Sec. 201. Assuring pharmacy access and choice for Medicare beneficiaries

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Section 1860D–4(b)(1) of the Social Security Act ( 42 U.S.C. 1395w–104(b)(1) ) is amended by striking subparagraph

(A)and inserting the following: A PDP sponsor offering a prescription drug plan shall permit any pharmacy that meets the standard contract terms and conditions under such plan to participate as a network pharmacy of such plan. For plan years beginning on or after January 1, 2028, in accordance with clause (i), contract terms and conditions offered by such PDP sponsor shall be reasonable and relevant according to standards established by the Secretary under subclause (II). Not later than the first Monday in April of 2027, the Secretary shall establish standards for reasonable and relevant contract terms and conditions for purposes of this clause. Not later than January 1, 2025, for purposes of establishing the standards under subclause (II), the Secretary shall issue a request for information to seek input on trends in prescription drug plan and network pharmacy contract terms and conditions, current prescription drug plan and network pharmacy contracting practices, whether pharmacy reimbursement and dispensing fees under this part cover pharmacy ingredient and operational costs, areas in current regulations or program guidance related to contracting between prescription drug plans and network pharmacies requiring clarification or additional specificity, factors for consideration in determining the reasonableness and relevance of contract terms and conditions between prescription drug plans and network pharmacies, and other issues determined appropriate by the Secretary. . Section 1860D–4(b)(1)(C) of the Social Security Act ( 42 U.S.C. 1395w–104(b)(1)(C) ) is amended by adding at the end the following new clause: For plan years beginning on or after January 1, 2028, a PDP sponsor of a prescription drug plan that has preferred pharmacies in its network shall contract with, as preferred pharmacies in such plan’s network, at least— 80 percent of essential retail pharmacies (as defined in subclause (III)) in such plan’s service area that are independent community pharmacies (as defined in subclause (V)(bb)); and 50 percent of essential retail pharmacies in such plan’s service area not described in item (aa). For plan years beginning on or after January 1, 2028, total reimbursement (as defined in subclause (V)(dd)) paid by a PDP sponsor to an essential retail pharmacy that is an independent community pharmacy for a covered part D drug shall not be lower than— in the case where National Average Drug Acquisition Cost information for such drug for retail community pharmacies or applicable non-retail community pharmacies has been available under section 1927(f) for at least one full plan year— if such information is available for such drug for retail community pharmacies, the average National Average Drug Acquisition Cost for such drug for retail community pharmacies for the most recent plan year for which such information is available; in the case where such information for retail community pharmacies is not available, the average National Average Drug Acquisition Cost for such drug for applicable non-retail pharmacies for the most recent plan year for which such information is available; in the case where National Average Drug Acquisition Cost information for such drug under section 1927(f) is not available for retail community pharmacies or applicable non-retail pharmacies, the wholesale acquisition cost (as defined in section 1847A(c)(6)(B)) for such drug; and in the case where National Average Drug Acquisition Cost information under section 1927(f) is available for such drug and ending on the date such survey information has been available for such drug but has not been available for a full plan year— the most recent National Average Drug Acquisition Cost for such drug for retail community pharmacies, if available; or if the information specified in subitem

(AA)is not available, the most recent National Average Drug Acquisition Cost for such drug for applicable non-retail pharmacies. In this clause, the term essential retail pharmacy means, with respect to a plan year, a retail pharmacy that— is not an affiliate of a pharmacy benefit manager or PDP sponsor; is located in a medically underserved area (as designated pursuant to section 330(b)(3)(A) of the Public Health Service Act); and is designated as an essential retail pharmacy by the Secretary for such plan year under subclause (IV). For each plan year (beginning with plan year 2028), the Secretary shall designate pharmacies that meet the requirements specified in items

(aa)and

(bb)of subclause

(III)as essential retail pharmacies, in accordance with this subclause. For each plan year beginning with plan year 2028, each PDP sponsor offering a prescription drug plan shall submit to the Secretary, for the purposes of determining retail pharmacies that do not meet the requirement specified in item

