[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1339 Introduced in Senate (IS)]

<DOC>






118th CONGRESS
  1st Session
                                S. 1339

 To provide for increased oversight of entities that provide pharmacy 
benefit management services on behalf of group health plans and health 
                          insurance coverage.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 27, 2023

 Mr. Sanders (for himself, Mr. Cassidy, Mrs. Murray, and Mr. Marshall) 
introduced the following bill; which was read twice and referred to the 
          Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
 To provide for increased oversight of entities that provide pharmacy 
benefit management services on behalf of group health plans and health 
                          insurance coverage.

    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 ``Pharmacy Benefit Manager Reform 
Act''.

SEC. 2. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT MANAGEMENT 
              SERVICES.

    (a) PHSA.--Title XXVII of the Public Health Service Act (42 U.S.C. 
300gg et seq.) is amended--
            (1) in part D (42 U.S.C. 300gg-111 et seq.), by adding at 
        the end the following new section:

``SEC. 2799A-11. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT 
              MANAGEMENT SERVICES.

    ``(a) In General.--For plan years beginning on or after January 1, 
2025, a group health plan or health insurance issuer offering group 
health insurance coverage or an entity providing pharmacy benefit 
management services on behalf of such a plan or issuer shall not enter 
into a contract with an applicable entity that limits the disclosure of 
information to plan sponsors in such a manner that prevents the plan or 
issuer, or an entity providing pharmacy benefit management services on 
behalf of a plan or issuer, from making the reports described in 
subsection (b).
    ``(b) Reports.--
            ``(1) In general.--For plan years beginning on or after 
        January 1, 2025, not less frequently than annually, an entity 
        providing pharmacy benefit management services on behalf of a 
        covered group health plan shall submit to the plan sponsor of 
        such covered group health plan a report in accordance with this 
        subsection and make such report available to the plan sponsor 
        in a machine-readable format and, as the Secretary, the 
        Secretary of Labor, and the Secretary of the Treasury may 
        determine, other formats. Each such report shall include, with 
        respect to the covered group health plan--
                    ``(A) as applicable, information collected from 
                drug manufacturers by such issuer or entity on the 
                total amount of copayment assistance dollars paid, or 
                copayment cards applied, that were funded by the drug 
                manufacturer with respect to the participants and 
                beneficiaries in such plan;
                    ``(B) a list of each drug covered by such plan or 
                entity providing pharmacy benefit management services 
                that was billed during the reporting period, including, 
                with respect to each such drug during the reporting 
                period--
                            ``(i) the brand name, generic or 
                        nonproprietary name, and National Drug Code;
                            ``(ii) the number of participants and 
                        beneficiaries for whom the drug was billed 
                        during the reporting period, the total number 
                        of prescription claims for the drug (including 
                        original prescriptions and refills), and the 
                        total number of dosage units of the drug 
                        dispensed across the reporting period;
                            ``(iii) for each claim or dosage unit 
                        described in clause (ii), the type of 
                        dispensing channel used, such as retail, mail 
                        order, or specialty pharmacy;
                            ``(iv) the wholesale acquisition cost, 
                        listed as cost per days supply, cost per dosage 
                        unit, and cost per typical course of treatment 
                        (as applicable);
                            ``(v) the total out-of-pocket spending by 
                        participants and beneficiaries on such drug 
                        after application of any benefits under the 
                        plan or coverage, including participant and 
                        beneficiary spending through copayments, 
                        coinsurance, and deductibles, but not including 
                        any amounts spent by participants and 
                        beneficiaries on drugs not covered under the 
                        plan or coverage or for which no claim is 
                        submitted to the plan or coverage; and
                            ``(vi) for any drug for which gross 
                        spending by the plan exceeded $10,000 and that 
                        is one of the 50 prescription drugs for which 
                        the group health plan spent the most on 
                        prescription drug benefits during the reporting 
                        period--
                                    ``(I) a list of all other drugs in 
                                the same therapeutic class, including 
                                brand name drugs and biological 
                                products and generic drugs or 
                                biosimilar biological products that are 
                                in the same therapeutic class as such 
                                drug; and
                                    ``(II) if applicable, the rationale 
                                for preferred formulary placement of 
                                such drug in that therapeutic class, 
                                selected from a list of standard 
                                rationales established by the 
                                Secretary;
                    ``(C) a list of each therapeutic class of drugs 
                that were dispensed under the health plan during the 
                reporting period, and, with respect to each such 
                therapeutic class of drugs, during the reporting 
                period--
                            ``(i) total gross spending by the plan, 
                        before rebates, fees, alternative discounts, or 
                        other remuneration;
                            ``(ii) the number of participants and 
                        beneficiaries who filled a prescription for a 
                        drug in that class;
                            ``(iii) if applicable to that class, a 
                        description of the formulary tiers and 
                        utilization management mechanisms (such as 
                        prior authorization or step therapy) employed 
                        for drugs in that class;
                            ``(iv) the total out-of-pocket spending by 
                        participants and beneficiaries, including 
                        participant and beneficiary spending through 
                        copayments, coinsurance, and deductibles; and
                            ``(v) for each therapeutic class under 
                        which 3 or more drugs are included on the 
                        formulary of such plan--
                                    ``(I) the amount received, or 
                                expected to be received, by such 
                                entity, from an applicable entity, in 
                                rebates, fees, alternative discounts, 
                                or other remuneration that--
                                            ``(aa) has been paid, or 
                                        will be paid, by such an 
                                        applicable entity for claims 
                                        incurred during the reporting 
                                        period; or
                                            ``(bb) is related to 
                                        utilization of drugs or drug 
                                        spending;
                                    ``(II) the total net spending by 
                                the health plan on that class of drugs; 
                                and
                                    ``(III) the net price per typical 
                                course of treatment or 30-day supply 
                                incurred by the health plan and its 
                                participants and beneficiaries, after 
                                rebates, fees, alternative discounts, 
                                or other remuneration provided by an 
                                applicable entity, for drugs dispensed 
                                within such therapeutic class during 
                                the reporting period;
                    ``(D) total gross spending on prescription drugs by 
                the plan during the reporting period, before rebates, 
                fees, alternative discounts, or other remuneration 
                provided by an applicable entity;
                    ``(E) the total amount received, or expected to be 
                received, by the health plan, from an applicable 
                entity, in rebates, fees, alternative discounts, and 
                other remuneration received from any such entities, 
                related to utilization of drug or drug spending under 
                that health plan during the reporting period;
                    ``(F) the total net spending on prescription drugs 
                by the health plan during the reporting period;
                    ``(G) amounts paid directly or indirectly in 
                rebates, fees, or any other type of compensation (as 
                defined in section 408(b)(2)(B)(ii)(dd)(AA) of the 
                Employee Retirement Income Security Act of 1974) to 
                brokers, consultants, advisors, or any other individual 
                or firm who referred the group health plan's business 
                to the pharmacy benefit manager; and
                    ``(H) a summary document that includes such 
                information described in subparagraphs (A) through (G) 
                as the Secretary determines useful for plan sponsors 
                for purposes of selecting pharmacy benefit management 
                services, such as an estimated net price to plan 
                sponsor and participant or beneficiary, a cost per 
                claim, the fee structure or reimbursement model, and 
                estimated cost per participant or beneficiary.
            ``(2) Supplementary reporting for intra-company 
        prescription drug transactions.--
                    ``(A) In general.--A health insurance issuer 
                offering covered group health insurance coverage or an 
                entity providing pharmacy benefit management services 
                under a covered group health plan or covered group 
                health insurance coverage shall submit, together with 
                the report under paragraph (1), a supplementary report 
                every 6 months to the plan sponsor that includes--
                            ``(i) an explanation of any benefit design 
                        parameters that encourage or require 
                        participants and beneficiaries in the plan or 
                        coverage to fill prescriptions at mail order, 
                        specialty, or retail pharmacies that are wholly 
                        or partially-owned by that issuer or entity 
                        providing pharmacy benefit management services 
                        under such plan or coverage, including 
                        mandatory mail and specialty home delivery 
                        programs, retail and mail auto-refill programs, 
                        and copayment incentives funded by an entity 
                        providing pharmacy benefit management services;
                            ``(ii) the percentage of total 
                        prescriptions charged to the plan, coverage, or 
                        participants and beneficiaries in the plan or 
                        coverage, that were dispensed by mail order, 
                        specialty, or retail pharmacies that are wholly 
                        or partially-owned by the issuer or entity 
                        providing pharmacy benefit management services; 
                        and
                            ``(iii) a list of all drugs dispensed by 
                        such wholly or partially-owned pharmacy and 
                        charged to the plan or coverage, or 
                        participants and beneficiaries of the plan or 
                        coverage, during the applicable quarter, and, 
                        with respect to each drug--
                                    ``(I) the amounts charged, per 
                                dosage unit, per course of treatment, 
                                per 30-day supply, and per 90-day 
                                supply, with respect to participants 
                                and beneficiaries in the plan or 
                                coverage, including amounts charged to 
                                the plan or coverage and amounts 
                                charged to the participants and 
                                beneficiaries;
                                    ``(II) the median amount charged to 
                                the plan or coverage, per dosage unit, 
                                per course of treatment, per 30-day 
                                supply, and per 90-day supply, 
                                including amounts paid by the 
                                participants and beneficiaries, when 
                                the same drug is dispensed by other 
                                pharmacies that are not wholly or 
                                partially-owned by the issuer or entity 
                                and that are included in the pharmacy 
                                network of that plan or coverage;
                                    ``(III) the interquartile range of 
                                the costs, per dosage unit, per course 
                                of treatment, per 30-day supply, and 
                                per 90-day supply, including amounts 
                                paid by the participants and 
                                beneficiaries, when the same drug is 
                                dispensed by other pharmacies that are 
                                not wholly or partially-owned by the 
                                issuer or entity and that are included 
                                in the pharmacy network of that plan or 
                                coverage;
                                    ``(IV) the lowest cost, per dosage 
                                unit, per course of treatment, per 30-
                                day supply, and per 90-day supply, for 
                                such drug, including amounts charged to 
                                the plan or issuer and participants and 
                                beneficiaries, that is available from 
                                any pharmacy included in the network of 
                                the plan or coverage;
                                    ``(V) the net acquisition cost per 
                                dosage unit and for a 30 day-supply, 
                                and the acquisition cost per typical 
                                course of treatment, if the drug is 
                                subject to a maximum price discount; 
                                and
                                    ``(VI) other information with 
                                respect to the cost of the drug, as 
                                determined by the Secretary, such as 
                                average sales price, wholesale 
                                acquisition cost, and national average 
                                drug acquisition cost per dosage unit, 
                                per typical course of treatment, or per 
                                30-day supply, for such drug, including 
                                amounts charged to the plan or issuer 
                                and participants and beneficiaries 
                                among all pharmacies included in the 
                                network of the plan or coverage.
