code of 1984. Its primary focus is to increase oversight of pharmacy benefit management (PBM) services. The act requires entities that manage drug benefits to report detailed information on drug pricing and spending to group health plans. These reports must adhere to privacy regulations. The purpose is to ensure transparency in drug costs, promoting affordability for patients while maintaining compliance with privacy standards like HIPAA.

Significant Issues

One of the prominent issues is the complexity and dense language of the bill. This complexity may pose challenges to stakeholders and the general public in understanding its requirements. The bill also introduces severe penalties for non-compliance, such as a $10,000 daily fine for failure to provide information, which could disproportionately affect smaller entities.

The legislation grants considerable regulatory power to the Secretary, who is tasked with defining certain terms and developing rules through future rulemaking. This aspect introduces potential ambiguity and variability in enforcement, particularly since key terms like "remuneration" and "contracted compensation" are not defined in the text but instead left to the Secretary's discretion.

Privacy concerns arise due to the requirement for PBMs to report sensitive health information, even though the bill mandates adherence to privacy regulations under HIPAA. Additionally, the opt-in provision for large employers or plans could lead to uneven compliance burdens between larger and smaller entities.

Broad Impact on the Public

For the general public, this bill is intended to bring greater transparency to drug pricing and spending by pharmacy benefit managers. If executed well, such transparency could lead to lower prescription drug costs for consumers. However, the bill's complexity and the significant penalties for non-compliance might result in increased administrative costs for health plans and insurers, potentially trickling down to consumers as higher premiums or reduced benefits.

Impact on Specific Stakeholders

Impact on Consumers

Consumers might benefit from increased transparency in drug pricing, potentially leading to lower out-of-pocket costs and a better understanding of their pharmacy benefits. However, if administrative costs for compliance increase, there is a risk that these costs could be passed on to consumers.

Impact on Pharmacy Benefit Managers

Pharmacy benefit managers will face new compliance obligations, requiring regular and detailed reporting. While this could improve competitive practices and transparency, the heavy penalties for non-compliance and the potential for rulemaking overreach may impose significant operational and financial challenges.

Impact on Small Business Health Plans

Small business health plans might encounter difficulties due to the heavy compliance burdens, compared to larger entities that could opt-in for relaxed reporting. The harsh penalties could be particularly concerning for smaller entities with limited resources to handle such comprehensive reporting requirements.

Regulatory Bodies

Regulatory bodies, particularly those responsible for implementing and enforcing these requirements, may experience challenges due to the bill's vague definitions and the potential variability in rulemaking. This could lead to inconsistencies in enforcement and impact the effectiveness of achieving the bill's overarching goals.

In conclusion, while the "Prescription Drug Transparency and Affordability Act" seeks to enhance transparency and affordability in drug pricing for consumers, its complex language, significant penalties, and regulatory ambiguities pose challenges. These issues could impact its effectiveness in achieving the intended outcomes, highlighting a need for careful implementation and monitoring to ensure the benefits outweigh the burdens.

Financial Assessment

In examining the financial references within H. R. 2450, the bill presents several notable points regarding the financial oversight and penalties associated with pharmacy benefit management services.

Monetary Penalties

The bill proposes significant financial penalties for non-compliance with its requirements. Entities that fail to provide necessary information to group health plans or insurance issuers may face a civil monetary penalty of $10,000 for each day the violation continues. This aspect aims to ensure adherence to the bill's transparency mandates but may also be viewed as disproportionately punitive, particularly for smaller entities. Such severe penalties could impose a substantial financial burden, potentially leading to bankruptcy or significant operational challenges for these organizations. This aspect ties directly to the issue raised regarding the harshness of penalties, especially for those unable to comply swiftly due to resource constraints.

Reporting Requirements

The bill requires detailed reporting of financial transactions related to prescription drugs. Specifically, entities must disclose the contracted compensation paid for each drug, rebates, fees, and other remuneration involved. The reporting period obligations demand reports at least every six months, with the possibility of more frequent quarterly reports upon request. These financial disclosures are central to ensuring transparency and can have substantial impacts on how drugs are priced and reimbursed. However, concerns are identified regarding the complexity and burden of these reporting requirements, which could disproportionately impact smaller businesses.

Definitions and Rulemaking

The financial terms such as "remuneration" and "contracted compensation" are undefined within the bill, with the Secretary assigned the authority to set these definitions through future rulemaking. This presents potential issues of ambiguity and inconsistency, as stakeholders might face uncertainty about what specifically must be reported. The lack of consistent terminology could lead to variability in how entities interpret and comply with financial reporting requirements.

Financial Impact on Stakeholders

The bill includes provisions for financial information related to pharmacy benefit management services compensation structures, which are important for selecting and negotiating with service providers. However, the opt-in provision for large employers or plans could create disparities between large entities able to comply and smaller entities that struggle under the same financial burdens.

Privacy and Financial Data

Though the bill mandates disclosure of financial data associated with prescription drugs, it also raises privacy concerns despite adherence to HIPAA regulations. There might be a tension between the need for financial transparency and the protection of sensitive health data. This balance is critical for compliance but also for maintaining trust among participants and beneficiaries.

Overall, while H. R. 2450 seeks to enhance transparency and accountability in pharmacy benefit management, the financial implications and burdens it introduces warrant careful consideration to ensure equitable impacts across varied stakeholders.

Issues

The language in Section 2 regarding oversight of pharmacy benefit management services is excessively complex and dense, making it difficult for stakeholders and the general public to understand the requirements clearly.
Section 2 imposes severe penalties, such as a civil monetary penalty of $10,000 per day for failure to provide information, which might be disproportionately punitive, especially for smaller entities unable to meet these requirements.
Throughout Sections 2799A-11, 726, and 9826, there is potential ambiguity and inconsistency in terminology and definitions, such as 'remuneration,' 'contracted compensation,' and 'affiliated pharmacy,' which are left to be defined through future rulemaking by the Secretary. This could lead to misinterpretation and variability in enforcement.
The bill mandates sensitive health information reporting by pharmacy benefit managers, raising privacy concerns despite the provisions for HIPAA compliance. This is pertinent in Sections 2799A-11(b), 726(b), and 9826(b).
The opt-in provision for large employers or plans in Sections 2799A-11(b)(3) and similar clauses in Sections 726 and 9826, may lead to inconsistency and disparate impacts between large and small entities in requirements and compliance burdens.
Section 2 grants significant regulatory determination powers to the Secretary, such as future definitions and rulemaking, creating potential for overreach or variability in enforcement without clear legislative guidelines. This is echoed across parallel sections 2799A-11, 726, and 9826.
Sections 2799A-11(b)(4)(G), 726(b)(4)(G), and 9826(b)(4)(G) propose 'limited forms of reports' which lack clarity and criteria, potentially favoring certain entities and impacting transparency.
The bill's requirements for data to be aggregated or anonymized could reduce the granularity and effectiveness of data needed for auditing and oversight, as noted in Sections 2799A-11(b), 726(b), and 9826(b).
There is a lack of explicit guidance on how the prohibition of contractual terms that limit information disclosure will be practically enforced, as highlighted in Section 2 and mirrored in Sections 2799A-11, 726, and 9826.

Sections

Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.

1. Short title Read Opens in new tab

Summary AI

The section titled "Short title" states that the official name for this Act is the "Prescription Drug Transparency and Affordability Act".

2. Oversight of pharmacy benefit management services Read Opens in new tab

Summary AI

In a move to enhance transparency, the bill establishes oversight requirements for pharmacy benefit management services associated with group health plans and insurers. These entities must regularly report on prescription costs and rebates, while ensuring the privacy of participant information; failing to comply or providing false information may result in monetary penalties.

