Sec. 226. 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. Notwithstanding any other provision of law, 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 April 1, 2026, 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 paid by PDP sponsors to network pharmacies sufficiently cover the ingredient and operational costs of such pharmacies, the use and application of pharmacy quality measures by PDP sponsors for network pharmacies, PDP sponsor restrictions or limitations on the dispensing of covered part D drugs by network pharmacies (or any subsets of such pharmacies), PDP sponsor auditing practices for network pharmacies, 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 as determined appropriate by the Secretary. . 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: With respect to plan years beginning on or after January 1, 2028, the Secretary shall publish reports, at least once every 2 years until 2034, and periodically thereafter, that provide information, to the extent feasible, on— trends in ingredient cost reimbursement, dispensing fees, incentive payments and other fees paid by PDP sponsors offering prescription drug plans and MA organizations offering MA–PD plans under this part to essential retail pharmacies (as defined in paragraph (2)) with respect to the dispensing of covered part D drugs, including a comparison of such trends between essential retail pharmacies and pharmacies that are not essential retail pharmacies; trends in amounts paid to PDP sponsors offering prescription drug plans and MA organizations offering MA–PD plans under this part by essential retail pharmacies with respect to the dispensing of covered part D drugs, including a comparison of such trends between essential retail pharmacies and pharmacies that are not essential retail pharmacies; trends in essential retail pharmacy participation in pharmacy networks and preferred pharmacy networks for prescription drug plans offered by PDP sponsors and MA–PD plans offered by MA organizations under this part, including a comparison of such trends between essential retail pharmacies and pharmacies that are not essential retail pharmacies; trends in the number of essential retail pharmacies, including variation in such trends by geographic region or other factors; a comparison of cost-sharing for covered part D drugs dispensed by essential retail pharmacies that are network pharmacies for prescription drug plans offered by PDP sponsors and MA–PD plans offered by MA organizations under this part and cost-sharing for covered part D drugs dispensed by other network pharmacies for such plans located in similar geographic areas that are not essential retail pharmacies; a comparison of the volume of covered part D drugs dispensed by essential retail pharmacies that are network pharmacies for prescription drug plans offered by PDP sponsors and MA–PD plans offered by MA organizations under this part and such volume of dispensing by network pharmacies for such plans located in similar geographic areas that are not essential retail pharmacies, including information on any patterns or trends in such comparison specific to certain types of covered part D drugs, such as generic drugs or drugs specified as specialty drugs by a PDP sponsor under a prescription drug plan or an MA organization under an MA–PD plan; and a comparison of the information described in subparagraphs

(A)through

(F)between essential retail pharmacies that are network pharmacies for prescription drug plans offered by PDP sponsors under this part and essential retail pharmacies that are network pharmacies for MA–PD plans offered by MA organizations under this part. In this subsection, the term essential retail pharmacy means, with respect to a plan year, a retail pharmacy that— is not a pharmacy that is an affiliate as defined in paragraph (4); and is located in— a medically underserved area (as designated pursuant to section 330(b)(3)(A) of the Public Health Service Act); a rural area in which there is no other retail pharmacy within 10 miles, as determined by the Secretary; a suburban area in which there is no other retail pharmacy within 2 miles, as determined by the Secretary; or an urban area in which there is no other retail pharmacy within 1 mile, as determined by the Secretary. For each plan year (beginning with plan year 2028), the Secretary shall publish, on a publicly available internet website of the Centers for Medicare & Medicaid Services, a list of pharmacies that meet the criteria described in subparagraphs

(A)and

(B)of paragraph

(2)to be considered an essential retail pharmacy. For each plan year (beginning with plan year 2028), each PDP sponsor offering a prescription drug plan and each MA organization offering an MA–PD plan shall submit to the Secretary, for the purposes of determining retail pharmacies that meet the criterion specified in subparagraph

(A)of paragraph (2), a list of retail pharmacies that are affiliates of such sponsor or organization, or are affiliates of a pharmacy benefit manager acting on behalf of such sponsor or organization, at a time, and in a form and manner, specified by the Secretary. For each plan year beginning with plan year 2027, each PDP sponsor offering a prescription drug plan and each MA organization offering an MA–PD plan under this part shall submit to the Secretary information on incentive payments and other fees paid by such sponsor or organization to pharmacies, insofar as any such payments or fees are not otherwise reported, at a time, and in a form and manner, specified by the Secretary. Notwithstanding any other provision of law, the Secretary may implement this paragraph by program instruction or otherwise. Chapter 35 of title 44, United States Code, shall not apply to the implementation of this paragraph. In this subsection, the terms affiliate and pharmacy benefit manager have the meaning given those terms in section 1860D–12(h)(7). . 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 to the Secretary 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 of subclause

(VIII)of this clause. Except as provided in item (bb), the allegation submission process under this clause shall allow pharmacies to submit any allegations of violations described in 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 between a pharmacy and a PDP sponsor is modified 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 modifications with respect to such contract and plan year. 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 a standardized template for pharmacies to use for the submission of allegations described in subclause (I). 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. Nothing in this clause shall be construed as limiting the ability of a pharmacy to pursue other legal actions or remedies, consistent with applicable Federal or State law, with respect to a potential violation of a requirement described in this subparagraph. Consistent with applicable Federal or State law, a PDP sponsor shall not— retaliate against a pharmacy for submitting any allegations under this clause; or coerce, intimidate, threaten, or interfere with the ability of a pharmacy to submit any such allegations. 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 may use authorities under sections 1857(g) and 1860D–12(b)(3)(E) to impose civil monetary penalties or other intermediate sanctions. 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). . 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 ; 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 section 1860D–4(b)(1)(F)(iii)(I) to the Secretary as a result of a violation described in such section 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 ), as amended by subsection (b), is amended by adding at the end the following new subsection: Not later than 2 years after the date of enactment of this subsection, and at least once every 2 years thereafter, the Secretary shall publish a report on enforcement and oversight actions and activities undertaken by the Secretary with respect to the requirements under section 1860D–4(b)(1). A report under paragraph

(1)shall not disclose— identifiable information about individuals or entities unless such information is otherwise publicly available; or trade secrets with respect to any entities. . 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, $188,000,000 for fiscal year 2025, to remain available until expended, to carry out this section.

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

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cites case law

Sec. 226

Assuring pharmacy access and choice for Medicare beneficiaries

Cite42 USC 1395w–104(b)(1)

Cite42 USC 1395w–152

Cite42 USC 1395w–27(g)(1)

Cite42 USC 1395w–112

Cite42 USC 1395w–27(f)(3)

Cites 5Cited by 0 across 0 sources