                    ``(B) Plans and coverage offered by small 
                employers.--A health insurance issuer offering covered 
                group health insurance coverage that is not covered 
                group health insurance coverage or an entity providing 
                pharmacy benefit management services under a group 
                health plan that is not a covered group health plan or 
                under group health insurance coverage that is not 
                covered group health insurance coverage that conducts 
                transactions with a wholly or partially-owned pharmacy 
                shall submit, together with the report under paragraph 
                (1), a supplementary report every 6 months to the plan 
                sponsor that includes the information described in 
                clauses (i) and (ii) of subparagraph (A).
            ``(3) Privacy requirements.--
                    ``(A) Relationship to hipaa regulations.--Nothing 
                in this section shall be construed to modify the 
                requirements for the creation, receipt, maintenance, or 
                transmission of protected health information under the 
                privacy, security, breach notification, and enforcement 
                regulations in parts 160 and 164 of title 45, Code of 
                Federal Regulations (or successor regulations).
                    ``(B) Requirement.--A report submitted under 
                paragraph (1) or (2) shall contain only summary health 
                information, as defined in section 164.504(a) of title 
                45, Code of Federal Regulations (or successor 
                regulations).
                    ``(C) Clarification regarding certain disclosures 
                of information.--
                            ``(i) Reasonable restrictions.--Nothing in 
                        this section prevents a health insurance issuer 
                        offering group health insurance coverage or an 
                        entity providing pharmacy benefit management 
                        services on behalf of a group health plan or 
                        group health insurance coverage from placing 
                        reasonable restrictions on the public 
                        disclosure of the information contained in a 
                        report under paragraph (1) or (2).
                            ``(ii) Limitations.--A health insurance 
                        issuer offering group health insurance coverage 
                        or an entity providing pharmacy benefit 
                        management services on behalf of a group health 
                        plan or group health insurance coverage may not 
                        restrict disclosure of such reports to the 
                        Department of Health and Human Services, the 
                        Department of Labor, the Department of the 
                        Treasury, or any other Federal agency 
                        responsible for enforcement activities under 
                        this section for purposes of enforcement under 
                        this section or other applicable law, or to the 
                        Comptroller General of the United States in 
                        accordance with paragraph (6).
            ``(4) Use and disclosure by plan sponsors.--
                    ``(A) Prohibition.--A plan sponsor may not--
                            ``(i) fail or refuse to hire, or discharge, 
                        any employee, or otherwise discriminate against 
                        any employee with respect to the compensation, 
                        terms, conditions, or privileges of employment 
                        of the employee, because of information 
                        submitted under paragraph (1) or (2) attributed 
                        to the employee or a dependent of the employee; 
                        or
                            ``(ii) limit, segregate, or classify the 
                        employees of the employer in any way that would 
                        deprive or tend to deprive any employee of 
                        employment opportunities or otherwise adversely 
                        affect the status of the employee as an 
                        employee, because of information submitted 
                        under paragraph (1) or (2) attributed to the 
                        employee or a dependent of the employee.
                    ``(B) Disclosure and redisclosure.--A plan sponsor 
                shall not disclose the information received under 
                paragraph (1) or (2) except--
                            ``(i) to an occupational or other health 
                        researcher if the research is conducted in 
                        compliance with the regulations and protections 
                        provided for under part 46 of title 45, Code of 
                        Federal Regulations (or successor regulations);
                            ``(ii) in response to an order of a court, 
                        except that the plan sponsor may disclose only 
                        the information expressly authorized by such 
                        order;
                            ``(iii) to the Department of Health and 
                        Human Services, the Department of Labor, the 
                        Department of the Treasury, or other Federal 
                        agency responsible for enforcement activities 
                        under this section; or
                            ``(iv) to a contractor or agent for 
                        purposes of health plan administration, if such 
                        contractor or agent agrees, in writing, to 
                        abide by the same use and disclosure 
                        restrictions as the plan sponsor.
                    ``(C) Relationship to hipaa regulations.--With 
                respect to the regulations promulgated by the Secretary 
                of Health and Human Services under part C of title XI 
                of the Social Security Act and section 264 of the 
                Health Insurance Portability and Accountability Act of 
                1996, subparagraph (B) does not prohibit a covered 
                entity (as defined for purposes of such regulations) 
                from any use or disclosure of health information that 
                is authorized for the covered entity under such 
                regulations. The previous sentence does not affect the 
                authority of such Secretary to modify such regulations.
                    ``(D) Enforcement.--
                            ``(i) In general.--The powers, procedures, 
                        and remedies provided in section 207 of the 
                        Genetic Information Nondiscrimination Act to a 
                        person alleging a violation of title II of such 
                        Act shall be the powers, procedures, and 
                        remedies this subparagraph provides for any 
                        person alleging a violation of this paragraph.
                            ``(ii) Prohibition against retaliation.--No 
                        person shall discriminate against any 
                        individual because such individual has opposed 
                        any act or practice made unlawful by this 
                        paragraph or because such individual made a 
                        charge, testified, assisted, or participated in 
                        any manner in an investigation, proceeding, or 
                        hearing under this paragraph. The remedies and 
                        procedures otherwise provided for under this 
                        subparagraph shall be available to aggrieved 
                        individuals with respect to violations of this 
                        clause.
            ``(5) Additional reporting.--
                    ``(A) Reporting with respect to group health plans 
                offered by small employers.--For plan years beginning 
                on or after January 1, 2025, not less frequently than 
                annually, an entity providing pharmacy benefit 
                management services on behalf of a group health plan 
                that is not a covered group health plan shall submit to 
                the plan sponsor of such group health plan a report in 
                accordance with this paragraph, and make such report 
                available to the plan sponsor in a machine-readable 
                format, and such other formats as the Secretary, the 
                Secretary of Health and Human Services, and the 
                Secretary of the Treasury may determine. Each such 
                report shall include, with respect to the applicable 
                group health plan, the information described in 
                subparagraphs (A), (D), (E), (F), (G), and (H) of 
                paragraph (1).
                    ``(B) Opt-in for group health insurance coverage.--
                            ``(i) In general.--A plan sponsor may, on 
                        an annual basis, beginning with plan years 
                        beginning on or after January 1, 2025, elect to 
                        require a health insurance issuer offering 
                        group health insurance coverage to submit to 
                        such plan sponsor a report in accordance with 
                        this subsection.
                            ``(ii) Contents of reports.--
                                    ``(I) Covered group health 
                                insurance coverage.--In the case of an 
                                issuer that offers covered group health 
                                insurance coverage, a report provided 
                                pursuant to clause (i) shall include, 
                                with respect to the applicable covered 
                                group health insurance coverage, the 
                                information required under paragraph 
                                (1) for covered group health plans.
                                    ``(II) Other group health insurance 
                                coverage.--In the case of an issuer 
                                that offers group health insurance 
                                coverage that is not covered group 
                                health insurance, a report provided 
                                pursuant to clause (i) shall include, 
                                with respect to the applicable group 
                                health insurance coverage, the 
                                information described in subparagraphs 
                                (A), (D), (E), (F), and (G) of 
                                paragraph (1).
                            ``(iii) Application.--For purposes of 
                        reports submitted in accordance with this 
                        subparagraph, paragraph (1) shall be applied by 
                        substituting `group health insurance coverage' 
                        or `health insurance issuer', as applicable, 
                        for `group health plan', `group plan', and 
                        `plan' where such terms appear in such 
                        paragraph.
                            ``(iv) Required reporting for all group 
                        health insurance coverage.--Each health 
                        insurance issuer of health insurance coverage 
                        shall annually submit the information described 
                        in paragraph (1)(H), regardless of whether the 
                        plan sponsor made the election described in 
                        clause (i) for the applicable year.
            ``(6) Submissions to gao.--A health insurance issuer 
        offering group health insurance coverage or an entity providing 
        pharmacy benefit management services on behalf of a group 
        health plan shall submit to the Comptroller General of the 
        United States each of the first 2 reports submitted to a plan 
        sponsor under paragraph (1) or (5) with respect to such 
        coverage or plan, and other such reports as requested, in 
        accordance with the privacy requirements under paragraph (3), 
        and such other information that the Comptroller General 
        determines necessary to carry out the study under section 2(f) 
        of the Pharmacy Benefit Manager Reform Act.
            ``(7) Standard formats.--
                    ``(A) In general.--Not later than June 1, 2024, the 
                Secretary, the Secretary of Labor, and the Secretary of 
                the Treasury shall specify, through rulemaking, 
                standard formats for health insurance issuers and 
                entities providing pharmacy benefit management services 
                to submit reports required under this subsection.
                    ``(B) Limited form of report.--The Secretary, the 
                Secretary of Labor, and the Secretary of the Treasury 
                shall define through rulemaking a limited form of the 
                reports under paragraphs (1) and (2) required to be 
                submitted to plan sponsors who also are drug 
                manufacturers, drug wholesalers, entities providing 
                pharmacy benefit management services, or other direct 
                participants in the drug supply chain, in order to 
                prevent anti-competitive behavior.
    ``(c) Limitations on Spread Pricing.--
            ``(1) In general.--For plan years beginning on or after 
        January 1, 2025, a group health plan or health insurance issuer 
        offering group or individual health insurance coverage shall 
        not charge participants and beneficiaries, and an entity 
        providing pharmacy benefit management services under such a 
        plan or coverage shall not charge the plan, issuer, or 
        participants and beneficiaries, a price for a prescription drug 
        that exceeds the price paid to the pharmacy for such drug, 
        excluding penalties paid by the pharmacy (as described in 
        paragraph (2)) to such plan, issuer, or entity.
            ``(2) Rule of construction.--For purposes of paragraph (1), 
        penalties paid by pharmacies include only the following:
                    ``(A) A penalty paid if an original claim for a 
                prescription drug was submitted fraudulently by the 
                pharmacy to the plan, issuer, or entity.
                    ``(B) A penalty paid if the original claim payment 
                made by the plan, issuer, or entity to the pharmacy was 
                inconsistent with the reimbursement terms in any 
                contract between the pharmacy and the plan, issuer, or 
                entity.
                    ``(C) A penalty paid if the pharmacist services 
                billed to the plan, issuer, or entity were not rendered 
                by the pharmacy.