Money References

“(2) INFORMATION DESCRIBED.—For purposes of paragraph (1), the information described in this paragraph is, with respect to drugs covered by a group health plan or group health insurance coverage offered by a health insurance issuer in connection with a group health plan during each reporting period— “(A) in the case of a group health plan that is offered by a specified large employer or that is a specified large plan, and is not offered as health insurance coverage, or in the case of health insurance coverage for which the election under paragraph (3) is made for the applicable reporting period— “(i) a list of drugs for which a claim was filed and, with respect to each such drug on such list— “(I) the contracted compensation paid by the group health plan or health insurance issuer for each covered drug (identified by the National Drug Code) to the entity providing pharmacy benefit management services or other applicable entity on behalf of the group health plan or health insurance issuer; “(II) the contracted compensation paid to the pharmacy, by any entity providing pharmacy benefit management services or other applicable entity on behalf of the group health plan or health insurance issuer, for each covered drug (identified by the National Drug Code); “(III) for each such claim, the difference between the amount paid under subclause (I) and the amount paid under subclause (II); “(IV) the proprietary name, established name or proper name, and National Drug Code; “(V) for each claim for the drug (including original prescriptions and refills) and for each dosage unit of the drug for which a claim was filed, the type of dispensing channel used to furnish the drug, including retail, mail order, or specialty pharmacy; “(VI) with respect to each drug dispensed, for each type of dispensing channel (including retail, mail order, or specialty pharmacy)— “(aa) whether such drug is a brand name drug or a generic drug, and— “(AA) in the case of a brand name drug, the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and “(BB) in the case of a generic drug, the average wholesale price, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and “(bb) the total number of— “(AA) prescription claims (including original prescriptions and refills); “(BB) participants and beneficiaries for whom a claim for such drug was filed through the applicable dispensing channel; “(CC) dosage units and dosage units per fill of such drug; and “(DD) days supply of such drug per fill; “(VII) the net price per course of treatment or single fill, such as a 30-day supply or 90-day supply to the plan or coverage after rebates, fees, alternative discounts, or other remuneration received from applicable entities; “(VIII) the total amount of out-of-pocket spending by participants and beneficiaries on such drug, including spending through copayments, coinsurance, and deductibles, but not including any amounts spent by participants and beneficiaries on drugs not covered under the plan or coverage, or for which no claim is submitted under the plan or coverage; “(IX) the total net spending on the drug; “(X) the total amount received, or expected to be received, by the plan or issuer from any applicable entity in rebates, fees, alternative discounts, or other remuneration; “(XI) the total amount received, or expected to be received, by the entity providing pharmacy benefit management services, from applicable entities, in rebates, fees, alternative discounts, or other remuneration from such entities— “(aa) for claims incurred during the reporting period; and “(bb) that is related to utilization of such drug or spending on such drug; and “(XII) to the extent feasible, information on the total amount of remuneration for such drug, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copayment assistance on behalf of such drug manufacturer), to the participants and beneficiaries enrolled in such plan or coverage; “(ii) a list of each therapeutic class (as defined by the Secretary) for which a claim was filed under the group health plan or health insurance coverage during the reporting period, and, with respect to each such therapeutic class— “(I) the total gross spending on drugs in such class before rebates, price concessions, alternative discounts, or other remuneration from applicable entities; “(II) the net spending in such class after such rebates, price concessions, alternative discounts, or other remuneration from applicable entities; “(III) the total amount received, or expected to be received, by the entity providing pharmacy benefit management services, from applicable entities, in rebates, fees, alternative discounts, or other remuneration from such entities— “(aa) for claims incurred during the reporting period; and “(bb) that is related to utilization of drugs or drug spending; “(IV) the average net spending per 30-day supply and per 90-day supply by the plan or by the issuer with respect to such coverage and its participants and beneficiaries, among all drugs within the therapeutic class for which a claim was filed during the reporting period; “(V) the number of participants and beneficiaries who filled a prescription for a drug in such class, including the National Drug Code for each such drug; “(VI) if applicable, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that class; and “(VII) the total out-of-pocket spending under the plan or coverage by participants and beneficiaries, including spending through copayments, coinsurance, and deductibles, but not including any amounts spent by participants and beneficiaries on drugs not covered under the plan or coverage or for which no claim is submitted under the plan or coverage; “(iii) with respect to any drug for which gross spending under the group health plan or health insurance coverage exceeded $10,000 during the reporting period or, in the case that gross spending under the group health plan or coverage exceeded $10,000 during the reporting period with respect to fewer than 50 drugs, with respect to the 50 prescription drugs with the highest spending during the reporting period— “(I) a list of all other drugs in the same therapeutic class as such drug; “(II) if applicable, the rationale for the formulary placement of such drug in that therapeutic category or class, selected from a list of standard rationales established by the Secretary, in consultation with stakeholders; and “(III) any change in formulary placement compared to the prior plan year; and “(iv) in the case that such plan or issuer (or an entity providing pharmacy benefit management services on behalf of such plan or issuer) has an affiliated pharmacy or pharmacy under common ownership, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost sharing assistance incentives funded by an entity providing pharmacy benefit services— “(I) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in the plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies; “(II) the percentage of total prescriptions dispensed by such pharmacies to participants or beneficiaries in such plan or coverage; and “(III) a list of all drugs dispensed by such pharmacies to participants or beneficiaries enrolled in such plan or coverage, and, with respect to each drug dispensed— “(aa) the amount charged, per dosage unit, per 30-day supply, or per 90-day supply (as applicable) to the plan or issuer, and to participants and beneficiaries; “(bb) the median amount charged to such plan or issuer, and the interquartile range of the costs, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan or coverage; “(cc) the lowest cost per dosage unit, per 30-day supply and per 90-day supply, for each such drug, including amounts charged to the plan or coverage and to participants and beneficiaries, that is available from any pharmacy included in the network of such plan or coverage; and “(dd) the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if such drug is subject to a maximum price discount; and “(B) with respect to any group health plan, including group health insurance coverage offered in connection with such a plan, regardless of whether the plan or coverage is offered by a specified large employer or whether it is a specified large plan— “(i) a summary document for the group health plan that includes such information described in clauses (i) through (iv) of subparagraph (A), as specified by the Secretary through guidance, program instruction, or otherwise (with no requirement of notice and comment rulemaking), that the Secretary determines useful to group health plans for purposes of selecting pharmacy benefit management services, such as an estimated net price to group health plan and participant or beneficiary, a cost per claim, the fee structure or reimbursement model, and estimated cost per participant or beneficiary; “(ii) a summary document for plans and issuers to provide to participants and beneficiaries, which shall be made available to participants or beneficiaries upon request to