[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2247 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
1st Session
S. 2247
To amend titles XI and XVIII of the Social Security Act to provide
greater transparency of discounts provided by drug manufacturers, to
establish requirements relating to pharmacy-negotiated price
concessions, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 24, 2019
Mr. Kennedy (for himself, Mr. Tester, Mrs. Capito, Mr. Brown, Mr.
Cassidy, Mr. Lankford, Mr. Daines, Mr. Cramer, Mrs. Hyde-Smith, Mr.
Manchin, and Mr. Wicker) introduced the following bill; which was read
twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend titles XI and XVIII of the Social Security Act to provide
greater transparency of discounts provided by drug manufacturers, to
establish requirements relating to pharmacy-negotiated price
concessions, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Phair Relief Act of 2019''.
SEC. 2. PUBLIC DISCLOSURE OF DRUG DISCOUNTS.
(a) In General.--Section 1150A of the Social Security Act (42
U.S.C. 1320b-23) is amended--
(1) in subsection (c), in the matter preceding paragraph
(1), by striking ``this section'' and inserting ``subsection
(b)(1)''; and
(2) by adding at the end the following new subsection:
``(e) Public Availability of Certain Information.--In order to
allow patients and employers to compare PBMs' ability to negotiate
rebates, discounts, and price concessions and the amount of such
rebates, discounts, and price concessions that are passed through to
plan sponsors, beginning January 1, 2020, the Secretary shall make
available on the Internet website of the Department of Health and Human
Services the information provided to the Secretary under paragraphs (2)
and (3) of subsection (b) with respect to each PBM. The Secretary shall
ensure that such information is displayed in a manner that prevents the
disclosure of information on rebates, discounts, and price concessions
with respect to an individual drug or an individual plan.''.
(b) Effective Date.--The amendments made by subsection (a) shall
take effect on January 1, 2020.
SEC. 3. MINIMUM DRUG DISCOUNTS REQUIRED TO BE PASSED THROUGH TO THE
PLAN SPONSOR.
(a) In General.--Section 1150A of the Social Security Act (42
U.S.C. 1320b-23), as amended by section 2(a)(2), is amended--
(1) in the heading, by inserting ``; minimum drug discounts
required to be passed through to the plan sponsor'' before the
period at the end; and
(2) by adding at the end the following new subsection:
``(f) Minimum Drug Discounts Required To Be Passed Through to the
Plan Sponsor.--
``(1) Requirement.--Beginning January 1, 2022, a PBM that
manages prescription drug coverage under a contract with a PDP
sponsor or MA organization described in subsection (b)(1) or a
qualified health benefits plan described in subsection (b)(2),
shall, with respect to the plan sponsor of a health benefits
plan, pass through to the plan sponsor a minimum percent (as
established by the Secretary) of the aggregate amount of the
rebates, discounts, or price concessions that the PBM
negotiates that are attributable to patient utilization under
the plan.
``(2) Establishment.--The Secretary shall establish the
minimum percent described in paragraph (1) in such a manner as
will ensure that patients receive the maximum benefit of
rebates, discounts, or price concessions while taking into
account the costs of negotiating such rebates, discounts, and
price concessions.
``(3) Enforcement.--A PDP sponsor of a prescription drug
plan or an MA organization offering an MA-PD plan under part D
of title XVIII may not contract with a PBM that is not in
compliance with the requirement under paragraph (1).''.
(b) Effective Date.--The amendments made by subsection (a) shall
take effect on January 1, 2022.
SEC. 4. REQUIREMENTS RELATING TO PHARMACY-NEGOTIATED PRICE CONCESSIONS
AND PHARMACY INCENTIVE PAYMENTS.
Section 1860D-2(d)(1)(B) of the Social Security Act (42 U.S.C.
1395w-102(d)(1)(B)) is amended--
(1) by striking ``prices.--For purposes'' and inserting
``prices.--
``(i) In general.--For purposes''; and
(2) by adding at the end the following new clauses:
``(ii) Prices negotiated with pharmacy at
point-of-sale.--
``(I) Temporary freeze on dir
payments.--Subject to subclause (IV),
for plan years beginning on or after
January 1, 2021, and before January 1,
2026, negotiated prices for covered
part D drugs described in clause (i)
provided under all phases of coverage
under a prescription drug plan,
including all contingent and
noncontingent concessions, payments,
and fees negotiated with the pharmacy
dispensing such drug, shall be provided
at the point-of-sale of such drug. For
purposes of the preceding sentence,
such negotiated price shall not include
any incentive payments paid to
pharmacies.
``(II) Application of price
concessions.--For plan years beginning
on or after January 1, 2026, the
Secretary shall promulgate regulations
prohibiting the application of any
pharmacy price concessions that are not
based on quality measures established
or approved by the Secretary under
subclause (III).
``(III) Standard pharmacy quality
measures.--Subject to subclause (I),
not later than January 1, 2021, the
Secretary shall establish or approve
standard quality measures for use in
the application of pharmacy price
concessions and incentive payments with
respect to payment for covered part D
drugs dispensed by a pharmacy. Such
measures shall be--
``(aa) focused on improving
patient health outcomes;
``(bb) standardized across
PDP sponsors;
``(cc) pharmacy-specific in
application;
``(dd) relevant to the type
of pharmacy concerned (such as
specialty pharmacies), taking
into account the items and
services furnished by the
pharmacy and the patient
population served by the
pharmacy;
``(ee) applied only when
relevant to the specific drug
(or drug class of such drug)
being furnished by the pharmacy
or when relevant to management
of the condition for which such
drug has been prescribed; and
``(ff) based on achievable
and proven criteria measuring
pharmacy performance over which
the pharmacy has meaningful
control and ability to
influence.