    ``(d) Full Rebate Pass-Through to Plan.--
            ``(1) In general.--For plan years beginning on or after 
        January 1, 2025, a third-party administrator of a group health 
        plan, a health insurance issuer offering group health insurance 
        coverage, or an entity providing pharmacy benefit management 
        services under such health plan or health insurance coverage 
        shall--
                    ``(A) remit 100 percent of rebates, fees, 
                alternative discounts, and other remuneration received 
                from any applicable entity that are related to 
                utilization of drugs under such health plan or health 
                insurance coverage, to the group health plan; and
                    ``(B) ensure that any contract entered into by such 
                third-party administrator, health insurance issuer, or 
                entity providing pharmacy benefit management services 
                with an applicable entity remit 100 percent of rebates, 
                fees, alternative discounts, and other remuneration 
                received to the third-party administrator, health 
                insurance issuer, or entity providing pharmacy benefit 
                management services.
            ``(2) Form and manner of remittance.--Such rebates, fees, 
        alternative discounts, and other remuneration shall be--
                    ``(A) remitted to the group health plan or group 
                health insurance coverage in a timely fashion after the 
                period for which such rebates, fees, alternative 
                discounts, or other remuneration is calculated, and in 
                no case later than 90 days after the end of such 
                period;
                    ``(B) fully disclosed and enumerated to the group 
                health plan sponsor, as described in paragraphs (1) and 
                (4) of subsection (b);
                    ``(C) available for audit by the plan sponsor, or a 
                third-party designated by a plan sponsor not less than 
                once per plan year; and
                    ``(D) returned to the issuer or entity providing 
                pharmaceutical benefit management services by the group 
                health plan if audits by such issuer or entity indicate 
                that the amounts received are incorrect after such 
                amounts have been paid to the group health plan.
            ``(3) Audit of rebate contracts.--A third-party 
        administrator of a group health plan, a health insurance issuer 
        offering group health insurance coverage, or an entity 
        providing pharmacy benefit management services under such 
        health plan or health insurance coverage shall make rebate 
        contracts with rebate aggregators or drug manufacturers 
        available for audit by such plan sponsor or designated third-
        party, subject to confidentiality agreements to prevent re-
        disclosure of such contracts.
            ``(4) Auditors.--The applicable plan sponsor may select an 
        auditor for purposes of carrying out audits under paragraphs 
        (2)(C) and (3).
            ``(5) Rule of construction.--Nothing in this subsection 
        shall be construed to prohibit payments to entities offering 
        pharmacy benefit management services for bona fide services 
        using a fee structure not contemplated by this subsection, 
        provided that such fees are transparent to group health plans 
        and health insurance issuers.
    ``(e) Enforcement.--
            ``(1) In general.--The Secretary, in consultation with the 
        Secretary of Labor and the Secretary of the Treasury, shall 
        enforce this section.
            ``(2) Failure to provide timely information.--A health 
        insurance issuer or an entity providing pharmacy benefit 
        management services that violates subsection (a) or fails to 
        provide information required under subsection (b); a group 
        health plan, health insurance issuer, or entity providing 
        pharmacy benefit management services that violates subsection 
        (c); or a third-party administrator of a group health plan, a 
        health insurance issuer offering group health insurance 
        coverage, or an entity providing pharmacy benefit management 
        services that violates subsection (d) shall be subject to a 
        civil monetary penalty in the amount of $10,000 for each day 
        during which such violation continues or such information is 
        not disclosed or reported.
            ``(3) False information.--A health insurance issuer, entity 
        providing pharmacy benefit management services, or drug 
        manufacturer that knowingly provides false information under 
        this section shall be subject to a civil money penalty in an 
        amount not to exceed $100,000 for each item of false 
        information. Such civil money penalty shall be in addition to 
        other penalties as may be prescribed by law.
            ``(4) Procedure.--The provisions of section 1128A of the 
        Social Security Act, other than subsections (a) and (b) and the 
        first sentence of subsection (c)(1) of such section shall apply 
        to civil monetary penalties under this subsection in the same 
        manner as such provisions apply to a penalty or proceeding 
        under section 1128A of the Social Security Act.
            ``(5) Waivers.--The Secretary may waive penalties under 
        paragraph (2), or extend the period of time for compliance with 
        a requirement of this section, for an entity in violation of 
        this section that has made a good-faith effort to comply with 
        this section.
    ``(f) Rule of Construction.--Nothing in this section shall be 
construed to permit a health insurance issuer, group health plan, or 
other entity to restrict disclosure to, or otherwise limit the access 
of, the Department of Health and Human Services to a report described 
in subsection (b)(1) or information related to compliance with 
subsection (a) by such issuer, plan, or entity.
    ``(g) Definitions.--In this section--
            ``(1) the term `applicable entity' means--
                    ``(A) a drug manufacturer, distributor, wholesaler, 
                rebate aggregator (or other purchasing entity designed 
                to aggregate rebates), group purchasing organization, 
                or associated third party;
                    ``(B) any subsidiary, parent, affiliate, or 
                subcontractor of a group health plan, health insurance 
                issuer, entity that provides pharmacy benefit 
                management services on behalf of such a plan or issuer, 
                or any entity described in subparagraph (A); or
                    ``(C) such other entity as the Secretary, the 
                Secretary of Labor, and the Secretary of the Treasury 
                may specify through rulemaking;
            ``(2) the term `covered group health insurance coverage' 
        means health insurance coverage offered in connection with a 
        group health plan maintained by a large employer;
            ``(3) the term `covered group health plan' means a group 
        health plan maintained by a large employer;
            ``(4) the term `gross spending', with respect to 
        prescription drug benefits under a group health plan or health 
        insurance coverage, means the amount spent by a group health 
        plan or health insurance issuer on prescription drug benefits, 
        calculated before the application of manufacturer rebates, 
        fees, alternative discounts, or other remuneration;
            ``(5) the term `large employer' means, in connection with a 
        group health plan with respect to a calendar year and a plan 
        year, an employer who employed an average of at least 50 
        employees on business days during the preceding calendar year 
        and who employs at least 1 employee on the first day of the 
        plan year;
            ``(6) the term `net spending', with respect to prescription 
        drug benefits under a group health plan or health insurance 
        coverage, means the amount spent by a group health plan or 
        health insurance issuer on prescription drug benefits, 
        calculated after the application of manufacturer rebates, fees, 
        alternative discounts, or other remuneration;
            ``(7) the term `plan sponsor' has the meaning given such 
        term in section 3(16)(B) of the Employee Retirement Income 
        Security Act of 1974;
            ``(8) the term `remuneration' has the meaning given such 
        term by the Secretary, the Secretary of Labor, and the 
        Secretary of the Treasury, through notice and comment 
        rulemaking;
            ``(9) the term `small employer' means, in connection with a 
        group health plan with respect to a calendar year and a plan 
        year, an employer who employed an average of at least 1 but not 
        more than 49 employees on business days during the preceding 
        calendar year and who employs at least 1 employee on the first 
        day of the plan year; and
            ``(10) the term `wholesale acquisition cost' has the 
        meaning given such term in section 1847A(c)(6)(B) of the Social 
        Security Act.''; and
            (2) in section 2723 (42 U.S.C. 300gg-22)--
                    (A) in subsection (a)--
                            (i) in paragraph (1), by inserting ``(other 
                        than section 2799A-11)'' after ``part D''; and
                            (ii) in paragraph (2), by inserting 
                        ``(other than section 2799A-11)'' after ``part 
                        D'';
                    (B) in subsection (b)--
                            (i) in paragraph (1), by inserting ``(other 
                        than section 2799A-11)'' after ``part D'';
                            (ii) in paragraph (2)(A), by inserting 
                        ``(other than section 2799A-11)'' after ``part 
                        D''; and
                            (iii) in paragraph (2)(C)(ii), by inserting 
                        ``(other than section 2799A-11)'' after ``part 
                        D''.
    (b) ERISA.--
            (1) In general.--Subtitle B of title I of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1021 et seq.) 
        is amended--
                    (A) in subpart B of part 7 (29 U.S.C. 1185 et 
                seq.), by adding at the end the following:

``SEC. 726. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT 
              MANAGEMENT SERVICES.

    ``(a) In General.--For plan years beginning on or after January 1, 
2025, a group health plan (or health insurance issuer offering group 
health insurance coverage in connection with such a plan) or an entity 
providing pharmacy benefit management services on behalf of such a plan 
or issuer shall not enter into a contract with an applicable entity 
that limits the disclosure of information to plan sponsors in such a 
manner that prevents the plan or issuer, or an entity providing 
pharmacy benefit management services on behalf of a plan or issuer, 
from making the reports described in subsection (b).