their group health plan (including in the case of group health insurance coverage offered in connection with such a plan), that— “(I) contains such information described in clauses (iii), (iv), (v), and (vi), as applicable, as specified by the Secretary through guidance, program instruction, or otherwise (with no requirement of notice and comment rulemaking) that the Secretary determines useful to participants or beneficiaries in better understanding the plan or coverage or benefits under such plan or coverage; “(II) contains only aggregate information; and “(III) states that participants and beneficiaries may request specific, claims-level information required to be furnished under subsection (c) from the group health plan or health insurance issuer; and “(iii) with respect to drugs covered by such plan or coverage during such reporting period— “(I) the total net spending by the plan or coverage for all such drugs; “(II) the total amount received, or expected to be received, by the plan or issuer from any applicable entity in rebates, fees, alternative discounts, or other remuneration; and “(III) to the extent feasible, information on the total amount of remuneration for such drugs, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copayment assistance on behalf of such drug manufacturer) to participants and beneficiaries; “(iv) amounts paid directly or indirectly in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA) of the Employee Retirement Income Security Act) to brokerage firms, brokers, consultants, advisors, or any other individual or firm, for— “(I) the referral of the group health plan's or health insurance issuer's business to an entity providing pharmacy benefit management services, including the identity of the recipient of such amounts; “(II) consideration of the entity providing pharmacy benefit management services by the group health plan or health insurance issuer; or “(III) the retention of the entity by the group health plan or health insurance issuer; “(v) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in such plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan or coverage, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives directly or indirectly funded by such entity; and “(vi) total gross spending on all drugs under the plan or coverage during the reporting period.
“(2) FAILURE TO PROVIDE INFORMATION.—A group health plan, a health insurance issuer offering group health insurance coverage, an entity providing pharmacy benefit management services on behalf of such a plan or issuer, or an applicable entity providing services on behalf of such a plan or issuer that violates subsection (a); an entity providing pharmacy benefit management services on behalf of such a plan or issuer that fails to provide the information required under subsection (b); or a group health plan that fails to provide the information required under subsection (c), shall be subject to a civil monetary penalty in the amount of $10,000 for each day during which such violation continues or such information is not disclosed or reported.
“(3) FALSE INFORMATION.—A health insurance issuer, an entity providing pharmacy benefit management services, or a third party administrator providing services on behalf of such issuer offered by a health insurance issuer that knowingly provides false information under this section shall be subject to a civil monetary penalty in an amount not to exceed $100,000 for each item of false information.
“(2) INFORMATION DESCRIBED.—For purposes of paragraph (1), the information described in this paragraph is, with respect to drugs covered by a group health plan or group health insurance coverage offered by a health insurance issuer in connection with a group health plan during each reporting period— “(A) in the case of a group health plan that is offered by a specified large employer or that is a specified large plan, and is not offered as health insurance coverage, or in the case of health insurance coverage for which the election under paragraph (3) is made for the applicable reporting period— “(i) a list of drugs for which a claim was filed and, with respect to each such drug on such list— “(I) the contracted compensation paid by the group health plan or health insurance issuer for each covered drug (identified by the National Drug Code) to the entity providing pharmacy benefit management services or other applicable entity on behalf of the group health plan or health insurance issuer; “(II) the contracted compensation paid to the pharmacy, by any entity providing pharmacy benefit management services or other applicable entity on behalf of the group health plan or health insurance issuer, for each covered drug (identified by the National Drug Code); “(III) for each such claim, the difference between the amount paid under subclause (I) and the amount paid under subclause (II); “(IV) the proprietary name, established name or proper name, and National Drug Code; “(V) for each claim for the drug (including original prescriptions and refills) and for each dosage unit of the drug for which a claim was filed, the type of dispensing channel used to furnish the drug, including retail, mail order, or specialty pharmacy; “(VI) with respect to each drug dispensed, for each type of dispensing channel (including retail, mail order, or specialty pharmacy)— “(aa) whether such drug is a brand name drug or a generic drug, and— “(AA) in the case of a brand name drug, the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and “(BB) in the case of a generic drug, the average wholesale price, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and “(bb) the total number of— “(AA) prescription claims (including original prescriptions and refills); “(BB) participants and beneficiaries for whom a claim for such drug was filed through the applicable dispensing channel; “(CC) dosage units and dosage units per fill of such drug; and “(DD) days supply of such drug per fill; “(VII) the net price per course of treatment or single fill, such as a 30-day supply or 90-day supply to the plan or coverage after rebates, fees, alternative discounts, or other remuneration received from applicable entities; “(VIII) the total amount of out-of-pocket spending by participants and beneficiaries on such drug, including spending through copayments, coinsurance, and deductibles, but not including any amounts spent by participants and beneficiaries on drugs not covered under the plan or coverage, or for which no claim is submitted under the plan or coverage; “(IX) the total net spending on the drug; “(X) the total amount received, or expected to be received, by the plan or issuer from any applicable entity in rebates, fees, alternative discounts, or other remuneration; “(XI) the total amount received, or expected to be received, by the entity providing pharmacy benefit management services, from applicable entities, in rebates, fees, alternative discounts, or other remuneration from such entities— “(aa) for claims incurred during the reporting period; and “(bb) that is related to utilization of such drug or spending on such drug; and “(XII) to the extent feasible, information on the total amount of remuneration for such drug, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copayment assistance on behalf of such drug manufacturer), to the participants and beneficiaries enrolled in such plan or coverage; “(ii) a list of each therapeutic class (as defined by the Secretary) for which a claim was filed under the group health plan or health insurance coverage during the reporting period, and, with respect to each such therapeutic class— “(I) the total gross spending on drugs in such class before rebates, price concessions, alternative discounts, or other remuneration from applicable entities; “(II) the net spending in such class after such rebates, price concessions, alternative discounts, or other remuneration from applicable entities; “(III) the total amount received, or expected to be received, by the entity providing pharmacy benefit management services, from applicable entities, in rebates, fees, alternative discounts, or other remuneration from such entities— “(aa) for claims incurred during the reporting period; and “(bb) that is related to utilization of drugs or drug spending; “(IV) the average net spending per 30-day supply and per 90-day supply by the plan or by the issuer with respect to such coverage and its participants and beneficiaries, among all drugs within the therapeutic class for which a claim was filed during the reporting period; “(V) the number of participants and beneficiaries who filled a prescription for a drug in such class, including the National Drug Code for each such drug; “(VI) if applicable, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that class; and “(VII) the total out-of-pocket spending under the plan or coverage by participants and beneficiaries, including spending through copayments, coinsurance, and deductibles, but