[Congressional Record Volume 171, Number 132 (Thursday, July 31, 2025)]
[Senate]
[Pages S5126-S5128]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 3384. Mr. GRASSLEY (for himself and Ms. Cantwell) submitted an
amendment intended to be proposed by him to the bill S. 2296, to
authorize appropriations for fiscal year 2026 for military activities
of the Department of Defense, for military construction, and for
defense activities of the Department of Energy, to prescribe military
personnel strengths for such fiscal year, and for other purposes; which
was ordered to lie on the table; as follows:
At the end of subtitle F of title X, add the following:
SEC. 2. PREVENTING UNFAIR AND DECEPTIVE ACTS OR PRACTICES AND
THE DISSEMINATION OF FALSE INFORMATION RELATED
TO PHARMACY BENEFIT MANAGER SERVICES FOR
PRESCRIPTION DRUGS.
(a) Prohibition on Unfair or Deceptive Prescription Drug
Pricing Practices.--
(1) Conduct prohibited.--Except as provided in paragraph
(2), it shall be unlawful for any pharmacy benefit manager
(or affiliate, subsidiary, or agent of a pharmacy benefit
manager), directly or indirectly, to engage in any of the
following activities related to pharmacy benefit management
services:
(A) Charge a health plan or payer a different amount for a
prescription drug's ingredient cost or dispensing fee than
the amount the pharmacy benefit manager reimburses a pharmacy
for the prescription drug's ingredient cost or dispensing fee
where the pharmacy benefit manager retains the amount of any
such difference.
(B) Arbitrarily, unfairly, or deceptively, by contract or
any other means, reduce, rescind, or otherwise claw back any
reimbursement payment, in whole or in part, to a pharmacist
or pharmacy for a prescription drug's ingredient cost or
dispensing fee, unless--
(i) the original claim was submitted fraudulently;
(ii) the original claim payment was inconsistent with the
reimbursement terms in the contract; or
(iii) the pharmacist services were not rendered by the
pharmacy or pharmacist.
(C) Arbitrarily, unfairly, or deceptively, by contract or
any other means, increase fees or lower reimbursement to a
pharmacy in order to offset reimbursement changes instructed
by the Federal Government under any health plan funded by the
Federal Government.
(2) Exceptions.--A pharmacy benefit manager shall not be in
violation of subparagraph (A) or (C) of paragraph (1) if the
pharmacy benefit manager meets the following conditions:
(A) The pharmacy benefit manager, affiliate, subsidiary, or
agent passes along or returns 100 percent of any price
concession to a health plan or payer, including any rebate,
discount, or other price concession.
(B) The pharmacy benefit manager, affiliate, subsidiary, or
agent provides full and complete disclosure of--
(i) the cost, price, and reimbursement of a prescription
drug to each health plan, payer, and pharmacy with which the
pharmacy benefit manager, affiliate, subsidiary, or agent has
a contract or agreement to provide pharmacy benefit
management services;
(ii) each fee, markup, and discount charged or imposed by
the pharmacy benefit manager, affiliate, subsidiary, or agent
to each health plan, payer, and pharmacy with which the
pharmacy benefit manager, affiliate, subsidiary, or agent has
a contract or agreement for pharmacy benefit management
services; or
(iii) the aggregate amount of all remuneration the pharmacy
benefit manager receives from a prescription drug
manufacturer for a prescription drug, including any rebate,
discount, administration fee, and any other payment or credit
obtained or retained by the pharmacy benefit manager, or
affiliate, subsidiary, or agent of the pharmacy benefit
manager, pursuant to a contract or agreement for pharmacy
benefit management services to a health plan, payer, or any
Federal agency (upon the request of the agency).
(b) Prohibition on False Information.--It shall be unlawful
for any person to report information related to pharmacy
benefit management services to a Federal department or agency
if--
(1) the person knew, or reasonably should have known, the
information to be false or misleading;
(2) the information was required by law to be reported; and
(3) the false or misleading information reported by the
person would affect analysis or information compiled by the
Federal department or agency for statistical or analytical
purposes with respect to the market for pharmacy benefit
management services.