    ``(b) Reports.--
            ``(1) In general.--For plan years beginning on or after 
        January 1, 2025, not less frequently than annually, an entity 
        providing pharmacy benefit management services on behalf of a 
        covered group health plan shall submit to the plan sponsor of 
        such covered group health plan a report in accordance with this 
        subsection and make such report available to the plan sponsor 
        in a machine-readable format and, as the Secretary may 
        determine, other formats. Each such report shall include, with 
        respect to the covered group health plan--
                    ``(A) as applicable, information collected from 
                drug manufacturers by such issuer or entity on the 
                total amount of copayment assistance dollars paid, or 
                copayment cards applied, that were funded by the drug 
                manufacturer with respect to the participants and 
                beneficiaries in such plan;
                    ``(B) a list of each drug covered by such plan or 
                entity providing pharmacy benefit management services 
                that was billed during the reporting period, including, 
                with respect to each such drug during the reporting 
                period--
                            ``(i) the brand name, generic or 
                        nonproprietary name, and National Drug Code;
                            ``(ii) the number of participants and 
                        beneficiaries for whom the drug was billed 
                        during the reporting period, the total number 
                        of prescription claims for the drug (including 
                        original prescriptions and refills), and the 
                        total number of dosage units of the drug 
                        dispensed across the reporting period;
                            ``(iii) for each claim or dosage unit 
                        described in clause (ii), the type of 
                        dispensing channel used, such as retail, mail 
                        order, or specialty pharmacy;
                            ``(iv) the wholesale acquisition cost, 
                        listed as cost per days supply, cost per dosage 
                        unit, and cost per typical course of treatment 
                        (as applicable);
                            ``(v) the total out-of-pocket spending by 
                        participants and beneficiaries on such drug 
                        after application of any benefits under the 
                        plan or coverage, including participant and 
                        beneficiary spending through copayments, 
                        coinsurance, and deductibles, but not including 
                        any amounts spent by participants and 
                        beneficiaries on drugs not covered under the 
                        plan or coverage or for which no claim is 
                        submitted to the plan or coverage; and
                            ``(vi) for any drug for which gross 
                        spending by the plan exceeded $10,000 and that 
                        is one of the 50 prescription drugs for which 
                        the group health plan spent the most on 
                        prescription drug benefits during the reporting 
                        period--
                                    ``(I) a list of all other drugs in 
                                the same therapeutic class, including 
                                brand name drugs and biological 
                                products and generic drugs or 
                                biosimilar biological products that are 
                                in the same therapeutic class as such 
                                drug; and
                                    ``(II) if applicable, the rationale 
                                for preferred formulary placement of 
                                such drug in that therapeutic class, 
                                selected from a list of standard 
                                rationales established by the 
                                Secretary;
                    ``(C) a list of each therapeutic class of drugs 
                that were dispensed under the health plan during the 
                reporting period, and, with respect to each such 
                therapeutic class of drugs, during the reporting 
                period--
                            ``(i) total gross spending by the plan, 
                        before rebates, fees, alternative discounts, or 
                        other remuneration;
                            ``(ii) the number of participants and 
                        beneficiaries who filled a prescription for a 
                        drug in that class;
                            ``(iii) if applicable to that class, a 
                        description of the formulary tiers and 
                        utilization management mechanisms (such as 
                        prior authorization or step therapy) employed 
                        for drugs in that class;
                            ``(iv) the total out-of-pocket spending by 
                        participants and beneficiaries, including 
                        participant and beneficiary spending through 
                        copayments, coinsurance, and deductibles; and
                            ``(v) for each therapeutic class under 
                        which 3 or more drugs are included on the 
                        formulary of such plan--
                                    ``(I) the amount received, or 
                                expected to be received, by such 
                                entity, from an applicable entity, in 
                                rebates, fees, alternative discounts, 
                                or other remuneration that--
                                            ``(aa) has been paid, or 
                                        will be paid, by such an 
                                        applicable entity for claims 
                                        incurred during the reporting 
                                        period; or
                                            ``(bb) is related to 
                                        utilization of drugs or drug 
                                        spending;
                                    ``(II) the total net spending by 
                                the health plan on that class of drugs; 
                                and
                                    ``(III) the net price per typical 
                                course of treatment or 30-day supply 
                                incurred by the health plan and its 
                                participants and beneficiaries, after 
                                rebates, fees, alternative discounts, 
                                or other remuneration provided by an 
                                applicable entity, for drugs dispensed 
                                within such therapeutic class during 
                                the reporting period;
                    ``(D) total gross spending on prescription drugs by 
                the plan during the reporting period, before rebates, 
                fees, alternative discounts, or other remuneration 
                provided by an applicable entity;
                    ``(E) the total amount received, or expected to be 
                received, by the health plan, from an applicable 
                entity, in rebates, fees, alternative discounts, and 
                other remuneration received from any such entities, 
                related to utilization of drug or drug spending under 
                that health plan during the reporting period;
                    ``(F) the total net spending on prescription drugs 
                by the health plan during the reporting period;
                    ``(G) amounts paid directly or indirectly in 
                rebates, fees, or any other type of compensation (as 
                defined in section 408(b)(2)(B)(ii)(dd)(AA)) to 
                brokers, consultants, advisors, or any other individual 
                or firm who referred the group health plan's business 
                to the pharmacy benefit manager; and
                    ``(H) a summary document that includes such 
                information described in subparagraphs (A) through (G) 
                as the Secretary determines useful for plan sponsors 
                for purposes of selecting pharmacy benefit management 
                services, such as an estimated net price to plan 
                sponsor and participant or beneficiary, a cost per 
                claim, the fee structure or reimbursement model, and 
                estimated cost per participant or beneficiary.
            ``(2) Supplementary reporting for intra-company 
        prescription drug transactions.--
                    ``(A) In general.--A health insurance issuer 
                offering covered group health insurance coverage or an 
                entity providing pharmacy benefit management services 
                under a covered group health plan or covered group 
                health insurance coverage shall submit, together with 
                the report under paragraph (1), a supplementary report 
                every 6 months to the plan sponsor that includes--
                            ``(i) an explanation of any benefit design 
                        parameters that encourage or require 
                        participants and beneficiaries in the plan or 
                        coverage to fill prescriptions at mail order, 
                        specialty, or retail pharmacies that are wholly 
                        or partially-owned by that issuer or entity 
                        providing pharmacy benefit management services 
                        under such plan or coverage, including 
                        mandatory mail and specialty home delivery 
                        programs, retail and mail auto-refill programs, 
                        and copayment incentives funded by an entity 
                        providing pharmacy benefit management services;
                            ``(ii) the percentage of total 
                        prescriptions charged to the plan, coverage, or 
                        participants and beneficiaries in the plan or 
                        coverage, that were dispensed by mail order, 
                        specialty, or retail pharmacies that are wholly 
                        or partially-owned by the issuer or entity 
                        providing pharmacy benefit management services; 
                        and
                            ``(iii) a list of all drugs dispensed by 
                        such wholly or partially-owned pharmacy and 
                        charged to the plan or coverage, or 
                        participants and beneficiaries of the plan or 
                        coverage, during the applicable quarter, and, 
                        with respect to each drug--
                                    ``(I) the amounts charged, per 
                                dosage unit, per course of treatment, 
                                per 30-day supply, and per 90-day 
                                supply, with respect to participants 
                                and beneficiaries in the plan or 
                                coverage, including amounts charged to 
                                the plan or coverage and amounts 
                                charged to the participants and 
                                beneficiaries;
                                    ``(II) the median amount charged to 
                                the plan or coverage, per dosage unit, 
                                per course of treatment, per 30-day 
                                supply, and per 90-day supply, 
                                including amounts paid by the 
                                participants and beneficiaries, when 
                                the same drug is dispensed by other 
                                pharmacies that are not wholly or 
                                partially-owned by the issuer or entity 
                                and that are included in the pharmacy 
                                network of that plan or coverage;
                                    ``(III) the interquartile range of 
                                the costs, per dosage unit, per course 
                                of treatment, per 30-day supply, and 
                                per 90-day supply, including amounts 
                                paid by the participants and 
                                beneficiaries, when the same drug is 
                                dispensed by other pharmacies that are 
                                not wholly or partially-owned by the 
                                issuer or entity and that are included 
                                in the pharmacy network of that plan or 
                                coverage;
                                    ``(IV) the lowest cost, per dosage 
                                unit, per course of treatment, per 30-
                                day supply, and per 90-day supply, for 
                                such drug, including amounts charged to 
                                the plan or issuer and participants and 
                                beneficiaries, that is available from 
                                any pharmacy included in the network of 
                                the plan or coverage;
                                    ``(V) the net acquisition cost per 
                                dosage unit and for a 30 day-supply, 
                                and the acquisition cost per typical 
                                course of treatment, if the drug is 
                                subject to a maximum price discount; 
                                and
                                    ``(VI) other information with 
                                respect to the cost of the drug, as 
                                determined by the Secretary, such as 
                                average sales price, wholesale 
                                acquisition cost, and national average 
                                drug acquisition cost per dosage unit, 
                                per typical course of treatment, or per 
                                30-day supply, for such drug, including 
                                amounts charged to the plan or issuer 
                                and participants and beneficiaries 
                                among all pharmacies included in the 
                                network of the plan or coverage.
                    ``(B) Plans and coverage offered by small 
                employers.--A health insurance issuer offering covered 
                group health insurance coverage that is not covered 
                group health insurance coverage or an entity providing 
                pharmacy benefit management services under a group 
                health plan that is not a covered group health plan or 
                under group health insurance coverage that is not 
                covered group health insurance coverage that conducts 
                transactions with a wholly or partially-owned pharmacy 
                shall submit, together with the report under paragraph 
                (1), a supplementary report every 6 months to the plan 
                sponsor that includes the information described in 
                clauses (i) and (ii) of subparagraph (A).
            ``(3) Privacy requirements.--
                    ``(A) Relationship to hipaa regulations.--Nothing 
                in this section shall be construed to modify the 
                requirements for the creation, receipt, maintenance, or 
                transmission of protected health information under the 
                privacy, security, breach notification, and enforcement 
                regulations in parts 160 and 164 of title 45, Code of 
                Federal Regulations (or successor regulations).
                    ``(B) Requirement.--A report submitted under 
                paragraph (1) or (2) shall contain only summary health 
                information, as defined in section 164.504(a) of title 
                45, Code of Federal Regulations (or successor 
                regulations).
                    ``(C) Clarification regarding certain disclosures 
                of information.--
                            ``(i) Reasonable restrictions.--Nothing in 
                        this section prevents a health insurance issuer 
                        offering group health insurance coverage or an 
                        entity providing pharmacy benefit management 
                        services on behalf of a group health plan or 
                        group health insurance coverage from placing 
                        reasonable restrictions on the public 
                        disclosure of the information contained in a 
                        report under paragraph (1) or (2).
                            ``(ii) Limitations.--A health insurance 
                        issuer offering group health insurance coverage 
                        or an entity providing pharmacy benefit 
                        management services on behalf of a group health 
                        plan or group health insurance coverage may not 
                        restrict disclosure of such reports to the 
                        Department of Health and Human Services, the 
                        Department of Labor, the Department of the 
                        Treasury, or any other Federal agency 
                        responsible for enforcement activities under 
                        this section for purposes of enforcement under 
                        this section or other applicable law, or to the 
                        Comptroller General of the United States in 
                        accordance with paragraph (6).
            ``(4) Use and disclosure by plan sponsors.--
                    ``(A) Prohibition.--A plan sponsor may not--
                            ``(i) fail or refuse to hire, or discharge, 
                        any employee, or otherwise discriminate against 
                        any employee with respect to the compensation, 
                        terms, conditions, or privileges of employment 
                        of the employee, because of information 
                        submitted under paragraph (1) or (2) attributed 
                        to the employee or a dependent of the employee; 
                        or
                            ``(ii) limit, segregate, or classify the 
                        employees of the employer in any way that would 
                        deprive or tend to deprive any employee of 
                        employment opportunities or otherwise adversely 
                        affect the status of the employee as an 
                        employee, because of information submitted 
                        under paragraph (1) or (2) attributed to the 
                        employee or a dependent of the employee.
                    ``(B) Disclosure and redisclosure.--A plan sponsor 
                shall not disclose the information received under 
                paragraph (1) or (2) except--
                            ``(i) to an occupational or other health 
                        researcher if the research is conducted in 
                        compliance with the regulations and protections 
                        provided for under part 46 of title 45, Code of 
                        Federal Regulations (or successor regulations);
                            ``(ii) in response to an order of a court, 
                        except that the plan sponsor may disclose only 
                        the information expressly authorized by such 
                        order;
                            ``(iii) to the Department of Health and 
                        Human Services, the Department of Labor, the 
                        Department of the Treasury, or other Federal 
                        agency responsible for enforcement activities 
                        under this section; or
                            ``(iv) to a contractor or agent for 
                        purposes of health plan administration, if such 
                        contractor or agent agrees, in writing, to 
                        abide by the same use and disclosure 
                        restrictions as the plan sponsor.