not including any amounts spent by participants and beneficiaries on drugs not covered under the plan or coverage or for which no claim is submitted under the plan or coverage; “(iii) with respect to any drug for which gross spending under the group health plan or health insurance coverage exceeded $10,000 during the reporting period or, in the case that gross spending under the group health plan or coverage exceeded $10,000 during the reporting period with respect to fewer than 50 drugs, with respect to the 50 prescription drugs with the highest spending during the reporting period— “(I) a list of all other drugs in the same therapeutic class as such drug; “(II) if applicable, the rationale for the formulary placement of such drug in that therapeutic category or class, selected from a list of standard rationales established by the Secretary, in consultation with stakeholders; and “(III) any change in formulary placement compared to the prior plan year; and “(iv) in the case that such plan or issuer (or an entity providing pharmacy benefit management services on behalf of such plan or issuer) has an affiliated pharmacy or pharmacy under common ownership, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost sharing assistance incentives funded by an entity providing pharmacy benefit services— “(I) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in the plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies; “(II) the percentage of total prescriptions dispensed by such pharmacies to participants or beneficiaries in such plan or coverage; and “(III) a list of all drugs dispensed by such pharmacies to participants or beneficiaries enrolled in such plan or coverage, and, with respect to each drug dispensed— “(aa) the amount charged, per dosage unit, per 30-day supply, or per 90-day supply (as applicable) to the plan or issuer, and to participants and beneficiaries; “(bb) the median amount charged to such plan or issuer, and the interquartile range of the costs, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan or coverage; “(cc) the lowest cost per dosage unit, per 30-day supply and per 90-day supply, for each such drug, including amounts charged to the plan or coverage and to participants and beneficiaries, that is available from any pharmacy included in the network of such plan or coverage; and “(dd) the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if such drug is subject to a maximum price discount; and “(B) with respect to any group health plan, including group health insurance coverage offered in connection with such a plan, regardless of whether the plan or coverage is offered by a specified large employer or whether it is a specified large plan— “(i) a summary document for the group health plan that includes such information described in clauses (i) through (iv) of subparagraph (A), as specified by the Secretary through guidance, program instruction, or otherwise (with no requirement of notice and comment rulemaking), that the Secretary determines useful to group health plans for purposes of selecting pharmacy benefit management services, such as an estimated net price to group health plan and participant or beneficiary, a cost per claim, the fee structure or reimbursement model, and estimated cost per participant or beneficiary; “(ii) a summary document for plans and issuers to provide to participants and beneficiaries, which shall be made available to participants or beneficiaries upon request to their group health plan (including in the case of group health insurance coverage offered in connection with such a plan), that— “(I) contains such information described in clauses (iii), (iv), (v), and (vi), as applicable, as specified by the Secretary through guidance, program instruction, or otherwise (with no requirement of notice and comment rulemaking) that the Secretary determines useful to participants or beneficiaries in better understanding the plan or coverage or benefits under such plan or coverage; “(II) contains only aggregate information; and “(III) states that participants and beneficiaries may request specific, claims-level information required to be furnished under subsection (c) from the group health plan or health insurance issuer; “(iii) with respect to drugs covered by such plan or coverage during such reporting period— “(I) the total net spending by the plan or coverage for all such drugs; “(II) the total amount received, or expected to be received, by the plan or issuer from any applicable entity in rebates, fees, alternative discounts, or other remuneration; and “(III) to the extent feasible, information on the total amount of remuneration for such drugs, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copayment assistance on behalf of such drug manufacturer) to participants and beneficiaries; “(iv) amounts paid directly or indirectly in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA)) to brokerage firms, brokers, consultants, advisors, or any other individual or firm, for— “(I) the referral of the group health plan's or health insurance issuer's business to an entity providing pharmacy benefit management services, including the identity of the recipient of such amounts; “(II) consideration of the entity providing pharmacy benefit management services by the group health plan or health insurance issuer; or “(III) the retention of the entity by the group health plan or health insurance issuer; “(v) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in such plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan or coverage, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives directly or indirectly funded by such entity; and “(vi) total gross spending on all drugs under the plan or coverage during the reporting period.
“(10) WHOLESALE ACQUISITION COST.—The term ‘wholesale acquisition cost’ has the meaning given such term in section 1847A(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w–3a(c)(6)(B)).”; (B) in section 502 (29 U.S.C. 1132)— (i) in subsection (a)(6), by striking “or (9)” and inserting “(9), or (13)”; (ii) in subsection (b)(3), by striking “under subsection (c)(9)” and inserting “under paragraphs (9) and (13) of subsection (c)”; and (iii) in subsection (c), by adding at the end the following: “(13) SECRETARIAL ENFORCEMENT AUTHORITY RELATING TO OVERSIGHT OF PHARMACY BENEFIT MANAGEMENT SERVICES.— “(A) FAILURE TO PROVIDE INFORMATION.—The Secretary may impose a penalty against a plan administrator of a group health plan, a health insurance issuer offering group health insurance coverage, or an entity providing pharmacy benefit management services on behalf of such a plan or issuer, or an applicable entity (as defined in section 726(f)) that violates section 726(a); an entity providing pharmacy benefit management services on behalf of such a plan or issuer that fails to provide the information required under section 726(b); or any person who causes a group health plan to fail to provide the information required under section 726(c), in the amount of $10,000 for each day during which such violation continues or such information is not disclosed or reported.
“(B) FALSE INFORMATION.—The Secretary may impose a penalty against a plan administrator of a group health plan, a health insurance issuer offering group health insurance coverage, an entity providing pharmacy benefit management services, or an applicable entity (as defined in section 726(f)) that knowingly provides false information under section 726, in an amount not to exceed $100,000 for each item of false information.
“(2) INFORMATION DESCRIBED.—For purposes of paragraph (1), the information described in this paragraph is, with respect to drugs covered by a group health plan during each reporting period— “(A) in the case of a group health plan that is offered by a specified large employer or that is a specified large plan, and is not offered as health insurance coverage, or in the case of health insurance coverage for which the election under paragraph (3) is made for the applicable reporting period— “(i) a list of drugs for which a claim was filed and, with respect to each such drug on such list— “(I) the contracted compensation paid by the group health plan for each covered drug (identified by the National Drug Code) to the entity providing pharmacy benefit management services or other applicable entity on behalf of the group health plan; “(II) the contracted compensation paid to the pharmacy, by any entity providing pharmacy benefit management services or other applicable entity on behalf of the group health plan, for each covered drug (identified by the National Drug Code); “(III) for each such claim, the difference between the amount paid under subclause (I) and the amount paid under subclause (II); “(IV) the proprietary name, established name or proper name, and National Drug Code; “(V) for each claim for the drug (including original prescriptions and refills) and for each dosage unit of the drug for which a claim was