In establishing such standards, the
Secretary shall consult with
stakeholders, including PDP sponsors
and MA organizations, pharmacies across
pharmacy practice types, pharmacy
benefit managers, patient advocacy
organizations, drug manufacturers,
appropriate standard-setting
organizations, professional pharmacy
organizations, and other entities
determined appropriate by the
Secretary. The Secretary shall review
and update the standard pharmacy
quality measures on an ongoing basis
with appropriate notice and period for
comments from stakeholders.
``(IV) No increase in cost sharing
during temporary freeze.--Subclause (I)
shall not apply in the case where
application of such subclause would
increase the amount owed by an
individual in cost sharing above the
amount such individual would have owed
in cost sharing without application of
such subclause.
``(V) Discrepancies between
negotiated prices and actual
reimbursement.--In the case that the
Secretary determines that the
negotiated price of a PDP sponsor
applied at the point-of-sale with
respect to a covered part D drug for a
year dispensed by a pharmacy was
greater than the total reimbursement
made to such pharmacy for such drug for
such year, such sponsor shall, not
later than 90 days after receiving
notice of such determination, furnish
to the pharmacy that dispensed such
drug and to the Secretary a written
explanation of why such negotiated
price was greater than such
reimbursement.
``(VI) Specialty pharmacy.--For
purposes of carrying out this clause
(including subclause (III)(dd)), the
Secretary shall, not later than
December 31, 2020, define the term
`specialty pharmacy' in consultation
with relevant stakeholders.
``(VII) Definitions.--In this
clause:
``(aa) Quality measure.--
The term `quality measure'
means criteria used by a PDP
sponsor (including an entity
that contracts with such
sponsor, such as a pharmacy
benefit manager) to determine
the amount or applicability of
incentive payments and pharmacy
price concessions.
``(bb) PDP sponsor.--The
term `PDP sponsor' includes an
MA organization offering an MA-
PD plan under part C and an
entity that contracts with such
sponsor or organization, such
as a pharmacy benefit manager.
``(iii) Audits of pdp sponsors and
negotiated price.--
``(I) In general.--Beginning
January 1, 2021, the Secretary shall
conduct annual audits of PDP sponsors
by reviewing a representative sample of
claims between PDP sponsors or other
intermediary contracting organizations
and all pharmacy types and those
pharmacies' lowest actual acquisition
and dispensing costs to assess whether
reimbursement for individual network
pharmacies is below the pharmacy's
lowest actual cost of acquiring and
dispensing covered part D drugs and
providing pharmacy services necessary
for dispensing such drugs. In
conducting such audits, the Secretary
shall focus on determining whether or
not the requirements under clause (ii)
are negatively impacting network
pharmacy participation in the program
under this part and beneficiary access
to pharmacy providers. Such audits
shall occur not less than annually and
when requested by the Medicare
Pharmaceutical and Technology
Ombudsman.
``(II) Appeal.--If a network
pharmacy believes that a PDP sponsor
has reimbursed for a covered part D
drug below the pharmacy's lowest actual
acquisition and dispensing costs, the
pharmacy may appeal the reimbursement,
in writing, to the Medicare
Pharmaceutical and Technology Ombudsman
within 60 days following notification
of the reimbursement and provide
necessary documentation to support its
claim.
``(III) Annual report to
congress.--Not later than January 1,
2022, and annually thereafter, the
Secretary shall submit to Congress a
report that contains a summary of the
audits conducted under subclause (I)
and activity under subclause (II),
together with recommendations for such
legislation and administrative action
as the Secretary determines
appropriate.
``(iv) Claim reimbursement disclosure
requirements.--With respect to payment made by
a PDP sponsor to a pharmacy for a covered part
D drug furnished by such pharmacy during a plan
year beginning on or after January 1, 2020,
such sponsor shall promptly furnish all pricing
components including the Network Reimbursement
ID used to price the claim, any fees, pharmacy
price concessions, discounts, incentives or any
other forms of remuneration to or from the
pharmacy that affect payment and pricing of the
claim as part of the claim adjudication
response at the point-of-sale. Each of the
aforementioned data elements shall each be
identified in a predetermined line item in the
remittance advice that is standard across the
industry, which shall include suitable claim-
level detail needed to properly identify the
claim, including the Claim Authorization
Number, date of service, date of payment
remittance, ingredient cost reimbursed,
dispensing fee reimbursed, payment amounts
including the specific dollar amounts and the
appropriate qualifier codes for each payment
adjustment including fees, pharmacy price
concessions, or incentives.
``(v) Violation process.--A PDP sponsor
shall participate in any process established by
the Secretary for purposes of determining
whether such sponsor has violated a provision
of clause (ii) or (iii).''.
SEC. 5. PHARMACY BENEFIT MANAGER PROVISION OF INFORMATION.
(a) In General.--Section 1150A(b)(2) of the Social Security Act (42
U.S.C. 1320b-23(b)(2)) is amended by striking ``excluding'' and
inserting ``including''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply with respect to contract years beginning on or after January 1,
2020.
<all>