                    ``(C) Relationship to hipaa regulations.--With 
                respect to the regulations promulgated by the Secretary 
                of Health and Human Services under part C of title XI 
                of the Social Security Act (42 U.S.C. 1320d et seq.) 
                and section 264 of the Health Insurance Portability and 
                Accountability Act of 1996 (42 U.S.C. 1320d-2), 
                subparagraph (B) does not prohibit a covered entity (as 
                defined for purposes of such regulations) from any use 
                or disclosure of health information that is authorized 
                for the covered entity under such regulations. The 
                previous sentence does not affect the authority of such 
                Secretary to modify such regulations.
                    ``(D) Enforcement.--
                            ``(i) In general.--The powers, procedures, 
                        and remedies provided in section 207 of the 
                        Genetic Information Nondiscrimination Act (42 
                        U.S.C. 2000ff-6) to a person alleging a 
                        violation of title II of such Act shall be the 
                        powers, procedures, and remedies this 
                        subparagraph provides for any person alleging a 
                        violation of this paragraph.
                            ``(ii) Prohibition against retaliation.--No 
                        person shall discriminate against any 
                        individual because such individual has opposed 
                        any act or practice made unlawful by this 
                        paragraph or because such individual made a 
                        charge, testified, assisted, or participated in 
                        any manner in an investigation, proceeding, or 
                        hearing under this paragraph. The remedies and 
                        procedures otherwise provided for under this 
                        subparagraph shall be available to aggrieved 
                        individuals with respect to violations of this 
                        clause.
            ``(5) Additional reporting.--
                    ``(A) Reporting with respect to group health plans 
                offered by small employers.--For plan years beginning 
                on or after January 1, 2025, not less frequently than 
                annually, an entity providing pharmacy benefit 
                management services on behalf of a group health plan 
                that is not a covered group health plan shall submit to 
                the plan sponsor of such group health plan a report in 
                accordance with this paragraph, and make such report 
                available to the plan sponsor in a machine-readable 
                format, and such other formats as the Secretary, the 
                Secretary of Health and Human Services, and the 
                Secretary of Labor may determine. Each such report 
                shall include, with respect to the applicable group 
                health plan, the information described in subparagraphs 
                (A), (D), (E), (F), (G), and (H) of paragraph (1).
                    ``(B) Opt-in for group health insurance coverage.--
                            ``(i) In general.--A plan sponsor may, on 
                        an annual basis, beginning with plan years 
                        beginning on or after January 1, 2025, elect to 
                        require a health insurance issuer offering 
                        group health insurance coverage to submit to 
                        such plan sponsor a report in accordance with 
                        this subsection.
                            ``(ii) Contents of reports.--
                                    ``(I) Covered group health 
                                insurance coverage.--In the case of an 
                                issuer that offers covered group health 
                                insurance coverage, a report provided 
                                pursuant to clause (i) shall include, 
                                with respect to the applicable covered 
                                group health insurance coverage, the 
                                information required under paragraph 
                                (1) for covered group health plans.
                                    ``(II) Other group health insurance 
                                coverage.--In the case of an issuer 
                                that offers group health insurance 
                                coverage that is not covered group 
                                health insurance, a report provided 
                                pursuant to clause (i) shall include, 
                                with respect to the applicable group 
                                health insurance coverage, the 
                                information described in subparagraphs 
                                (A), (D), (E), (F), and (G) of 
                                paragraph (1).
                            ``(iii) Application.--For purposes of 
                        reports submitted in accordance with this 
                        subparagraph, paragraph (1) shall be applied by 
                        substituting `group health insurance coverage' 
                        or `health insurance issuer', as applicable, 
                        for `group health plan', `group plan', and 
                        `plan' where such terms appear in such 
                        paragraph.
                            ``(iv) Required reporting for all group 
                        health insurance coverage.--Each health 
                        insurance issuer of health insurance coverage 
                        shall annually submit the information described 
                        in paragraph (1)(H), regardless of whether the 
                        plan sponsor made the election described in 
                        clause (i) for the applicable year.
            ``(6) Submissions to gao.--A health insurance issuer 
        offering group health insurance coverage or an entity providing 
        pharmacy benefit management services on behalf of a group 
        health plan shall submit to the Comptroller General of the 
        United States each of the first 2 reports submitted to a plan 
        sponsor under paragraph (1) or (5) with respect to such 
        coverage or plan, and other such reports as requested, in 
        accordance with the privacy requirements under paragraph (3), 
        and such other information that the Comptroller General 
        determines necessary to carry out the study under section 2(f) 
        of the Pharmacy Benefit Manager Reform Act.
            ``(7) Standard formats.--
                    ``(A) In general.--Not later than June 1, 2024, the 
                Secretary, the Secretary of Health and Human Services, 
                and the Secretary of the Treasury shall specify, 
                through rulemaking, standard formats for health 
                insurance issuers and entities providing pharmacy 
                benefit management services to submit reports required 
                under this subsection.
                    ``(B) Limited form of report.--The Secretary, the 
                Secretary of Health and Human Services, and the 
                Secretary of the Treasury shall define through 
                rulemaking a limited form of the reports under 
                paragraphs (1) and (2) required to be submitted to plan 
                sponsors who also are drug manufacturers, drug 
                wholesalers, entities providing pharmacy benefit 
                management services, or other direct participants in 
                the drug supply chain, in order to prevent anti-
                competitive behavior.
    ``(c) Limitations on Spread Pricing.--
            ``(1) In general.--For plan years beginning on or after 
        January 1, 2025, a group health plan or health insurance issuer 
        offering group health insurance coverage shall not charge 
        participants and beneficiaries, and an entity providing 
        pharmacy benefit management services under such a plan or 
        coverage shall not charge the plan, issuer, or participants and 
        beneficiaries, a price for a prescription drug that exceeds the 
        price paid to the pharmacy for such drug, excluding penalties 
        paid by the pharmacy (as described in paragraph (2)) to such 
        plan, issuer, or entity.
            ``(2) Rule of construction.--For purposes of paragraph (1), 
        penalties paid by pharmacies include only the following:
                    ``(A) A penalty paid if an original claim for a 
                prescription drug was submitted fraudulently by the 
                pharmacy to the plan, issuer, or entity.
                    ``(B) A penalty paid if the original claim payment 
                made by the plan, issuer, or entity to the pharmacy was 
                inconsistent with the reimbursement terms in any 
                contract between the pharmacy and the plan, issuer, or 
                entity.
                    ``(C) A penalty paid if the pharmacist services 
                billed to the plan, issuer, or entity were not rendered 
                by the pharmacy.
    ``(d) Full Rebate Pass-Through to Plan.--
            ``(1) In general.--For plan years beginning on or after 
        January 1, 2025, a third-party administrator of a group health 
        plan, a health insurance issuer offering group health insurance 
        coverage, or an entity providing pharmacy benefit management 
        services under such health plan or health insurance coverage 
        shall--
                    ``(A) remit 100 percent of rebates, fees, 
                alternative discounts, and other applicable 
                remuneration received from any applicable entity that 
                are related to utilization of drugs under such health 
                plan or health insurance coverage, to the group health 
                plan; and
                    ``(B) ensure that any contract entered into by such 
                third-party administrator, health insurance issuer, or 
                entity providing pharmacy benefit management services 
                with an applicable entity remit 100 percent of rebates, 
                fees, alternative discounts, and other remuneration 
                received to the third-party administrator, health 
                insurance issuer, or entity providing pharmacy benefit 
                management services.
            ``(2) Form and manner of remittance.--Such rebates, fees, 
        alternative discounts, and other remuneration shall be--
                    ``(A) remitted to the group health plan or group 
                health insurance coverage in a timely fashion after the 
                period for which such rebates, fees, alternative 
                discounts, or other remuneration is calculated, and in 
                no case later than 90 days after the end of such 
                period;
                    ``(B) fully disclosed and enumerated to the group 
                health plan sponsor, as described in paragraphs (1) and 
                (4) of subsection (b);
                    ``(C) available for audit by the plan sponsor, or a 
                third-party designated by a plan sponsor not less than 
                once per plan year; and
                    ``(D) returned to the issuer or entity providing 
                pharmaceutical benefit management services by the group 
                health plan if audits by such issuer or entity indicate 
                that the amounts received are incorrect after such 
                amounts have been paid to the group health plan.
            ``(3) Audit of rebate contracts.--A third-party 
        administrator of a group health plan, a health insurance issuer 
        offering group health insurance coverage, or an entity 
        providing pharmacy benefit management services under such 
        health plan or health insurance coverage shall make rebate 
        contracts with rebate aggregators or drug manufacturers 
        available for audit by such plan sponsor or designated third-
        party, subject to confidentiality agreements to prevent re-
        disclosure of such contracts.
            ``(4) Auditors.--The applicable plan sponsor may select an 
        auditor for purposes of carrying out audits under paragraphs 
        (2)(C) and (3).
            ``(5) Rule of construction.--Nothing in this subsection 
        shall be construed to prohibit payments to entities offering 
        pharmacy benefit management services for bona fide services 
        using a fee structure not contemplated by this subsection, 
        provided that such fees are transparent to group health plans 
        and health insurance issuers.
    ``(e) Enforcement.--
            ``(1) In general.--The Secretary, in consultation with the 
        Secretary of Health and Human Services and the Secretary of the 
        Treasury, shall enforce this section.
            ``(2) Failure to provide timely information.--A health 
        insurance issuer or an entity providing pharmacy benefit 
        management services that violates subsection (a) or fails to 
        provide information required under subsection (b); a group 
        health plan, health insurance issuer, or entity providing 
        pharmacy benefit management services that violates subsection 
        (c); or a third-party administrator of a group health plan, a 
        health insurance issuer offering group health insurance 
        coverage, or an entity providing pharmacy benefit management 
        services that violates subsection (d) shall be subject to a 
        civil monetary penalty in the amount of $10,000 for each day 
        during which such violation continues or such information is 
        not disclosed or reported.
            ``(3) False information.--A health insurance issuer, entity 
        providing pharmacy benefit management services, or drug 
        manufacturer that knowingly provides false information under 
        this section shall be subject to a civil money penalty in an 
        amount not to exceed $100,000 for each item of false 
        information. Such civil money penalty shall be in addition to 
        other penalties as may be prescribed by law.
            ``(4) Procedure.--The provisions of section 1128A of the 
        Social Security Act, other than subsections (a) and (b) and the 
        first sentence of subsection (c)(1) of such section shall apply 
        to civil monetary penalties under this subsection in the same 
        manner as such provisions apply to a penalty or proceeding 
        under section 1128A of the Social Security Act.