(c) Transparency.--
(1) Reporting by pharmacy benefit managers.--Subject to
paragraph (4), not later than 1 year after the date of
enactment of this section, and annually thereafter, each
pharmacy benefit manager (or affiliate, subsidiary, or agent
of a pharmacy benefit manager) shall report to the Commission
and the Secretary of Health and Human Services the following
information:
(A) The aggregate amount of the difference between the
amount the pharmacy benefit manager was paid by each health
plan and the amount that the pharmacy benefit manager paid
each pharmacy on behalf of the health plan for prescription
drugs.
(B) The aggregate amount of any--
(i) generic effective rate fee charged to each pharmacy;
(ii) direct and indirect remuneration fee charged or other
price concession to each pharmacy; and
(iii) payment rescinded or otherwise clawed back from a
reimbursement made to each pharmacy.
(C) If, during the reporting year, the pharmacy benefit
manager moved or reassigned a prescription drug to a
formulary tier that has a higher cost, higher copayment,
higher coinsurance, or higher deductible to a consumer, or a
lower reimbursement to a pharmacy, an explanation of the
reason why the drug was moved or reassigned from 1 tier to
another, including whether the move or reassignment was
determined or requested by a prescription drug manufacturer
or other entity.
(D) With respect to any pharmacy benefit manager that owns,
controls, or is affiliated with a pharmacy, a report
regarding any difference in reimbursement rates or practices,
direct and indirect remuneration fees or other price
concessions, and clawbacks between a pharmacy that is owned,
controlled, or affiliated with the pharmacy benefit manager
and any other pharmacy.
(2) Report to congress.--
(A) In general.--Not later than 1 year after the date of
enactment of this section, and annually thereafter, the
Commission shall submit to the Committee on Commerce,
Science, and Transportation of the Senate and the Committee
on Energy and Commerce of the House of Representatives a
report that addresses, at a minimum--
(i) the number actions brought by the Commission during the
reporting year to enforce this section and the outcome of
each such enforcement action;
(ii) the number of open investigations or inquiries into
potential violations of this section as of the time the
report is submitted;
(iii) the number and nature of complaints received by the
Commission relating to an allegation of a violation of this
section during the reporting year;
(iv) an anonymized summary of the reports filed with the
Commission pursuant to paragraph (1) for the reporting year;
(v) an analysis of the requirements of this section and
whether the implementation of such requirements leads to
mergers (including horizontal mergers or vertical mergers)
amongst any pharmacy benefit managers, or any pharmacy
benefit manager that owns, controls, or is affiliated with a
pharmacy, or any pharmacy benefit manager that owns,
controls, or is affiliated with a health plan, and the effect
of such merger (including the likelihood of a substantial
decrease in competition or the potential for a monopoly); and
(vi) policy or legislative recommendations to strengthen
any enforcement action relating to a violation of this
section, including recommendations to include additional
prohibited conduct in subsection (b)(1), and recommendations
to encourage more competition and decrease the likelihood of
a monopoly in the pharmaceutical supply chain.
(B) Formulary design or placement practices.--Not later
than 1 year after the date of enactment of this section, the
Commission shall submit to the Committee on Commerce,
Science, and Transportation of the Senate, the Committee on
Finance of the Senate, the Committee on Health, Education,
Labor, and Pensions 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 a report
that addresses the policies, practices, and role of pharmacy
benefit managers (including their affiliates, subsidiaries,
and agents) regarding formulary design or placement,
including--
(i) whether pharmacy benefit managers (including their
affiliates, subsidiaries, and agents) use formulary design or
placement to increase their gross revenue without an
accompanying increase in patient access or decrease in
patient cost; or
[[Page S5127]]
(ii) recommendations to Congress for legislative action
addressing such policies, practices, and role of pharmacy
benefit managers (including their affiliates, subsidiaries,
and agents).
(C) Construction.--Nothing in this subsection shall be
construed as authorizing the Commission to disclose any
information that is a trade secret or confidential
information described in section 552(b)(4) of title 5, United
States Code, except as necessary to enforce this section.
(D) Confidentiality.--The Commission may disclose the
information in a form which does not disclose the identity of
a specific pharmacy benefit manager, pharmacy, or health plan
for the following purposes:
(i) To permit the Comptroller General of the United States
to review the information provided to carry out this section.
(ii) To permit the Director of the Congressional Budget
Office to review the information provided.