filed, the type of dispensing channel used to furnish the drug, including retail, mail order, or specialty pharmacy; “(VI) with respect to each drug dispensed, for each type of dispensing channel (including retail, mail order, or specialty pharmacy)— “(aa) whether such drug is a brand name drug or a generic drug, and— “(AA) in the case of a brand name drug, the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and “(BB) in the case of a generic drug, the average wholesale price, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and “(bb) the total number of— “(AA) prescription claims (including original prescriptions and refills); “(BB) participants and beneficiaries for whom a claim for such drug was filed through the applicable dispensing channel; “(CC) dosage units and dosage units per fill of such drug; and “(DD) days supply of such drug per fill; “(VII) the net price per course of treatment or single fill, such as a 30-day supply or 90-day supply to the plan after rebates, fees, alternative discounts, or other remuneration received from applicable entities; “(VIII) the total amount of out-of-pocket spending by participants and beneficiaries on such drug, including spending through copayments, coinsurance, and deductibles, but not including any amounts spent by participants and beneficiaries on drugs not covered under the plan, or for which no claim is submitted under the plan; “(IX) the total net spending on the drug; “(X) the total amount received, or expected to be received, by the plan from any applicable entity in rebates, fees, alternative discounts, or other remuneration; “(XI) the total amount received, or expected to be received, by the entity providing pharmacy benefit management services, from applicable entities, in rebates, fees, alternative discounts, or other remuneration from such entities— “(aa) for claims incurred during the reporting period; and “(bb) that is related to utilization of such drug or spending on such drug; and “(XII) to the extent feasible, information on the total amount of remuneration for such drug, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copayment assistance on behalf of such drug manufacturer), to the participants and beneficiaries enrolled in such plan; “(ii) a list of each therapeutic class (as defined by the Secretary) for which a claim was filed under the group health plan during the reporting period, and, with respect to each such therapeutic class— “(I) the total gross spending on drugs in such class before rebates, price concessions, alternative discounts, or other remuneration from applicable entities; “(II) the net spending in such class after such rebates, price concessions, alternative discounts, or other remuneration from applicable entities; “(III) the total amount received, or expected to be received, by the entity providing pharmacy benefit management services, from applicable entities, in rebates, fees, alternative discounts, or other remuneration from such entities— “(aa) for claims incurred during the reporting period; and “(bb) that is related to utilization of drugs or drug spending; “(IV) the average net spending per 30-day supply and per 90-day supply by the plan and its participants and beneficiaries, among all drugs within the therapeutic class for which a claim was filed during the reporting period; “(V) the number of participants and beneficiaries who filled a prescription for a drug in such class, including the National Drug Code for each such drug; “(VI) if applicable, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that class; and “(VII) the total out-of-pocket spending under the plan by participants and beneficiaries, including spending through copayments, coinsurance, and deductibles, but not including any amounts spent by participants and beneficiaries on drugs not covered under the plan or for which no claim is submitted under the plan; “(iii) with respect to any drug for which gross spending under the group health plan exceeded $10,000 during the reporting period or, in the case that gross spending under the group health plan exceeded $10,000 during the reporting period with respect to fewer than 50 drugs, with respect to the 50 prescription drugs with the highest spending during the reporting period— “(I) a list of all other drugs in the same therapeutic class as such drug; “(II) if applicable, the rationale for the formulary placement of such drug in that therapeutic category or class, selected from a list of standard rationales established by the Secretary, in consultation with stakeholders; and “(III) any change in formulary placement compared to the prior plan year; and “(iv) in the case that such plan (or an entity providing pharmacy benefit management services on behalf of such plan) has an affiliated pharmacy or pharmacy under common ownership, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost sharing assistance incentives funded by an entity providing pharmacy benefit services— “(I) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in the plan to fill prescriptions at mail order, specialty, or retail pharmacies; “(II) the percentage of total prescriptions dispensed by such pharmacies to participants or beneficiaries in such plan; and “(III) a list of all drugs dispensed by such pharmacies to participants or beneficiaries enrolled in such plan, and, with respect to each drug dispensed— “(aa) the amount charged, per dosage unit, per 30-day supply, or per 90-day supply (as applicable) to the plan, and to participants and beneficiaries; “(bb) the median amount charged to such plan, and the interquartile range of the costs, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan; “(cc) the lowest cost per dosage unit, per 30-day supply and per 90-day supply, for each such drug, including amounts charged to the plan and to participants and beneficiaries, that is available from any pharmacy included in the network of such plan; and “(dd) the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if such drug is subject to a maximum price discount; and “(B) with respect to any group health plan, regardless of whether the plan is offered by a specified large employer or whether it is a specified large plan— “(i) a summary document for the group health plan that includes such information described in clauses (i) through (iv) of subparagraph (A), as specified by the Secretary through guidance, program instruction, or otherwise (with no requirement of notice and comment rulemaking), that the Secretary determines useful to group health plans for purposes of selecting pharmacy benefit management services, such as an estimated net price to group health plan and participant or beneficiary, a cost per claim, the fee structure or reimbursement model, and estimated cost per participant or beneficiary; “(ii) a summary document for plans to provide to participants and beneficiaries, which shall be made available to participants or beneficiaries upon request to their group health plan, that— “(I) contains such information described in clauses (iii), (iv), (v), and (vi), as applicable, as specified by the Secretary through guidance, program instruction, or otherwise (with no requirement of notice and comment rulemaking) that the Secretary determines useful to participants or beneficiaries in better understanding the plan or benefits under such plan; “(II) contains only aggregate information; and “(III) states that participants and beneficiaries may request specific, claims-level information required to be furnished under subsection (c) from the group health plan; and “(iii) with respect to drugs covered by such plan during such reporting period— “(I) the total net spending by the plan for all such drugs; “(II) the total amount received, or expected to be received, by the plan from any applicable entity in rebates, fees, alternative discounts, or other remuneration; and “(III) to the extent feasible, information on the total amount of remuneration for such drugs, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copayment assistance on behalf of such drug manufacturer) to participants and beneficiaries; “(iv) amounts paid directly or indirectly in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA) of the Employee Retirement Income Security Act (29 U.S.C. 1108(b)(2)(B)(ii)(dd)(AA))) to brokerage firms, brokers, consultants, advisors, or any other individual or firm, for— “(I) the referral of the group health plan's business to an entity providing pharmacy benefit management services, including the identity of the recipient of such amounts; “(II) consideration of the entity providing pharmacy benefit management services by the group health plan; or “(III) the retention of the entity by the group health plan; “(v) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in such plan to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives directly or indirectly funded by such entity; and “(vi) total gross spending on all drugs under the plan during the reporting period.