            ``(5) Waivers.--The Secretary may waive penalties under 
        paragraph (2), or extend the period of time for compliance with 
        a requirement of this section, for an entity in violation of 
        this section that has made a good-faith effort to comply with 
        this section.
    ``(f) Rule of Construction.--Nothing in this section shall be 
construed to permit a health insurance issuer, group health plan, or 
other entity to restrict disclosure to, or otherwise limit the access 
of, the Department of Labor to a report described in subsection (b)(1) 
or information related to compliance with subsection (a) by such 
issuer, plan, or entity.
    ``(g) Definitions.--In this section--
            ``(1) the term `applicable entity' means--
                    ``(A) a drug manufacturer, distributor, wholesaler, 
                rebate aggregator (or other purchasing entity designed 
                to aggregate rebates), group purchasing organization, 
                or associated third party;
                    ``(B) any subsidiary, parent, affiliate, or 
                subcontractor of a group health plan, health insurance 
                issuer, entity that provides pharmacy benefit 
                management services on behalf of such a plan or issuer, 
                or any entity described in subparagraph (A); or
                    ``(C) such other entity as the Secretary, the 
                Secretary of Health and Human Services, and the 
                Secretary of the Treasury may specify through 
                rulemaking;
            ``(2) the term `covered group health insurance coverage' 
        means health insurance coverage offered in connection with a 
        group health plan maintained by a large employer;
            ``(3) the term `covered group health plan' means a group 
        health plan maintained by a large employer;
            ``(4) the term `gross spending', with respect to 
        prescription drug benefits under a group health plan or health 
        insurance coverage, means the amount spent by a group health 
        plan or health insurance issuer on prescription drug benefits, 
        calculated before the application of manufacturer rebates, 
        fees, alternative discounts, or other remuneration;
            ``(5) the term `large employer' means, in connection with a 
        group health plan with respect to a calendar year and a plan 
        year, an employer who employed an average of at least 50 
        employees on business days during the preceding calendar year 
        and who employs at least 1 employee on the first day of the 
        plan year;
            ``(6) the term `net spending', with respect to prescription 
        drug benefits under a group health plan or health insurance 
        coverage, means the amount spent by a group health plan or 
        health insurance issuer on prescription drug benefits, 
        calculated after the application of manufacturer rebates, fees, 
        alternative discounts, or other remuneration;
            ``(7) the term `plan sponsor' has the meaning given such 
        term in section 3(16)(B);
            ``(8) the term `remuneration' has the meaning given such 
        term by the Secretary, the Secretary of Health and Human 
        Services, and the Secretary of the Treasury, through notice and 
        comment rulemaking;
            ``(9) the term `small employer' means, in connection with a 
        group health plan with respect to a calendar year and a plan 
        year, an employer who employed an average of at least 1 but not 
        more than 49 employees on business days during the preceding 
        calendar year and who employs at least 1 employee on the first 
        day of the plan year; and
            ``(10) the term `wholesale acquisition cost' has the 
        meaning given such term in section 1847A(c)(6)(B) of the Social 
        Security Act (42 U.S.C. 1395w-3a(c)(6)(B)).''; and
                    (B) in section 502(b)(3) (29 U.S.C. 1132(b)(3)), by 
                inserting ``(other than section 726)'' after ``part 
                7''.
            (2) Clerical amendment.--The table of contents in section 1 
        of the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1001 et seq.) is amended by inserting after the item 
        relating to section 725 the following new item:

``Sec. 726. Oversight of entities that provide pharmacy benefit 
                            management services.''.
    (c) Internal Revenue Code.--
            (1) 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. OVERSIGHT OF ENTITIES THAT PROVIDE PHARMACY BENEFIT 
              MANAGEMENT SERVICES.

    ``(a) In General.--For plan years beginning on or after January 1, 
2025, a group health plan or an entity providing pharmacy benefit 
management services on behalf of such a plan shall not enter into a 
contract with an applicable entity that limits the disclosure of 
information to plan sponsors in such a manner that prevents the plan, 
or an entity providing pharmacy benefit management services on behalf 
of a plan, from making the reports described in subsection (b).
    ``(b) Reports.--
            ``(1) In general.--For plan years beginning on or after 
        January 1, 2025, not less frequently than annually, an entity 
        providing pharmacy benefit management services on behalf of a 
        covered group health plan shall submit to the plan sponsor of 
        such covered group health plan a report in accordance with this 
        subsection and make such report available to the plan sponsor 
        in a machine-readable format and, as the Secretary may 
        determine, other formats. Each such report shall include, with 
        respect to the covered group health plan--
                    ``(A) as applicable, information collected from 
                drug manufacturers by such entity on the total amount 
                of copayment assistance dollars paid, or copayment 
                cards applied, that were funded by the drug 
                manufacturer with respect to the participants and 
                beneficiaries in such plan;
                    ``(B) a list of each drug covered by such plan or 
                entity providing pharmacy benefit management services 
                that was billed during the reporting period, including, 
                with respect to each such drug during the reporting 
                period--
                            ``(i) the brand name, generic or 
                        nonproprietary name, and National Drug Code;
                            ``(ii) the number of participants and 
                        beneficiaries for whom the drug was billed 
                        during the reporting period, the total number 
                        of prescription claims for the drug (including 
                        original prescriptions and refills), and the 
                        total number of dosage units of the drug 
                        dispensed across the reporting period;
                            ``(iii) for each claim or dosage unit 
                        described in clause (ii), the type of 
                        dispensing channel used, such as retail, mail 
                        order, or specialty pharmacy;
                            ``(iv) the wholesale acquisition cost, 
                        listed as cost per days supply, cost per dosage 
                        unit, and cost per typical course of treatment 
                        (as applicable);
                            ``(v) the total out-of-pocket spending by 
                        participants and beneficiaries on such drug 
                        after application of any benefits under the 
                        plan, including participant and beneficiary 
                        spending through copayments, coinsurance, and 
                        deductibles, but not including any amounts 
                        spent by participants and beneficiaries on 
                        drugs not covered under the plan or for which 
                        no claim is submitted to the plan; and
                            ``(vi) for any drug for which gross 
                        spending by the plan exceeded $10,000 and that 
                        is one of the 50 prescription drugs for which 
                        the group health plan spent the most on 
                        prescription drug benefits during the reporting 
                        period--
                                    ``(I) a list of all other drugs in 
                                the same therapeutic class, including 
                                brand name drugs and biological 
                                products and generic drugs or 
                                biosimilar biological products that are 
                                in the same therapeutic class as such 
                                drug; and
                                    ``(II) if applicable, the rationale 
                                for preferred formulary placement of 
                                such drug in that therapeutic class, 
                                selected from a list of standard 
                                rationales established by the 
                                Secretary;
                    ``(C) a list of each therapeutic class of drugs 
                that were dispensed under the health plan during the 
                reporting period, and, with respect to each such 
                therapeutic class of drugs, during the reporting 
                period--
                            ``(i) total gross spending by the plan, 
                        before rebates, fees, alternative discounts, or 
                        other remuneration;
                            ``(ii) the number of participants and 
                        beneficiaries who filled a prescription for a 
                        drug in that class;
                            ``(iii) if applicable to that class, a 
                        description of the formulary tiers and 
                        utilization management mechanisms (such as 
                        prior authorization or step therapy) employed 
                        for drugs in that class;
                            ``(iv) the total out-of-pocket spending by 
                        participants and beneficiaries, including 
                        participant and beneficiary spending through 
                        copayments, coinsurance, and deductibles; and
                            ``(v) for each therapeutic class under 
                        which 3 or more drugs are included on the 
                        formulary of such plan--
                                    ``(I) the amount received, or 
                                expected to be received, by such 
                                entity, from an applicable entity, in 
                                rebates, fees, alternative discounts, 
                                or other remuneration that--
                                            ``(aa) has been paid, or 
                                        will be paid, by such an 
                                        applicable entity for claims 
                                        incurred during the reporting 
                                        period; or
                                            ``(bb) is related to 
                                        utilization of drugs or drug 
                                        spending;
                                    ``(II) the total net spending by 
                                the health plan on that class of drugs; 
                                and
                                    ``(III) the net price per typical 
                                course of treatment or 30-day supply 
                                incurred by the health plan and its 
                                participants and beneficiaries, after 
                                rebates, fees, alternative discounts, 
                                or other remuneration provided by an 
                                applicable entity, for drugs dispensed 
                                within such therapeutic class during 
                                the reporting period;
                    ``(D) total gross spending on prescription drugs by 
                the plan during the reporting period, before rebates, 
                fees, alternative discounts, or other remuneration 
                provided by an applicable entity;
                    ``(E) the total amount received, or expected to be 
                received, by the health plan, from an applicable 
                entity, in rebates, fees, alternative discounts, and 
                other remuneration received from any such entities, 
                related to utilization of drug or drug spending under 
                that health plan during the reporting period;
                    ``(F) the total net spending on prescription drugs 
                by the health plan during the reporting period;
                    ``(G) amounts paid directly or indirectly in 
                rebates, fees, or any other type of compensation (as 
                defined in section 408(b)(2)(B)(ii)(dd)(AA) of the 
                Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1108(b)(2)(B)(ii)(dd)(A))) to brokers, 
                consultants, advisors, or any other individual or firm 
                who referred the group health plan's business to the 
                pharmacy benefit manager; and
                    ``(H) a summary document that includes such 
                information described in subparagraphs (A) through (G) 
                as the Secretary determines useful for plan sponsors 
                for purposes of selecting pharmacy benefit management 
                services, such as an estimated net price to plan 
                sponsor and participant or beneficiary, a cost per 
                claim, the fee structure or reimbursement model, and 
                estimated cost per participant or beneficiary.