(3) GAO study.--Not later than 1 year after the date of
enactment of this section, the Comptroller General of the
United States shall submit to the Committee on Commerce,
Science, and Transportation, the Committee on Finance, and
the Committee on Health, Education, Labor, and Pensions of
the Senate and to the Committee on Ways and Means and the
Committee on Energy and Commerce of the House of
Representatives a report that--
(A) addresses, at minimum--
(i) the role that pharmacy benefit managers play in the
pharmaceutical supply chain;
(ii) the state of competition among pharmacy benefit
managers, including the market share for the Nation's 10
largest pharmacy benefit managers;
(iii) the use of rebates and fees by pharmacy benefit
managers, including data for each of the 10 largest pharmacy
benefit managers that reflects, for each drug in the
formulary of each such pharmacy benefit manager--
(I) the amount of the rebate passed on to patients;
(II) the amount of the rebate passed on to payors;
(III) the amount of the rebate kept by the pharmacy benefit
manager; and
(IV) the role of fees charged by the pharmacy benefit
manager;
(iv) whether pharmacy benefit managers structure their
formularies in favor of high-rebate prescription drugs over
lower-cost, lower-rebate alternatives;
(v) the average prior authorization approval time for each
of the 10 largest pharmacy benefit managers;
(vi) factors affecting the use of step therapy in each of
the 10 largest pharmacy benefit managers;
(vii) the extent to which the price that pharmacy benefit
managers charge payors, such as the Medicare program under
title XXVIII of the Social Security Act (42 U.S.C. 1395 et
seq.), State Medicaid programs under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.), the Federal Employees
Health Benefits Program under chapter 89 of title 5, United
States Code, or private payors, for a drug is more than such
pharmacy benefit managers pay the pharmacy for the drug; and
(viii) the competitive impact of pharmacy benefit managers'
business practices, including the impact that such business
practices have on the cost of health plan premiums or
prescription drugs for consumers; and
(B) provides recommendations for legislative action to
lower the cost of prescription drugs for consumers and
payors, improve the efficiency of the pharmaceutical supply
chain by lowering intermediary costs, improve competition in
pharmacy benefit management, and provide transparency in
pharmacy benefit management.
(4) Privacy requirements.--Any entity 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 (42 U.S.C. 1320d-2
note) (or any successor regulation), and shall restrict the
use and disclosure of such information according to such
regulations.
(d) Whistleblower Protections.--
(1) In general.--A pharmacy benefit manager, health plan,
pharmaceutical manufacturer, pharmacy, or any affiliate,
subsidiary, or agent thereof shall not, directly or
indirectly, discharge, demote, suspend, diminish, or withdraw
benefits from, threaten, harass, or in any other manner
discriminate against or adversely impact a covered individual
because--
(A) the covered individual, or anyone perceived as
assisting the covered individual, takes (or is suspected to
have taken or will take) a lawful action in providing to
Congress, an agency of the Federal Government, the attorney
general of a State, a State regulator with authority over the
distribution or insurance coverage of prescription drugs, or
a law enforcement agency relating to any act or omission that
the covered individual reasonably believes to be a violation
of this section;
(B) the covered individual provides information that the
covered individual reasonably believes evidences such a
violation to--
(i) a person with supervisory authority over the covered
individual at the pharmacy benefit manager, health plan,
pharmaceutical manufacturer, pharmacy, or any affiliate,
subsidiary, or agent thereof; or
(ii) another individual working for the pharmacy benefit
manager, health plan, pharmaceutical manufacturer, pharmacy,
or any affiliate, subsidiary, or agent thereof who the
covered individual reasonably believes has the authority to
investigate, discover, or terminate the violation or to take
any other action to address the violation;
(C) the covered individual testifies (or it is suspected
that the covered individual will testify) in an investigation
or judicial or administrative proceeding concerning such a
violation; or
(D) the covered individual assists or participates (or it
is expected that the covered individual will assist or
participate) in such an investigation or judicial or
administrative proceeding.
(2) Enforcement.--An individual who alleges any adverse
action in violation of paragraph (1) may bring an action for
a jury trial in the appropriate district court of the United
States for the following relief:
(A) Temporary relief while the case is pending.
(B) Reinstatement with the same seniority status that the
individual would have had, but for the discharge or
discrimination.