2799A–11. Oversight of entities that provide pharmacy benefit management services Read Opens in new tab

Summary AI

For plan years starting 30 months after this section's enactment, pharmacy benefit managers, health plans, and insurers must agree not to delay or limit information sharing required for reports, which must occur at least every six months. These reports will disclose detailed drug spending and pricing information to the group health plans, incorporating privacy measures, and noncompliance may result in substantial penalties up to $10,000 per day, or more for false information.

Money References

(2) INFORMATION DESCRIBED.—For purposes of paragraph (1), the information described in this paragraph is, with respect to drugs covered by a group health plan or group health insurance coverage offered by a health insurance issuer in connection with a group health plan during each reporting period— (A) in the case of a group health plan that is offered by a specified large employer or that is a specified large plan, and is not offered as health insurance coverage, or in the case of health insurance coverage for which the election under paragraph (3) is made for the applicable reporting period— (i) a list of drugs for which a claim was filed and, with respect to each such drug on such list— (I) the contracted compensation paid by the group health plan or health insurance issuer for each covered drug (identified by the National Drug Code) to the entity providing pharmacy benefit management services or other applicable entity on behalf of the group health plan or health insurance issuer; (II) the contracted compensation paid to the pharmacy, by any entity providing pharmacy benefit management services or other applicable entity on behalf of the group health plan or health insurance issuer, for each covered drug (identified by the National Drug Code); (III) for each such claim, the difference between the amount paid under subclause (I) and the amount paid under subclause (II); (IV) the proprietary name, established name or proper name, and National Drug Code; (V) for each claim for the drug (including original prescriptions and refills) and for each dosage unit of the drug for which a claim was filed, the type of dispensing channel used to furnish the drug, including retail, mail order, or specialty pharmacy; (VI) with respect to each drug dispensed, for each type of dispensing channel (including retail, mail order, or specialty pharmacy)— (aa) whether such drug is a brand name drug or a generic drug, and— (AA) in the case of a brand name drug, the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and (BB) in the case of a generic drug, the average wholesale price, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and (bb) the total number of— (AA) prescription claims (including original prescriptions and refills); (BB) participants and beneficiaries for whom a claim for such drug was filed through the applicable dispensing channel; (CC) dosage units and dosage units per fill of such drug; and (DD) days supply of such drug per fill; (VII) the net price per course of treatment or single fill, such as a 30-day supply or 90-day supply to the plan or coverage after rebates, fees, alternative discounts, or other remuneration received from applicable entities; (VIII) the total amount of out-of-pocket spending by participants and beneficiaries on such drug, including spending through copayments, coinsurance, and deductibles, but not including any amounts spent by participants and beneficiaries on drugs not covered under the plan or coverage, or for which no claim is submitted under the plan or coverage; (IX) the total net spending on the drug; (X) the total amount received, or expected to be received, by the plan or issuer from any applicable entity in rebates, fees, alternative discounts, or other remuneration; (XI) the total amount received, or expected to be received, by the entity providing pharmacy benefit management services, from applicable entities, in rebates, fees, alternative discounts, or other remuneration from such entities— (aa) for claims incurred during the reporting period; and (bb) that is related to utilization of such drug or spending on such drug; and (XII) to the extent feasible, information on the total amount of remuneration for such drug, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copayment assistance on behalf of such drug manufacturer), to the participants and beneficiaries enrolled in such plan or coverage; (ii) a list of each therapeutic class (as defined by the Secretary) for which a claim was filed under the group health plan or health insurance coverage during the reporting period, and, with respect to each such therapeutic class— (I) the total gross spending on drugs in such class before rebates, price concessions, alternative discounts, or other remuneration from applicable entities; (II) the net spending in such class after such rebates, price concessions, alternative discounts, or other remuneration from applicable entities; (III) the total amount received, or expected to be received, by the entity providing pharmacy benefit management services, from applicable entities, in rebates, fees, alternative discounts, or other remuneration from such entities— (aa) for claims incurred during the reporting period; and (bb) that is related to utilization of drugs or drug spending; (IV) the average net spending per 30-day supply and per 90-day supply by the plan or by the issuer with respect to such coverage and its participants and beneficiaries, among all drugs within the therapeutic class for which a claim was filed during the reporting period; (V) the number of participants and beneficiaries who filled a prescription for a drug in such class, including the National Drug Code for each such drug; (VI) if applicable, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that class; and (VII) the total out-of-pocket spending under the plan or coverage by participants and beneficiaries, including spending through copayments, coinsurance, and deductibles, but not including any amounts spent by participants and beneficiaries on drugs not covered under the plan or coverage or for which no claim is submitted under the plan or coverage; (iii) with respect to any drug for which gross spending under the group health plan or health insurance coverage exceeded $10,000 during the reporting period or, in the case that gross spending under the group health plan or coverage exceeded $10,000 during the reporting period with respect to fewer than 50 drugs, with respect to the 50 prescription drugs with the highest spending during the reporting period— (I) a list of all other drugs in the same therapeutic class as such drug; (II) if applicable, the rationale for the formulary placement of such drug in that therapeutic category or class, selected from a list of standard rationales established by the Secretary, in consultation with stakeholders; and (III) any change in formulary placement compared to the prior plan year; and (iv) in the case that such plan or issuer (or an entity providing pharmacy benefit management services on behalf of such plan or issuer) has an affiliated pharmacy or pharmacy under common ownership, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost sharing assistance incentives funded by an entity providing pharmacy benefit services— (I) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in the plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies; (II) the percentage of total prescriptions dispensed by such pharmacies to participants or beneficiaries in such plan or coverage; and (III) a list of all drugs dispensed by such pharmacies to participants or beneficiaries enrolled in such plan or coverage, and, with respect to each drug dispensed— (aa) the amount charged, per dosage unit, per 30-day supply, or per 90-day supply (as applicable) to the plan or issuer, and to participants and beneficiaries; (bb) the median amount charged to such plan or issuer, and the interquartile range of the costs, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan or coverage; (cc) the lowest cost per dosage unit, per 30-day supply and per 90-day supply, for each such drug, including amounts charged to the plan or coverage and to participants and beneficiaries, that is available from any pharmacy included in the network of such plan or coverage; and (dd) the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if such drug is subject to a maximum price discount; and (B) with respect to any group health plan, including group health insurance coverage offered in connection with such a plan, regardless of whether the plan or coverage is offered by a specified large employer or whether it is a specified large plan— (i) a summary document for the group health plan that includes such information described in clauses (i) through (iv) of subparagraph (A), as specified by the Secretary through guidance, program instruction, or otherwise (with no requirement of notice and comment rulemaking), that the Secretary determines useful to group health plans for purposes of selecting pharmacy benefit management services, such as an estimated net price to group health plan and participant or beneficiary, a cost per claim, the fee structure or reimbursement model, and estimated cost per participant or beneficiary; (ii) a summary document for plans and issuers to provide to participants and beneficiaries, which shall be made available to participants or beneficiaries upon request to their group health plan (including in the case of group health insurance coverage offered in connection with such a plan), that— (I) contains such information described in clauses (iii), (iv), (v), and (vi), as applicable, as specified by the Secretary through guidance, program instruction, or otherwise (with no requirement of notice and comment rulemaking) that the Secretary determines useful to participants or beneficiaries in better understanding the plan or coverage or benefits under such plan or coverage; (II) contains only aggregate information; and (III) states that participants and beneficiaries may request specific, claims-level information required to be furnished under subsection (c) from the group health plan or health insurance issuer; and (iii) with respect to drugs covered by such plan or coverage during such reporting period— (I) the total net spending by the plan or coverage for all such drugs; (II) the total amount received, or expected to be received, by the plan or issuer from any applicable entity in rebates, fees, alternative discounts, or other remuneration; and (III) to the extent feasible, information on the total amount of remuneration for such drugs, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copayment assistance on behalf of such drug manufacturer) to participants and beneficiaries; (iv) amounts paid directly or indirectly in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA) of the Employee Retirement Income Security Act) to brokerage firms, brokers, consultants, advisors, or any other individual or firm, for— (I) the referral of the group health plan's or health insurance issuer's business to an entity providing pharmacy benefit management services, including the identity of the recipient of such amounts; (II) consideration of the entity providing pharmacy benefit management services by the group health plan or health insurance issuer; or (III) the retention of the entity by the group health plan or health insurance issuer; (v) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in such plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan or coverage, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives directly or indirectly funded by such entity; and (vi) total gross spending on all drugs under the plan or coverage during the reporting period.
(2) FAILURE TO PROVIDE INFORMATION.—A group health plan, a health insurance issuer offering group health insurance coverage, an entity providing pharmacy benefit management services on behalf of such a plan or issuer, or an applicable entity providing services on behalf of such a plan or issuer that violates subsection (a); an entity providing pharmacy benefit management services on behalf of such a plan or issuer that fails to provide the information required under subsection (b); or a group health plan that fails to provide the information required under subsection (c), shall be subject to a civil monetary penalty in the amount of $10,000 for each day during which such violation continues or such information is not disclosed or reported.
(3) FALSE INFORMATION.—A health insurance issuer, an entity providing pharmacy benefit management services, or a third party administrator providing services on behalf of such issuer offered by a health insurance issuer that knowingly provides false information under this section shall be subject to a civil monetary penalty in an amount not to exceed $100,000 for each item of false information.

726. Oversight of entities that provide pharmacy benefit management services Read Opens in new tab

Summary AI

For plan years starting 30 months after this law is enacted, health plans, insurers, and pharmacy benefit managers must agree to share detailed drug spending and pricing information. This information must be reported semiannually to ensure transparency in drug costs and spending, while respecting privacy laws like HIPAA.