            ``(2) Supplementary reporting for intra-company 
        prescription drug transactions.--
                    ``(A) In general.--An entity providing pharmacy 
                benefit management services under a covered group 
                health plan shall submit, together with the report 
                under paragraph (1), a supplementary report every 6 
                months to the plan sponsor that includes--
                            ``(i) an explanation of any benefit design 
                        parameters that encourage or require 
                        participants and beneficiaries in the plan to 
                        fill prescriptions at mail order, specialty, or 
                        retail pharmacies that are wholly or partially-
                        owned by that entity providing pharmacy benefit 
                        management services under such plan, including 
                        mandatory mail and specialty home delivery 
                        programs, retail and mail auto-refill programs, 
                        and copayment incentives funded by an entity 
                        providing pharmacy benefit management services;
                            ``(ii) the percentage of total 
                        prescriptions charged to the plan or 
                        participants and beneficiaries in the plan, 
                        that were dispensed by mail order, specialty, 
                        or retail pharmacies that are wholly or 
                        partially-owned by the entity providing 
                        pharmacy benefit management services; and
                            ``(iii) a list of all drugs dispensed by 
                        such wholly or partially-owned pharmacy and 
                        charged to the plan, or participants and 
                        beneficiaries of the plan, during the 
                        applicable quarter, and, with respect to each 
                        drug--
                                    ``(I) the amounts charged, per 
                                dosage unit, per course of treatment, 
                                per 30-day supply, and per 90-day 
                                supply, with respect to participants 
                                and beneficiaries in the plan, 
                                including amounts charged to the plan 
                                and amounts charged to the participants 
                                and beneficiaries;
                                    ``(II) the median amount charged to 
                                the plan, per dosage unit, per course 
                                of treatment, per 30-day supply, and 
                                per 90-day supply, including amounts 
                                paid by the participants and 
                                beneficiaries, when the same drug is 
                                dispensed by other pharmacies that are 
                                not wholly or partially-owned by the 
                                entity and that are included in the 
                                pharmacy network of that plan;
                                    ``(III) the interquartile range of 
                                the costs, per dosage unit, per course 
                                of treatment, per 30-day supply, and 
                                per 90-day supply, including amounts 
                                paid by the participants and 
                                beneficiaries, when the same drug is 
                                dispensed by other pharmacies that are 
                                not wholly or partially-owned by the 
                                entity and that are included in the 
                                pharmacy network of that plan;
                                    ``(IV) the lowest cost, per dosage 
                                unit, per course of treatment, per 30-
                                day supply, and per 90-day supply, for 
                                such drug, including amounts charged to 
                                the plan and participants and 
                                beneficiaries, that is available from 
                                any pharmacy included in the network of 
                                the plan;
                                    ``(V) the net acquisition cost per 
                                dosage unit and for a 30 day-supply, 
                                and the acquisition cost per typical 
                                course of treatment, if the drug is 
                                subject to a maximum price discount; 
                                and
                                    ``(VI) other information with 
                                respect to the cost of the drug, as 
                                determined by the Secretary, such as 
                                average sales price, wholesale 
                                acquisition cost, and national average 
                                drug acquisition cost per dosage unit, 
                                per typical course of treatment, or per 
                                30-day supply, for such drug, including 
                                amounts charged to the plan and 
                                participants and beneficiaries among 
                                all pharmacies included in the network 
                                of the plan.
                    ``(B) Plans offered by small employers.--An entity 
                providing pharmacy benefit management services under a 
                group health plan that is not a covered group health 
                plan that conducts transactions with a wholly or 
                partially-owned pharmacy shall submit, together with 
                the report under paragraph (1), a supplementary report 
                every 6 months to the plan sponsor that includes the 
                information described in clauses (i) and (ii) of 
                subparagraph (A).
            ``(3) Privacy requirements.--
                    ``(A) Relationship to hipaa regulations.--Nothing 
                in this section shall be construed to modify the 
                requirements for the creation, receipt, maintenance, or 
                transmission of protected health information under the 
                privacy, security, breach notification, and enforcement 
                regulations in parts 160 and 164 of title 45, Code of 
                Federal Regulations (or successor regulations).
                    ``(B) Requirement.--A report submitted under 
                paragraph (1) or (2) shall contain only summary health 
                information, as defined in section 164.504(a) of title 
                45, Code of Federal Regulations (or successor 
                regulations).
                    ``(C) Clarification regarding certain disclosures 
                of information.--
                            ``(i) Reasonable restrictions.--Nothing in 
                        this section prevents an entity providing 
                        pharmacy benefit management services on behalf 
                        of a group health plan from placing reasonable 
                        restrictions on the public disclosure of the 
                        information contained in a report under 
                        paragraph (1) or (2).
                            ``(ii) Limitations.--An entity providing 
                        pharmacy benefit management services on behalf 
                        of a group health plan or group health 
                        insurance coverage may not restrict disclosure 
                        of such reports to the Department of Health and 
                        Human Services, the Department of Labor, the 
                        Department of the Treasury, or any other 
                        Federal agency responsible for enforcement 
                        activities under this section for purposes of 
                        enforcement under this section or other 
                        applicable law, or to the Comptroller General 
                        of the United States in accordance with 
                        paragraph (6).
            ``(4) Use and disclosure by plan sponsors.--
                    ``(A) Prohibition.--A plan sponsor may not--
                            ``(i) fail or refuse to hire, or discharge, 
                        any employee, or otherwise discriminate against 
                        any employee with respect to the compensation, 
                        terms, conditions, or privileges of employment 
                        of the employee, because of information 
                        submitted under paragraph (1) or (2) attributed 
                        to the employee or a dependent of the employee; 
                        or
                            ``(ii) limit, segregate, or classify the 
                        employees of the employer in any way that would 
                        deprive or tend to deprive any employee of 
                        employment opportunities or otherwise adversely 
                        affect the status of the employee as an 
                        employee, because of information submitted 
                        under paragraph (1) or (2) attributed to the 
                        employee or a dependent of the employee.
                    ``(B) Disclosure and redisclosure.--A plan sponsor 
                shall not disclose the information received under 
                paragraph (1) or (2) except--
                            ``(i) to an occupational or other health 
                        researcher if the research is conducted in 
                        compliance with the regulations and protections 
                        provided for under part 46 of title 45, Code of 
                        Federal Regulations (or successor regulations);
                            ``(ii) in response to an order of a court, 
                        except that the plan sponsor may disclose only 
                        the information expressly authorized by such 
                        order;
                            ``(iii) to the Department of Health and 
                        Human Services, the Department of Labor, the 
                        Department of the Treasury, or other Federal 
                        agency responsible for enforcement activities 
                        under this section; or
                            ``(iv) to a contractor or agent for 
                        purposes of health plan administration, if such 
                        contractor or agent agrees, in writing, to 
                        abide by the same use and disclosure 
                        restrictions as the plan sponsor.
                    ``(C) Relationship to hipaa regulations.--With 
                respect to the regulations promulgated by the Secretary 
                of Health and Human Services under part C of title XI 
                of the Social Security Act (42 U.S.C. 1320d et seq.) 
                and section 264 of the Health Insurance Portability and 
                Accountability Act of 1996 (42 U.S.C. 1320d-2), 
                subparagraph (B) does not prohibit a covered entity (as 
                defined for purposes of such regulations) from any use 
                or disclosure of health information that is authorized 
                for the covered entity under such regulations. The 
                previous sentence does not affect the authority of such 
                Secretary to modify such regulations.
                    ``(D) Enforcement.--
                            ``(i) In general.--The powers, procedures, 
                        and remedies provided in section 207 of the 
                        Genetic Information Nondiscrimination Act (42 
                        U.S.C. 2000ff-6) to a person alleging a 
                        violation of title II of such Act shall be the 
                        powers, procedures, and remedies this 
                        subparagraph provides for any person alleging a 
                        violation of this paragraph.
                            ``(ii) Prohibition against retaliation.--No 
                        person shall discriminate against any 
                        individual because such individual has opposed 
                        any act or practice made unlawful by this 
                        paragraph or because such individual made a 
                        charge, testified, assisted, or participated in 
                        any manner in an investigation, proceeding, or 
                        hearing under this paragraph. The remedies and 
                        procedures otherwise provided for under this 
                        subparagraph shall be available to aggrieved 
                        individuals with respect to violations of this 
                        clause.
            ``(5) Reporting with respect to group health plans offered 
        by small employers.--For plan years beginning on or after 
        January 1, 2025, not less frequently than annually, an entity 
        providing pharmacy benefit management services on behalf of a 
        group health plan that is not a covered group health plan shall 
        submit to the plan sponsor of such group health plan a report 
        in accordance with this paragraph, and make such report 
        available to the plan sponsor in a machine-readable format. 
        Each such report shall include, with respect to the applicable 
        group health plan, the information described in subparagraphs 
        (A), (D), (E), (F), (G), and (H) of paragraph (1).
            ``(6) Submissions to gao.--An entity providing pharmacy 
        benefit management services on behalf of a group health plan 
        shall submit to the Comptroller General of the United States 
        each of the first 2 reports submitted to a plan sponsor under 
        paragraph (1) or (5) with respect to such plan, and other such 
        reports as requested, in accordance with the privacy 
        requirements under paragraph (3), and such other information 
        that the Comptroller General determines necessary to carry out 
        the study under section 2(f) of the Pharmacy Benefit Manager 
        Reform Act.
            ``(7) Standard formats.--
                    ``(A) In general.--Not later than June 1, 2024, the 
                Secretary, the Secretary of Health and Human Services, 
                and the Secretary of Labor shall specify, through 
                rulemaking, standard formats for health insurance 
                issuers and entities providing pharmacy benefit 
                management services to submit reports required under 
                this subsection.
                    ``(B) Limited form of report.--The Secretary, the 
                Secretary of Health and Human Services, and the 
                Secretary of Labor shall define through rulemaking a 
                limited form of the reports under paragraphs (1) and 
                (2) required to be submitted to plan sponsors who also 
                are drug manufacturers, drug wholesalers, entities 
                providing pharmacy benefit management services, or 
                other direct participants in the drug supply chain, in 
                order to prevent anti-competitive behavior.
    ``(c) Limitations on Spread Pricing.--
            ``(1) In general.--A group health plan shall not charge 
        participants and beneficiaries, and an entity providing 
        pharmacy benefit management services under such a plan shall 
        not charge the plan or participants and beneficiaries, a price 
        for a prescription drug that exceeds the price paid to the 
        pharmacy for such drug, excluding penalties paid by the 
        pharmacy (as described in paragraph (2)) to such plan or 
        entity.
            ``(2) Rule of construction.--For purposes of paragraph (1), 
        penalties paid by pharmacies include only the following:
                    ``(A) A penalty paid if an original claim for a 
                prescription drug was submitted fraudulently by the 
                pharmacy to the plan or entity.
                    ``(B) A penalty paid if the original claim payment 
                made by the plan, issuer, or entity to the pharmacy was 
                inconsistent with the reimbursement terms in any 
                contract between the pharmacy and the plan or entity.
                    ``(C) A penalty paid if the pharmacist services 
                billed to the plan or entity were not rendered by the 
                pharmacy.
    ``(d) Full Rebate Pass-Through to Plan.--
            ``(1) In general.--For plan years beginning on or after 
        January 1, 2025, a third-party administrator of a group health 
        plan or an entity providing pharmacy benefit management 
        services under such health plan shall--
                    ``(A) remit 100 percent of rebates, fees, 
                alternative discounts, and other remuneration received 
                from any applicable entity that are related to 
                utilization of drugs under such health plan, to the 
                group health plan; and
                    ``(B) ensure that any contract entered into by such 
                third-party administrator or entity providing pharmacy 
                benefit management services with an applicable entity 
                remit 100 percent of rebates, fees, alternative 
                discounts, and other remuneration received to the 
                third-party administrator or entity providing pharmacy 
                benefit management services.