(C) Twice the amount of back pay otherwise owed to the
individual, with interest.
(D) Consequential and compensatory damages, and
compensation for litigation costs, expert witness fees, and
reasonable attorneys' fees.
(3) Waiver of rights and remedies.--The rights and remedies
provided for in this subsection shall not be waived by any
policy form or condition of employment, including by a
predispute arbitration agreement.
(4) Predispute arbitration agreements.--No predispute
arbitration agreement shall be valid or enforceable if the
agreement requires arbitration of a dispute arising under
this subsection.
(e) Enforcement.--
(1) Enforcement by the commission.--
(A) Unfair and deceptive acts or practices.--A violation of
this section shall be treated as a violation of a rule
defining an unfair or deceptive act or practice under section
18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C.
57a(a)(1)(B)).
(B) Powers of the commission.--
(i) In general.--Except as provided in clause (iii), the
Commission shall enforce this section in the same manner, by
the same means, and with the same jurisdiction, powers, and
duties as though all applicable terms and provisions of the
Federal Trade Commission Act (15 U.S.C. 41 et seq.) were
incorporated into and made a part of this section.
(ii) Privileges and immunities.--Subject to subparagraph
(C), any person who violates this section shall be subject to
the penalties and entitled to the privileges and immunities
provided in the Federal Trade Commission Act (15 U.S.C. 41 et
seq.).
(iii) Nonprofit organizations and insurance.--
Notwithstanding section 4 or 6 of the Federal Trade
Commission Act (15 U.S.C. 44, 46), section 2 of McCarran-
Ferguson Act (15 U.S.C. 1012), or any other jurisdictional
limitation of the Commission, the Commission shall also
enforce this section, in the same manner provided in clauses
(i) and (ii) of this subparagraph, with respect to--
(I) organizations not organized to carry on business for
their own profit or that of their members; and
(II) the business of insurance, and persons engaged in such
business.
(iv) Authority preserved.--Nothing in this subsection shall
be construed to limit the authority of the Commission under
any other provision of law.
(C) Penalties.--
(i) Additional civil penalty.--In addition to any penalty
applicable under the Federal Trade Commission Act (15 U.S.C.
41 et seq.), any person that violates this section shall be
liable for a civil penalty of not more than $1,000,000.
(ii) Method.--The penalties provided by clause (i) shall be
obtained in the same manner as civil penalties imposed under
section 18(a)(1)(B) of the Federal Trade Commission Act (15
U.S.C. 57a(a(1)(B).
(iii) Multiple offenses; mitigating factors.--In assessing
a penalty under clause (i)--
(I) each day of a continuing violation shall be considered
a separate violation; and
(II) the court shall take into consideration, among other
factors--
(aa) the seriousness of the violation;
(bb) the efforts of the person committing the violation to
remedy the harm caused by the violation in a timely manner;
and
(cc) whether the violation was intentional.
(2) Enforcement by states.--
(A) In general.--If the attorney general of a State has
reason to believe that an interest of the residents of the
State has been or is being threatened or adversely affected
by a practice that violates this section, the attorney
general of the State may bring a civil action on behalf of
the residents of the State in an appropriate district court
of the United States to obtain appropriate relief.
(B) Rights of the commission.--
(i) Notice to the commission.--
(I) In general.--Except as provided in subclause (III), the
attorney general of a State, before initiating a civil action
under subparagraph (A), shall provide written notification to
the Commission that the attorney general intends to bring
such civil action.
(II) Contents.--The notification required under subclause
(I) shall include a copy of the complaint to be filed to
initiate the civil action.
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(III) Exception.--If it is not feasible for the attorney
general of a State to provide the notification required under
subclause (I) before initiating a civil action under
subparagraph (A), the attorney general shall notify the
Commission immediately upon instituting the civil action.
(ii) Intervention by the commission.--The Commission may--
(I) intervene in any civil action brought by the attorney
general of a State under subparagraph (A); and
(II) upon intervening--
(aa) be heard on all matters arising in the civil action;
and
(bb) file petitions for appeal of a decision in the civil
action.