Money References

(2) INFORMATION DESCRIBED.—For purposes of paragraph (1), the information described in this paragraph is, with respect to drugs covered by a group health plan or group health insurance coverage offered by a health insurance issuer in connection with a group health plan during each reporting period— (A) in the case of a group health plan that is offered by a specified large employer or that is a specified large plan, and is not offered as health insurance coverage, or in the case of health insurance coverage for which the election under paragraph (3) is made for the applicable reporting period— (i) a list of drugs for which a claim was filed and, with respect to each such drug on such list— (I) the contracted compensation paid by the group health plan or health insurance issuer for each covered drug (identified by the National Drug Code) to the entity providing pharmacy benefit management services or other applicable entity on behalf of the group health plan or health insurance issuer; (II) the contracted compensation paid to the pharmacy, by any entity providing pharmacy benefit management services or other applicable entity on behalf of the group health plan or health insurance issuer, for each covered drug (identified by the National Drug Code); (III) for each such claim, the difference between the amount paid under subclause (I) and the amount paid under subclause (II); (IV) the proprietary name, established name or proper name, and National Drug Code; (V) for each claim for the drug (including original prescriptions and refills) and for each dosage unit of the drug for which a claim was filed, the type of dispensing channel used to furnish the drug, including retail, mail order, or specialty pharmacy; (VI) with respect to each drug dispensed, for each type of dispensing channel (including retail, mail order, or specialty pharmacy)— (aa) whether such drug is a brand name drug or a generic drug, and— (AA) in the case of a brand name drug, the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and (BB) in the case of a generic drug, the average wholesale price, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and (bb) the total number of— (AA) prescription claims (including original prescriptions and refills); (BB) participants and beneficiaries for whom a claim for such drug was filed through the applicable dispensing channel; (CC) dosage units and dosage units per fill of such drug; and (DD) days supply of such drug per fill; (VII) the net price per course of treatment or single fill, such as a 30-day supply or 90-day supply to the plan or coverage after rebates, fees, alternative discounts, or other remuneration received from applicable entities; (VIII) the total amount of out-of-pocket spending by participants and beneficiaries on such drug, including spending through copayments, coinsurance, and deductibles, but not including any amounts spent by participants and beneficiaries on drugs not covered under the plan or coverage, or for which no claim is submitted under the plan or coverage; (IX) the total net spending on the drug; (X) the total amount received, or expected to be received, by the plan or issuer from any applicable entity in rebates, fees, alternative discounts, or other remuneration; (XI) the total amount received, or expected to be received, by the entity providing pharmacy benefit management services, from applicable entities, in rebates, fees, alternative discounts, or other remuneration from such entities— (aa) for claims incurred during the reporting period; and (bb) that is related to utilization of such drug or spending on such drug; and (XII) to the extent feasible, information on the total amount of remuneration for such drug, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copayment assistance on behalf of such drug manufacturer), to the participants and beneficiaries enrolled in such plan or coverage; (ii) a list of each therapeutic class (as defined by the Secretary) for which a claim was filed under the group health plan or health insurance coverage during the reporting period, and, with respect to each such therapeutic class— (I) the total gross spending on drugs in such class before rebates, price concessions, alternative discounts, or other remuneration from applicable entities; (II) the net spending in such class after such rebates, price concessions, alternative discounts, or other remuneration from applicable entities; (III) the total amount received, or expected to be received, by the entity providing pharmacy benefit management services, from applicable entities, in rebates, fees, alternative discounts, or other remuneration from such entities— (aa) for claims incurred during the reporting period; and (bb) that is related to utilization of drugs or drug spending; (IV) the average net spending per 30-day supply and per 90-day supply by the plan or by the issuer with respect to such coverage and its participants and beneficiaries, among all drugs within the therapeutic class for which a claim was filed during the reporting period; (V) the number of participants and beneficiaries who filled a prescription for a drug in such class, including the National Drug Code for each such drug; (VI) if applicable, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that class; and (VII) the total out-of-pocket spending under the plan or coverage by participants and beneficiaries, including spending through copayments, coinsurance, and deductibles, but not including any amounts spent by participants and beneficiaries on drugs not covered under the plan or coverage or for which no claim is submitted under the plan or coverage; (iii) with respect to any drug for which gross spending under the group health plan or health insurance coverage exceeded $10,000 during the reporting period or, in the case that gross spending under the group health plan or coverage exceeded $10,000 during the reporting period with respect to fewer than 50 drugs, with respect to the 50 prescription drugs with the highest spending during the reporting period— (I) a list of all other drugs in the same therapeutic class as such drug; (II) if applicable, the rationale for the formulary placement of such drug in that therapeutic category or class, selected from a list of standard rationales established by the Secretary, in consultation with stakeholders; and (III) any change in formulary placement compared to the prior plan year; and (iv) in the case that such plan or issuer (or an entity providing pharmacy benefit management services on behalf of such plan or issuer) has an affiliated pharmacy or pharmacy under common ownership, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost sharing assistance incentives funded by an entity providing pharmacy benefit services— (I) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in the plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies; (II) the percentage of total prescriptions dispensed by such pharmacies to participants or beneficiaries in such plan or coverage; and (III) a list of all drugs dispensed by such pharmacies to participants or beneficiaries enrolled in such plan or coverage, and, with respect to each drug dispensed— (aa) the amount charged, per dosage unit, per 30-day supply, or per 90-day supply (as applicable) to the plan or issuer, and to participants and beneficiaries; (bb) the median amount charged to such plan or issuer, and the interquartile range of the costs, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan or coverage; (cc) the lowest cost per dosage unit, per 30-day supply and per 90-day supply, for each such drug, including amounts charged to the plan or coverage and to participants and beneficiaries, that is available from any pharmacy included in the network of such plan or coverage; and (dd) the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if such drug is subject to a maximum price discount; and (B) with respect to any group health plan, including group health insurance coverage offered in connection with such a plan, regardless of whether the plan or coverage is offered by a specified large employer or whether it is a specified large plan— (i) a summary document for the group health plan that includes such information described in clauses (i) through (iv) of subparagraph (A), as specified by the Secretary through guidance, program instruction, or otherwise (with no requirement of notice and comment rulemaking), that the Secretary determines useful to group health plans for purposes of selecting pharmacy benefit management services, such as an estimated net price to group health plan and participant or beneficiary, a cost per claim, the fee structure or reimbursement model, and estimated cost per participant or beneficiary; (ii) a summary document for plans and issuers to provide to participants and beneficiaries, which shall be made available to participants or beneficiaries upon request to their group health plan (including in the case of group health insurance coverage offered in connection with such a plan), that— (I) contains such information described in clauses (iii), (iv), (v), and (vi), as applicable, as specified by the Secretary through guidance, program instruction, or otherwise (with no requirement of notice and comment rulemaking) that the Secretary determines useful to participants or beneficiaries in better understanding the plan or coverage or benefits under such plan or coverage; (II) contains only aggregate information; and (III) states that participants and beneficiaries may request specific, claims-level information required to be furnished under subsection (c) from the group health plan or health insurance issuer; (iii) with respect to drugs covered by such plan or coverage during such reporting period— (I) the total net spending by the plan or coverage for all such drugs; (II) the total amount received, or expected to be received, by the plan or issuer from any applicable entity in rebates, fees, alternative discounts, or other remuneration; and (III) to the extent feasible, information on the total amount of remuneration for such drugs, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copayment assistance on behalf of such drug manufacturer) to participants and beneficiaries; (iv) amounts paid directly or indirectly in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA)) to brokerage firms, brokers, consultants, advisors, or any other individual or firm, for— (I) the referral of the group health plan's or health insurance issuer's business to an entity providing pharmacy benefit management services, including the identity of the recipient of such amounts; (II) consideration of the entity providing pharmacy benefit management services by the group health plan or health insurance issuer; or (III) the retention of the entity by the group health plan or health insurance issuer; (v) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in such plan or coverage to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan or coverage, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives directly or indirectly funded by such entity; and (vi) total gross spending on all drugs under the plan or coverage during the reporting period.

9826. Oversight of entities that provide pharmacy benefit management services Read Opens in new tab

Summary AI

The section mandates oversight of entities providing pharmacy benefit management services by requiring detailed reports on drug pricing and spending to be submitted to group health plans. This is to ensure transparency and compliance with privacy regulations, allowing plans and participants to understand their costs and encouraging fair business practices.