(aa)of subclause (III), a list of any retail pharmacy that is an affiliate of such sponsor, subject to time, manner, and form requirements established by the Secretary. Not later than one month prior to the start of each plan year (beginning with plan year 2028), the Secretary shall list, on a publicly available website of the Centers for Medicare & Medicaid Services, all pharmacies designated as essential retail pharmacies for such plan year. In the case where, during a plan year, the Secretary determines that a pharmacy no longer meets the requirements for designation as an essential retail pharmacy, the Secretary may revoke such designation for such pharmacy, as determined appropriate by the Secretary. In this clause: The term affiliate means any entity that is owned by, controlled by, or related under a common ownership structure with a pharmacy benefit manager or PDP sponsor or that acts as a contractor or agent to such pharmacy benefit manager or PDP sponsor, if such contractor or agent performs any of the functions described in item (cc). The term independent community pharmacy means a retail pharmacy, including a pharmacy that is associated with a franchise or a pharmacy services administrative organization, that has fewer than 4 locations and is not affiliated with any person or entity other than its owners. The term pharmacy benefit manager means any person or entity that, either directly or through an intermediary, acts as a price negotiator or group purchaser on behalf of a PDP sponsor or prescription drug plan, or manages the prescription drug benefits provided by such sponsor or plan, including the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to the prescription drug benefit, contracting with network pharmacies, controlling the cost of covered part D drugs, or the provision of related services. Such term includes any person or entity that carries out one or more of the activities described in the preceding sentence, irrespective of whether such person or entity identifies itself as a pharmacy benefit manager . The term total reimbursement means, with respect to a covered part D drug, the negotiated price (as defined in section 1860D–2(d)(1)(B)) plus any incentive payments paid by the PDP sponsor to such essential retail pharmacy that is an independent community pharmacy net of any fees, pharmacy price concessions, discounts, or any other forms of remuneration paid by such pharmacy and furnished by such PDP sponsor under section 1860D–2(f)(4). . Section 1860D–4(b)(1) of the Social Security Act ( 42 U.S.C. 1395w–104(b)(1) ) is amended by adding at the end the following new subparagraph: Not later than January 1, 2028, the Secretary shall establish a process through which a pharmacy may submit an allegation of a violation by a PDP sponsor offering a prescription drug plan of— the standards for reasonable and relevant contract terms and conditions under subparagraph (A)(ii); or the requirements for total reimbursement for essential retail pharmacies that are independent community pharmacies under subparagraph (C)(v)(II). Except as provided in subitem (BB), the allegation submission process under this clause shall allow pharmacies to submit any allegations of violations described in item

(aa)of subclause

(I)not more frequently than once per plan year per contract between a pharmacy and a PDP sponsor. In the case where a contract is amended or otherwise updated following the submission of allegations by a pharmacy with respect to such contract and plan year, the allegation submission process under this clause shall allow such pharmacy to submit an additional allegation related to those changes with respect to such contract and plan year. Submissions of any allegations under this item shall be separate from any submissions under item

(bb)and may include multiple allegations of such violations. The allegation submission process under this clause shall allow essential retail pharmacies that are independent community pharmacies to submit any allegations of violations described in item

(bb)of subclause

(I)once per calendar quarter. Submissions of any allegations under this item shall be separate from any submissions under item

(aa)and may include multiple allegations of such violations. A PDP sponsor subject to an allegation under this clause— shall provide documents or materials, as specified by the Secretary, including contract offers made by such sponsor to such pharmacy or correspondence related to such offers, to the Secretary at a time and in a form and manner specified by the Secretary; and shall not prohibit or otherwise limit the ability of a pharmacy to submit such documents or materials to the Secretary for the purpose of submitting an allegation or providing evidence for such an allegation under this clause. The Secretary shall establish separate standardized templates for pharmacies to use for the submission of allegations described in items

(aa)and

(bb)of subclause (I). Each such template shall require that the submission include a certification by the pharmacy that the information included is accurate, complete, and true to the best of the knowledge, information, and belief of such pharmacy. In the case where the Secretary determines that a pharmacy has submitted frivolous allegations under this clause on a routine basis, the Secretary may temporarily prohibit such pharmacy from using the allegation submission process under this clause, as determined appropriate by the Secretary. Allegations submitted under this clause shall be exempt from disclosure under section 552 of title 5, United States Code. The Secretary shall investigate, as determined appropriate by the Secretary, allegations submitted pursuant to clause (i). In the case where the Secretary determines that a PDP sponsor offering a prescription drug plan has violated the standards for reasonable and relevant contract terms and conditions under subparagraph (A)(ii), the Secretary shall use existing authorities under sections 1857(g) and 1860D–12(b)(3)(E) to impose civil monetary penalties or take other enforcement actions. In the case where the Secretary determines that a PDP sponsor offering a prescription drug plan has violated the requirements for total reimbursement for essential retail pharmacies that are independent community pharmacies under subparagraph (C)(v)(II), the Secretary shall— if the amount of total reimbursement paid by the sponsor to an essential retail pharmacy that is an independent community pharmacy for a covered part D drug was less than the amount of total reimbursement required to be paid to the pharmacy under subparagraph (C)(v)(II) for such drug, require the PDP sponsor to pay to the pharmacy an amount equal to the difference between such amounts; and use existing authorities under section 1857(g) and 1860D–12(b)(3)(E) to impose civil monetary penalties or take other enforcement actions. The provisions of section 1128A (other than subsections

