[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1217 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 1217
To prohibit the distribution and receipt of rebates for prescription
drugs.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 19, 2023
Mr. Hawley introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To prohibit the distribution and receipt of rebates for prescription
drugs.
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 ``Ending the Prescription Drug
Kickback Act of 2023''.
SEC. 2. REQUIREMENTS FOR PRESCRIPTION DRUG BENEFITS.
(a) Removal of Safe Harbor Protection for Rebates Involving
Prescription Drugs.--
(1) Removal of safe harbor protection for rebates involving
prescription drugs.--Section 1128B(b) of the Social Security
Act (42 U.S.C. 1320a-7b(b)) is amended--
(A) in paragraph (3)(A), by striking ``a discount''
and inserting ``subject to paragraph (5), a discount'';
and
(B) by adding at the end the following:
``(5) Removal of safe harbor protection for rebates
involving prescription drugs.--
``(A) In general.--The safe harbor described in
paragraph (3)(A) shall not apply to a rebate or other
remuneration, including a rebate or other remuneration
intended to influence formulary tier placement or its
equivalent, from a manufacturer of prescription drugs
or an entity that provides pharmacy benefits management
services.
``(B) Definitions.--In this paragraph:
``(i) Entity that provides pharmacy
benefits management services.--The term `entity
that provides pharmacy benefits management
services' means--
``(I) any person, business, or
other entity that provides, directly or
through an intermediary, the service
of--
``(aa) negotiating terms
and conditions with respect to
a prescription drug on behalf
of a health plan under a
Federal health care program; or
``(bb) managing the
prescription drug benefits
provided by the plan, 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; or
``(II) any entity that is owned,
affiliated, or related under a common
ownership structure with a person,
business, or entity described in
subclause (I).
``(ii) Rebate.--The term `rebate' means any
discount the terms of which are fixed and
disclosed in writing to the buyer at the time
of the purchase to which the discount applies,
but which is not given at the time of
purchase.''.
(2) Effective date.--The amendments made by this subsection
shall take effect on January 1, 2025.
(b) Requirements for Private Insurance Plans.--
(1) In general.--Part D of title XXVII of the Public Health
Service Act (42 U.S.C. 300gg-111 et seq.) is amended by adding
at the end the following:
``SEC. 2799A-11. REQUIREMENTS WITH RESPECT TO PRESCRIPTION DRUG
BENEFITS.
``(a) In General.--A group health plan or a health insurance issuer
offering group or individual health insurance coverage shall not, and
shall ensure that any entity that provides pharmacy benefits management
services on its behalf does not, receive from a drug manufacturer a
rebate or other remuneration, including a rebate or other remuneration
intended to influence formulary tier placement or its equivalent, with
respect to any prescription drug received by an enrollee in the plan or
coverage and covered by the plan or coverage.
``(b) Definitions.--For purposes of this section--
``(1) the term `entity that provides pharmacy benefits
management services' means--
``(A) any person, business, or other entity that
provides, directly or through an intermediary, the
service of--
``(i) negotiating terms and conditions with
respect to a prescription drug on behalf of a
group health plan or group or individual health
insurance coverage; or
``(ii) managing the prescription drug
benefits provided by the plan or coverage,
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; or
``(B) any entity that is owned, affiliated, or
related under a common ownership structure with a
person, business, or entity described in paragraph (1);
and
``(2) the term `rebate' means any discount the terms of
which are fixed and disclosed in writing to the buyer at the
time of the purchase to which the discount applies, but which
is not given at the time of purchase.''.
(2) ERISA.--
(A) In general.--Subpart B of part 7 of subtitle B
of title I of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1185 et seq.) is amended by
adding at the end the following:
``SEC. 726. REQUIREMENTS WITH RESPECT TO PRESCRIPTION DRUG BENEFITS.
``(a) In General.--A group health plan or a health insurance issuer
offering group health insurance coverage shall not, and shall ensure
that any entity that provides pharmacy benefits management services on
its behalf does not, receive from a drug manufacturer a rebate or other
remuneration, including a rebate or other remuneration intended to
influence formulary tier placement or its equivalent, with respect to
any prescription drug received by an enrollee in the plan or coverage
and covered by the plan or coverage.
``(b) Definitions.--For purposes of this section--
``(1) the term `entity that provides pharmacy benefits
management services' means--
``(A) any person, business, or other entity that
provides, directly or through an intermediary, the
service of--
``(i) negotiating terms and conditions with
respect to a prescription drug on behalf of a
group health plan or group health insurance
coverage; or
``(ii) managing the prescription drug
benefits provided by the plan or coverage,
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; or
``(B) any entity that is owned, affiliated, or
related under a common ownership structure with a
person, business, or entity described in paragraph (1);
and
``(2) the term `rebate' means any discount the terms of
which are fixed and disclosed in writing to the buyer at the
time of the purchase to which the discount applies, but which
is not given at the time of purchase.''.
(B) Clerical amendment.--The table of contents of
the Employee Retirement Income Security Act of 1974 is
amended by inserting after the item relating to section
725 the following:
``Sec. 726. Requirements with respect to prescription drug benefits.''.
(3) IRC.--
(A) In general.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986 is amended by adding at
the end the following:
``SEC. 9826. REQUIREMENTS WITH RESPECT TO PRESCRIPTION DRUG BENEFITS.
``(a) In General.--A group health plan shall not, and shall ensure
that any entity that provides pharmacy benefits management services on
its behalf does not, receive from a drug manufacturer a rebate or other
remuneration with respect to any prescription drug received by an
enrollee in the plan and covered by the plan.
``(b) Definitions.--For purposes of this section--
``(1) the term `entity that provides pharmacy benefits
management services' means--
``(A) any person, business, or other entity that
provides, directly or through an intermediary, the
service of--
``(i) negotiating terms and conditions with
respect to a prescription drug on behalf of a
group health plan; or
``(ii) managing the prescription drug
benefits provided by the plan, 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; or
``(B) any entity that is owned, affiliated, or
related under a common ownership structure with a
person, business, or entity described in paragraph (1);
and
``(2) the term `rebate' means any discount the terms of
which are fixed and disclosed in writing to the buyer at the
time of the purchase to which the discount applies, but which
is not given at the time of purchase.''.
(B) Clerical amendment.--The table of sections for
subchapter B of chapter 100 of the Internal Revenue
Code of 1986 is amended by adding at the end the
following:
``Sec. 9826. Requirements with respect to prescription drug
benefits.''.
(4) Effective date.--The amendments made by paragraphs (1),
(2), and (3) shall take effect on January 1, 2025.
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