Money References

(2) INFORMATION DESCRIBED.—For purposes of paragraph (1), the information described in this paragraph is, with respect to drugs covered by a group health plan during each reporting period— (A) in the case of a group health plan that is offered by a specified large employer or that is a specified large plan, and is not offered as health insurance coverage, or in the case of health insurance coverage for which the election under paragraph (3) is made for the applicable reporting period— (i) a list of drugs for which a claim was filed and, with respect to each such drug on such list— (I) the contracted compensation paid by the group health plan for each covered drug (identified by the National Drug Code) to the entity providing pharmacy benefit management services or other applicable entity on behalf of the group health plan; (II) the contracted compensation paid to the pharmacy, by any entity providing pharmacy benefit management services or other applicable entity on behalf of the group health plan, for each covered drug (identified by the National Drug Code); (III) for each such claim, the difference between the amount paid under subclause (I) and the amount paid under subclause (II); (IV) the proprietary name, established name or proper name, and National Drug Code; (V) for each claim for the drug (including original prescriptions and refills) and for each dosage unit of the drug for which a claim was filed, the type of dispensing channel used to furnish the drug, including retail, mail order, or specialty pharmacy; (VI) with respect to each drug dispensed, for each type of dispensing channel (including retail, mail order, or specialty pharmacy)— (aa) whether such drug is a brand name drug or a generic drug, and— (AA) in the case of a brand name drug, the wholesale acquisition cost, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and (BB) in the case of a generic drug, the average wholesale price, listed as cost per days supply and cost per dosage unit, on the date such drug was dispensed; and (bb) the total number of— (AA) prescription claims (including original prescriptions and refills); (BB) participants and beneficiaries for whom a claim for such drug was filed through the applicable dispensing channel; (CC) dosage units and dosage units per fill of such drug; and (DD) days supply of such drug per fill; (VII) the net price per course of treatment or single fill, such as a 30-day supply or 90-day supply to the plan after rebates, fees, alternative discounts, or other remuneration received from applicable entities; (VIII) the total amount of out-of-pocket spending by participants and beneficiaries on such drug, including spending through copayments, coinsurance, and deductibles, but not including any amounts spent by participants and beneficiaries on drugs not covered under the plan, or for which no claim is submitted under the plan; (IX) the total net spending on the drug; (X) the total amount received, or expected to be received, by the plan from any applicable entity in rebates, fees, alternative discounts, or other remuneration; (XI) the total amount received, or expected to be received, by the entity providing pharmacy benefit management services, from applicable entities, in rebates, fees, alternative discounts, or other remuneration from such entities— (aa) for claims incurred during the reporting period; and (bb) that is related to utilization of such drug or spending on such drug; and (XII) to the extent feasible, information on the total amount of remuneration for such drug, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copayment assistance on behalf of such drug manufacturer), to the participants and beneficiaries enrolled in such plan; (ii) a list of each therapeutic class (as defined by the Secretary) for which a claim was filed under the group health plan during the reporting period, and, with respect to each such therapeutic class— (I) the total gross spending on drugs in such class before rebates, price concessions, alternative discounts, or other remuneration from applicable entities; (II) the net spending in such class after such rebates, price concessions, alternative discounts, or other remuneration from applicable entities; (III) the total amount received, or expected to be received, by the entity providing pharmacy benefit management services, from applicable entities, in rebates, fees, alternative discounts, or other remuneration from such entities— (aa) for claims incurred during the reporting period; and (bb) that is related to utilization of drugs or drug spending; (IV) the average net spending per 30-day supply and per 90-day supply by the plan and its participants and beneficiaries, among all drugs within the therapeutic class for which a claim was filed during the reporting period; (V) the number of participants and beneficiaries who filled a prescription for a drug in such class, including the National Drug Code for each such drug; (VI) if applicable, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that class; and (VII) the total out-of-pocket spending under the plan by participants and beneficiaries, including spending through copayments, coinsurance, and deductibles, but not including any amounts spent by participants and beneficiaries on drugs not covered under the plan or for which no claim is submitted under the plan; (iii) with respect to any drug for which gross spending under the group health plan exceeded $10,000 during the reporting period or, in the case that gross spending under the group health plan exceeded $10,000 during the reporting period with respect to fewer than 50 drugs, with respect to the 50 prescription drugs with the highest spending during the reporting period— (I) a list of all other drugs in the same therapeutic class as such drug; (II) if applicable, the rationale for the formulary placement of such drug in that therapeutic category or class, selected from a list of standard rationales established by the Secretary, in consultation with stakeholders; and (III) any change in formulary placement compared to the prior plan year; and (iv) in the case that such plan (or an entity providing pharmacy benefit management services on behalf of such plan) has an affiliated pharmacy or pharmacy under common ownership, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost sharing assistance incentives funded by an entity providing pharmacy benefit services— (I) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in the plan to fill prescriptions at mail order, specialty, or retail pharmacies; (II) the percentage of total prescriptions dispensed by such pharmacies to participants or beneficiaries in such plan; and (III) a list of all drugs dispensed by such pharmacies to participants or beneficiaries enrolled in such plan, and, with respect to each drug dispensed— (aa) the amount charged, per dosage unit, per 30-day supply, or per 90-day supply (as applicable) to the plan, and to participants and beneficiaries; (bb) the median amount charged to such plan, and the interquartile range of the costs, per dosage unit, per 30-day supply, and per 90-day supply, including amounts paid by the participants and beneficiaries, when the same drug is dispensed by other pharmacies that are not affiliated with or under common ownership with the entity and that are included in the pharmacy network of such plan; (cc) the lowest cost per dosage unit, per 30-day supply and per 90-day supply, for each such drug, including amounts charged to the plan and to participants and beneficiaries, that is available from any pharmacy included in the network of such plan; and (dd) the net acquisition cost per dosage unit, per 30-day supply, and per 90-day supply, if such drug is subject to a maximum price discount; and (B) with respect to any group health plan, regardless of whether the plan is offered by a specified large employer or whether it is a specified large plan— (i) a summary document for the group health plan that includes such information described in clauses (i) through (iv) of subparagraph (A), as specified by the Secretary through guidance, program instruction, or otherwise (with no requirement of notice and comment rulemaking), that the Secretary determines useful to group health plans for purposes of selecting pharmacy benefit management services, such as an estimated net price to group health plan and participant or beneficiary, a cost per claim, the fee structure or reimbursement model, and estimated cost per participant or beneficiary; (ii) a summary document for plans to provide to participants and beneficiaries, which shall be made available to participants or beneficiaries upon request to their group health plan, that— (I) contains such information described in clauses (iii), (iv), (v), and (vi), as applicable, as specified by the Secretary through guidance, program instruction, or otherwise (with no requirement of notice and comment rulemaking) that the Secretary determines useful to participants or beneficiaries in better understanding the plan or benefits under such plan; (II) contains only aggregate information; and (III) states that participants and beneficiaries may request specific, claims-level information required to be furnished under subsection (c) from the group health plan; and (iii) with respect to drugs covered by such plan during such reporting period— (I) the total net spending by the plan for all such drugs; (II) the total amount received, or expected to be received, by the plan from any applicable entity in rebates, fees, alternative discounts, or other remuneration; and (III) to the extent feasible, information on the total amount of remuneration for such drugs, including copayment assistance dollars paid, copayment cards applied, or other discounts provided by each drug manufacturer (or entity administering copayment assistance on behalf of such drug manufacturer) to participants and beneficiaries; (iv) amounts paid directly or indirectly in rebates, fees, or any other type of compensation (as defined in section 408(b)(2)(B)(ii)(dd)(AA) of the Employee Retirement Income Security Act (29 U.S.C. 1108(b)(2)(B)(ii)(dd)(AA))) to brokerage firms, brokers, consultants, advisors, or any other individual or firm, for— (I) the referral of the group health plan's business to an entity providing pharmacy benefit management services, including the identity of the recipient of such amounts; (II) consideration of the entity providing pharmacy benefit management services by the group health plan; or (III) the retention of the entity by the group health plan; (v) an explanation of any benefit design parameters that encourage or require participants and beneficiaries in such plan to fill prescriptions at mail order, specialty, or retail pharmacies that are affiliated with or under common ownership with the entity providing pharmacy benefit management services under such plan, including mandatory mail and specialty home delivery programs, retail and mail auto-refill programs, and cost-sharing assistance incentives directly or indirectly funded by such entity; and (vi) total gross spending on all drugs under the plan during the reporting period.