Sec. 401. Health plan oversight of pharmacy benefit manager services

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Subpart II of part A of title XXVII of the Public Health Service Act ( 42 U.S.C. 300gg–11 et seq. ) is amended by adding at the end the following: A group health plan or health insurance issuer offering group or individual health insurance coverage or an entity or subsidiary providing pharmacy benefits management services shall not enter into a contract with a drug manufacturer, distributor, wholesaler, subcontractor, rebate aggregator, or any associated third party that limits the disclosure of information to plan sponsors in such a manner that prevents the plan or coverage, or an entity or subsidiary providing pharmacy benefits management services on behalf of a plan or coverage from making the reports described in subsection (b).

Beginning with the first plan year that begins after the date of enactment of this section, not less frequently than once every six months, a health insurance issuer offering group health insurance coverage or an entity providing pharmacy benefits management services on behalf of a group health plan shall submit to the self-funded group health plan and at the request of any other group health plan a report in accordance with this subsection and make such report available to the plan sponsor in a machine-readable format.

Each such report shall include, with respect to the applicable group health plan or health insurance coverage— information collected from drug manufacturers by such issuer or entity on the total amount of copayment assistance dollars paid, or copayment cards applied, that were funded by the drug manufacturer with respect to the enrollees in such plan or coverage; a list of each covered drug dispensed during the reporting period, including, with respect to each such drug during the reporting period— the brand name, chemical entity, and National Drug Code; the number of enrollees for whom the drug was filled during the plan year, the total number of prescription fills for the drug (including original prescriptions and refills), and the total number of dosage units of the drug dispensed across the plan year, including whether the dispensing channel was by retail, mail order, or specialty pharmacy; the wholesale acquisition cost, listed as cost per days supply and cost per pill, or in the case of a drug in another form, per dose; the total out-of-pocket spending by enrollees on such drug, including enrollee spending through copayments, coinsurance, and deductibles; and for any drug for which gross spending of the group health plan or health insurance coverage exceeded $10,000 during the reporting period— a list of all other available drugs in the same therapeutic category or class, including brand name drugs and biological products and generic drugs or biosimilar biological products that are in the same therapeutic category or class; and the rationale for preferred formulary placement of a particular drug or drugs in that therapeutic category or class; a list of each therapeutic category or class of drugs that were dispensed under the health plan or health insurance coverage during the reporting period, and, with respect to each such therapeutic category or class of drugs, during the reporting period— total gross spending by the plan, before manufacturer rebates, fees, or other manufacturer remuneration; the number of enrollees who filled a prescription for a drug in that category or class; if applicable to that category or class, a description of the formulary tiers and utilization mechanisms (such as prior authorization or step therapy) employed for drugs in that category or class; the total out-of-pocket spending by enrollees, including enrollee spending through copayments, coinsurance, and deductibles; and for each therapeutic category or class under which three or more drugs are marketed and available— the amount received, or expected to be received, from drug manufacturers in rebates, fees, alternative discounts, or other remuneration— to be paid by drug manufacturers for claims incurred during the reporting period; or that is related to utilization of drugs, in such therapeutic category or class; the total net spending by the health plan or health insurance coverage on that category or class of drugs; and the net price per dosage unit or course of treatment incurred by the health plan or health insurance coverage and its enrollees, after manufacturer rebates, fees, and other remuneration for drugs dispensed within such therapeutic category or class during the reporting period; total gross spending on prescription drugs by the plan or coverage during the reporting period, before rebates and other manufacturer fees or remuneration; total amount received, or expected to be received, by the health plan or health insurance coverage in drug manufacturer rebates, fees, alternative discounts, and all other remuneration received from the manufacturer or any third party related to utilization of drug or drug spending under that health plan or health insurance coverage during the reporting period; the total net spending on prescription drugs by the health plan or health insurance coverage during the reporting period; and amounts paid directly or indirectly in rebates, fees, or any other type of remuneration to brokers, consultants, advisors, or any other individual or firm who referred the group health plan's or health insurance issuer's business to the pharmacy benefit manager.

Health insurance issuers offering group health insurance coverage and entities providing pharmacy benefits management services on behalf of a group health plan shall provide information under paragraph

(1)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 (or successor regulations), and shall restrict the use and disclosure of such information according to such privacy regulations. A group health plan receiving a report under paragraph

(1)may disclose such information only to business associates of such plan as defined in section 160.103 of title 45, Code of Federal Regulations (or successor regulations). Nothing in this section prevents a health insurance issuer offering group health insurance coverage or an entity providing pharmacy benefits management services on behalf of a group health plan from placing reasonable restrictions on the public disclosure of the information contained in a report described in paragraph (1). The Secretary, in consultation with the Secretary of Labor and the Secretary of the Treasury, shall enforce this section. A health insurance issuer or an entity providing pharmacy benefit management services that violates subsection

(a)or fails to provide information required under subsection

(b)or a drug manufacturer that fails to provide information under subsection (b)(1)(A), in a timely manner 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. A health insurance issuer, entity providing pharmacy benefit management services, or drug manufacturer that knowingly provides false information under this section shall be subject to a civil money penalty in an amount not to exceed $100,000 for each item of false information. Such civil money penalty shall be in addition to other penalties as may be prescribed by law. The provisions of section 1128A of the Social Security Act, other than subsections

(a)and

(b)and the first sentence of subsection (c)(1) of such section shall apply to civil monetary penalties under this subsection in the same manner as such provisions apply to a penalty or proceeding under section 1128A of the Social Security Act. The Secretary may waive penalties under paragraph (2), or extend the period of time for compliance with a requirement of this section, for an entity in violation of this section that has made a good-faith effort to comply with this section. Nothing in this section shall be construed to prohibit entities providing pharmacy benefits management services from retaining bona fide service fees, provided that such fees are transparent to group health plans and health insurance issuers and are not linked directly to the price or formulary placement or position of a drug. In this section— the term similarly situated pharmacy means, with respect to a particular pharmacy, another pharmacy that is approximately the same size (as measured by the number of prescription drugs dispensed), and that serves patients in the same geographical area, whether through physical locations or mail order; the term wholesale acquisition cost has the meaning given such term in section 1847A(c)(6)(B) of the Social Security Act; and the term bona fide service fees means fees paid by a manufacturer, customer, or client (other than a group health plan or health insurance issuer) of an entity providing pharmacy benefit management services, to an entity providing pharmacy benefit management services, that represent fair market value for bona fide, itemized services actually performed on behalf of the manufacturer, customer, or client would otherwise perform or contract for in the absence of the service arrangement, without prior consent for any specific arrangements. .

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42 USC 300gg–11

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Sec. 401

Health plan oversight of pharmacy benefit manager services

Cite42 USC 300gg–11

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