(C) Construction.--
(i) Powers conferred on the attorney general of a state.--
Nothing in this paragraph may be construed to prevent the
attorney general of a State from exercising the powers
conferred on the attorney general by the laws of the State to
conduct investigations, to administer oaths or affirmations,
or to compel the attendance of witnesses or the production of
documentary or other evidence.
(ii) ERISA.--No civil action brought pursuant to this
paragraph shall conflict with the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1001 et seq.).
(D) Venue; service of process.--
(i) Venue.--Any action brought under subparagraph (A) may
be brought in--
(I) the district court of the United States that meets
applicable requirements relating to venue under section 1391
of title 28, United States Code; or
(II) another court of competent jurisdiction.
(ii) Service of process.--In an action brought under
subparagraph (A), process may be served in any district in
which--
(I) the defendant is an inhabitant, may be found, or
transacts business; or
(II) venue is proper under section 1391 of title 28, United
States Code.
(E) Actions by other state officials.--
(i) In general.--If an attorney general lacks appropriate
jurisdiction to bring a civil action under subparagraph (A),
any other officer of a State who is authorized by the State
to do so may bring a civil action under subparagraph (A),
subject to the same requirements and limitations that apply
under this paragraph to civil actions brought by attorneys
general.
(ii) Clarification of authority.--The authority provided by
clause (i) shall supplant, and not supplement, the
authorities of State attorneys general under subparagraph
(A).
(iii) Savings provision.--Nothing in this paragraph may be
construed to prohibit an authorized official of a State from
initiating or continuing any proceeding in a court of the
State for a violation of any civil or criminal law of the
State.
(3) Affirmative defense.--
(A) In general.--In an action brought under this subsection
to enforce subsection (b), it shall be an affirmative
defense, on which the defendant has the burden of persuasion
by a preponderance of the evidence, that the conduct alleged
to be a violation of subsection (b) was nonpretextual and
reasonably necessary to--
(i) prevent a violation of, or comply with, Federal or
State law;
(ii) protect patient safety; or
(iii) protect patient access.
(B) Clarification.--Nothing in this paragraph shall be
construed to prohibit a defendant from raising any other
affirmative defense available.
(f) Protection of Personal Health Information.--In making
any disclosure or report required by this section, a pharmacy
benefit manager (including their affiliates, subsidiaries,
and agents) shall not include any information that would
identify a patient or a provider that issued a prescription.
(g) Effect on State Laws.--Nothing in this section shall be
construed to preempt, displace, or supplant any State laws,
rules, regulations, or requirements, or the enforcement
thereof.
(h) Definitions.--In this section:
(1) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(2) Covered individual.--The term ``covered individual''
means a current or former employee, contractor,
subcontractor, service provider, or agent of a pharmacy
benefit manager, health plan, pharmaceutical manufacturer,
pharmacy, or any affiliate, subsidiary, or agent thereof.
(3) Health plan.--The term ``health plan'' means any group
or individual health insurance plan or coverage, including
any health insurance plan or coverage sponsored or funded by
the Federal Government or the government of any State,
Territory, or subdivision thereof.
(4) Pharmacy benefit manager.--The term ``pharmacy benefit
manager'' means any entity that provides pharmacy benefit
management services on behalf of a health plan, a payer, or
health insurance issuer.
(5) Pharmacy benefit management services.--The term
``pharmacy benefit management services'' means, pursuant to a
written agreement with a payer or health plan offering group
or individual health insurance coverage, directly or through
an intermediary, the service of--
(A) negotiating terms and conditions, including rebates and
price concessions, with respect to a prescription drug on
behalf of the health plan, coverage, or payer; or
(B) managing the prescription drug benefits provided by the
health plan, coverage, or payer, which may include formulary
management 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, or the provision of related services.
(6) Prescription drug.--The term ``prescription drug''
means--
(A) a drug, as that term is defined in section 201(g) of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(g)),
that is--
(i) approved by the Food and Drug Administration under
section 505 of such Act (21 U.S.C. 355); and
(ii) subject to the requirements of section 503(b)(1) of
such Act (21 U.S.C. 353(b)(1));
(B) a biological product as that term is defined in section
351 of the Public Health Service Act (42 U.S.C. 262(i)(1));
or
(C) a product that is biosimilar to, or interchangeable
with, a biologic product under section 351 of the Public
Health Service Act (42 U.S.C. 262(i)).
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