(a)and (b)) shall apply to a civil monetary penalty under this clause in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). In this subparagraph, the terms essential retail pharmacy , independent community pharmacy , and total reimbursement have the meaning given those terms in subparagraph (C)(v). . Section 1857(g)(1) of the Social Security Act ( 42 U.S.C. 1395w–27(g)(1) ) is amended— in subparagraph (J), by striking or after the semicolon; by redesignating subparagraph

(K)as subparagraph (L); by inserting after subparagraph (J), the following new subparagraph: fails to comply with— the standards for reasonable and relevant contract terms and conditions under subparagraph (A)(ii) of section 1860D–4(b)(1); or the requirements for total reimbursement for essential retail pharmacies that are independent community pharmacies under subparagraph (C)(v)(II) of such section; or ; in subparagraph (L), as redesignated by subparagraph (B), by striking through

(J)and inserting through

(K); and in the flush matter following subparagraph (L), as so redesignated, by striking subparagraphs

(A)through

(K)and inserting subparagraphs

(A)through

(L). Section 1860D–12(b) of the Social Security Act ( 42 U.S.C. 1395w–112 ) is amended by adding at the end the following new paragraph: For plan years beginning on or after January 1, 2028, each contract entered into with a PDP sponsor under this part with respect to a prescription drug plan offered by such sponsor shall provide that any pharmacy benefit manager acting on behalf of such sponsor has a written agreement with the PDP sponsor under which the pharmacy benefit manager agrees to reimburse the PDP sponsor for any amounts paid by such sponsor under subclause

(I)or

(II)of section 1860D–4(b)(1)(F)(iii) as a result of a violation described in such subclause

(I)or

(II)if such violation is related to a responsibility delegated to the pharmacy benefit manager by such PDP sponsor. . Section 1857(f)(3) of the Social Security Act ( 42 U.S.C. 1395w–27(f)(3) ) is amended by adding at the end the following new subparagraph: For plan years beginning on or after January 1, 2028, section 1860D–12(b)(9). . Section 1860D–42 of the Social Security Act ( 42 U.S.C. 1395w–152 ) is amended by adding at the end the following new subsection: The Secretary shall provide periodic briefings to the Committee on Finance of the Senate, the Committee on Ways and Means of the House of Representatives, and the Committee on Energy and Commerce of the House of Representatives, beginning not later than 90 days after the date of enactment of this subsection, on implementation, oversight, data collection, and enforcement activities related to the administration of the Pharmacy Price Concessions to Drug Prices at the Point of Sale provisions codified under sections 423.100 and 423.2305 of title 42, Code of Federal Regulations (or any successor regulations), as published in the Federal Register on May 9, 2022, in the final rule entitled Medicare Program; Contract Year 2023 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs; Policy and Regulatory Revisions in Response to the COVID–19 Public Health Emergency; Additional Policy and Regulatory Revisions in Response to the COVID–19 Public Health Emergency . Beginning not later than 90 days after the date of enactment of this subsection, and at least once every plan year beginning thereafter (through plan year 2027), the Secretary shall develop and submit to Congress reports on the activities specified in paragraph (1). The briefings required under paragraph

(1)and reports required under paragraph

(2)shall include information on— implementation, oversight, data collection, and enforcement activities related to contract terms and conditions among PDP sponsors, MA organizations, and pharmacies for the purpose of establishing or maintaining pharmacy network participation or preferred pharmacy network participation; patterns and trends in such terms and conditions, to the extent applicable; implementation, oversight, and enforcement activities and developments related to assuring pharmacy access under section 1860D–4(b)(1), along with applicable regulations and program instruction or guidance; plans, strategies, initiatives, or programmatic changes undertaken by the Secretary to prevent, mitigate, or otherwise address stakeholder feedback and concerns related to convenient pharmacy access for beneficiaries under this part; and other issues determined appropriate by the Secretary. . In addition to amounts otherwise available, there is appropriated to the Centers for Medicare & Medicaid Services Program Management Account, out of any money in the Treasury not otherwise appropriated, $250,000,000 for fiscal year 2024, to remain available until expended, to carry out the amendment made by this section.

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42 USC 1395w–104(b)(1)
42 USC 1395w–104(b)(1)(C)
42 USC 1395w–27(g)(1)
42 USC 1395w–112
42 USC 1395w–27(f)(3)
42 USC 1395w–152

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cites case law

Sec. 201

Assuring pharmacy access and choice for Medicare beneficiaries

Cite42 USC 1395w–104(b)(1)

Cite42 USC 1395w–104(b)(1)(C)

Cite42 USC 1395w–27(g)(1)

Cite42 USC 1395w–112

Cite42 USC 1395w–27(f)(3)

Cites 6 · showing 5Cited by 0 across 0 sources