            ``(2) Form and manner of remittance.--Such rebates, fees, 
        alternative discounts, and other remuneration shall be--
                    ``(A) remitted to the group health plan in a timely 
                fashion after the period for which such rebates, fees, 
                alternative discounts, or other remuneration is 
                calculated, and in no case later than 90 days after the 
                end of such period;
                    ``(B) fully disclosed and enumerated to the group 
                health plan sponsor, as described in paragraphs (1) and 
                (4) of subsection (b);
                    ``(C) available for audit by the plan sponsor, or a 
                third-party designated by a plan sponsor not less than 
                once per plan year; and
                    ``(D) returned to the issuer or entity providing 
                pharmaceutical benefit management services by the group 
                health plan if audits by such entity indicate that the 
                amounts received are incorrect after such amounts have 
                been paid to the group health plan.
            ``(3) Audit of rebate contracts.--A third-party 
        administrator of a group health plan or an entity providing 
        pharmacy benefit management services under such health plan 
        shall make rebate contracts with rebate aggregators or drug 
        manufacturers available for audit by such plan sponsor or 
        designated third-party, subject to confidentiality agreements 
        to prevent re-disclosure of such contracts.
            ``(4) Auditors.--The applicable plan sponsor may select an 
        auditor for purposes of carrying out audits under paragraphs 
        (2)(C) and (3).
            ``(5) Rule of construction.--Nothing in this subsection 
        shall be construed to prohibit payments to entities offering 
        pharmacy benefit management services for bona fide services 
        using a fee structure not contemplated by this subsection, 
        provided that such fees are transparent to group health plans.
    ``(e) Enforcement.--
            ``(1) In general.--The Secretary, in consultation with the 
        Secretary of Labor and the Secretary of Health and Human 
        Services, shall enforce this section.
            ``(2) Failure to provide timely information.--A health 
        insurance issuer or an entity providing pharmacy benefit 
        management services that violates subsection (a) or fails to 
        provide information required under subsection (b); a group 
        health plan or entity providing pharmacy benefit management 
        services that violates subsection (c); or a third-party 
        administrator of a group health plan or an entity providing 
        pharmacy benefit management services that violates subsection 
        (d) shall be subject to a civil monetary penalty in the amount 
        of $10,000 for each day during which such violation continues 
        or such information is not disclosed or reported.
            ``(3) False information.--An entity providing pharmacy 
        benefit management services, or drug manufacturer that 
        knowingly provides false information under this section shall 
        be subject to a civil money penalty in an amount not to exceed 
        $100,000 for each item of false information. Such civil money 
        penalty shall be in addition to other penalties as may be 
        prescribed by law.
            ``(4) Procedure.--The provisions of section 1128A of the 
        Social Security Act, other than subsections (a) and (b) and the 
        first sentence of subsection (c)(1) of such section shall apply 
        to civil monetary penalties under this subsection in the same 
        manner as such provisions apply to a penalty or proceeding 
        under section 1128A of the Social Security Act.
            ``(5) Waivers.--The Secretary may waive penalties under 
        paragraph (2), or extend the period of time for compliance with 
        a requirement of this section, for an entity in violation of 
        this section that has made a good-faith effort to comply with 
        this section.
    ``(f) Rule of Construction.--Nothing in this section shall be 
construed to permit a group health plan or other entity to restrict 
disclosure to, or otherwise limit the access of, the Department of the 
Treasury to a report described in subsection (b)(1) or information 
related to compliance with subsection (a) by such plan or entity.
    ``(g) Definitions.--In this section--
            ``(1) the term `applicable entity' means--
                    ``(A) a drug manufacturer, distributor, wholesaler, 
                rebate aggregator (or other purchasing entity designed 
                to aggregate rebates), group purchasing organization, 
                or associated third party;
                    ``(B) any subsidiary, parent, affiliate, or 
                subcontractor of a group health plan, health insurance 
                issuer, entity that provides pharmacy benefit 
                management services on behalf of such a plan or issuer, 
                or any entity described in subparagraph (A); or
                    ``(C) such other entity as the Secretary, the 
                Secretary of Health and Human Services, and the 
                Secretary of Labor may specify through rulemaking;
            ``(2) the term `covered group health insurance coverage' 
        means health insurance coverage offered in connection with a 
        group health plan maintained by a large employer;
            ``(3) the term `covered group health plan' means a group 
        health plan maintained by a large employer;
            ``(4) the term `gross spending', with respect to 
        prescription drug benefits under a group health plan or health 
        insurance coverage, means the amount spent by a group health 
        plan or health insurance issuer on prescription drug benefits, 
        calculated before the application of manufacturer rebates, 
        fees, alternative discounts, or other remuneration;
            ``(5) the term `large employer' means, in connection with a 
        group health plan with respect to a calendar year and a plan 
        year, an employer who employed an average of at least 50 
        employees on business days during the preceding calendar year 
        and who employs at least 1 employee on the first day of the 
        plan year;
            ``(6) the term `net spending', with respect to prescription 
        drug benefits under a group health plan or health insurance 
        coverage, means the amount spent by a group health plan or 
        health insurance issuer on prescription drug benefits, 
        calculated after the application of manufacturer rebates, fees, 
        alternative discounts, or other remuneration;
            ``(7) the term `plan sponsor' has the meaning given such 
        term in section 3(16)(B) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1002(16)(B));
            ``(8) the term `remuneration' has the meaning given such 
        term by the Secretary, the Secretary of Labor, and the 
        Secretary of Health and Human Services, through notice and 
        comment rulemaking;
            ``(9) the term `small employer' means, in connection with a 
        group health plan with respect to a calendar year and a plan 
        year, an employer who employed an average of at least 1 but not 
        more than 49 employees on business days during the preceding 
        calendar year and who employs at least 1 employee on the first 
        day of the plan year; and
            ``(10) the term `wholesale acquisition cost' has the 
        meaning given such term in section 1847A(c)(6)(B) of the Social 
        Security Act (42 U.S.C. 1395w-3a(c)(6)(B)).''.
            (2) 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 new item:

``Sec. 9826. Oversight of entities that provide pharmacy benefit 
                            management services.''.
    (d) Funding.--
            (1) For purposes of carrying out the amendments made by 
        subsection (a), there are appropriated to the Centers for 
        Medicare & Medicaid Services, out of amounts in the Treasury 
        not otherwise appropriated, $80,000,000 for fiscal year 2024.
            (2) For purposes of carrying out the amendments made by 
        subsection (b), there are appropriated to the Department of 
        Labor, out of amounts in the Treasury not otherwise 
        appropriated, $43,750,000 for fiscal year 2024.
    (e) ASPE Study.--The Assistant Secretary for Planning and 
Evaluation of the Department of Health and Human Services shall conduct 
or commission a study on how the United States health care market would 
be impacted by potential regulatory changes disallowing manufacturer 
rebates in the manner and to the extent allowed on the date of 
enactment of this Act, with a focus on the impact to stakeholders in 
the commercial insurance market, and, not later than 1 year after the 
date of enactment of this Act, submit a report to Congress on the 
results of such study. Such study and report shall consider the 
following:
            (1) The impact on the impact of making no such regulatory 
        changes, as well as potential behavioral changes by plan 
        sponsors, members, and pharmaceutical manufacturers, such as 
        tighter formularies, changes to price concessions, changes in 
        utilization, if such regulatory changes are made.
            (2) The mechanics needed in the pharmaceutical supply chain 
        (whether existing or not) to move a manufacturer rebate to the 
        point of sale.
            (3) The feasibility of a partial point-of-sale manufacturer 
        rebate versus a full point-of-sale manufacturer rebate.
            (4) The impact on patient out-of-pocket costs, premiums, 
        and other cost-sharing.
            (5) Possible behavioral changes by other third parties in 
        the pharmaceutical supply chain including drug manufacturer, 
        distributor, wholesaler, rebate aggregators, pharmacy services 
        administrative organizations, or group purchasing 
        organizations.
            (6) Behavioral changes between entities that contract with 
        pharmaceutical manufacturers and pharmaceutical supply chain.
            (7) Alternative price negotiation mechanisms, including the 
        impact of the Act of June 19, 1936 (commonly known as the 
        ``Robinson-Patman Act''; 49 Stat. 1526, chapter 592; 15 U.S.C. 
        13a et seq.), and the amendments made by that Act, on drug 
        pricing negotiations.
            (8) The impact on pharmacies, including pharmacy rebates, 
        pharmacy fees, and dispensing channels.
    (f) GAO Study.--
            (1) In general.--Not later than January 1, 2029, the 
        Comptroller General of the United States shall report to 
        Congress on--
                    (A) pharmacy networks of group health plans, health 
                insurance issuers, and entities providing pharmacy 
                benefit management services under such group health 
                plan or group or individual health insurance coverage, 
                including networks that have pharmacies that are under 
                common ownership (in whole or part) with group health 
                plans, health insurance issuers, or entities providing 
                pharmacy benefit management services or pharmacy 
                benefit administrative services under group health plan 
                or group or individual health insurance coverage;
                    (B) as it relates to pharmacy networks that include 
                pharmacies under common ownership described in 
                subparagraph (A)--
                            (i) whether such networks are designed to 
                        encourage participants and beneficiaries of a 
                        plan or coverage to use such pharmacies over 
                        other network pharmacies for specific services 
                        or drugs, and if so, the reasons the networks 
                        give for encouraging use of such pharmacies; 
                        and
                            (ii) whether such pharmacies are used by 
                        participants and beneficiaries 
                        disproportionately more in the aggregate or for 
                        specific services or drugs compared to other 
                        network pharmacies;
                    (C) whether group health plans and health insurance 
                issuers offering group or individual health insurance 
                coverage have options to elect different network 
                pricing arrangements in the marketplace with entities 
                that provide pharmacy benefit management services, the 
                prevalence of electing such different network pricing 
                arrangements;
                    (D) pharmacy network design parameters that 
                encourage participants and beneficiaries in the plan or 
                coverage to fill prescriptions at mail order, 
                specialty, or retail pharmacies that are wholly or 
                partially-owned by that issuer or entity; and
                    (E) the degree to which mail order, specialty, or 
                retail pharmacies that dispense prescription drugs to 
                participants and beneficiaries in a group health plan 
                or health insurance coverage that are under common 
                ownership (in whole or part) with group health plans, 
                health insurance issuers, or entities providing 
                pharmacy benefit management services or pharmacy 
                benefit administrative services under group health plan 
                or group or individual health insurance coverage 
                receive reimbursement that is greater than the median 
                price charged to the group health plan or health 
                insurance issuer when the same drug is dispensed to 
                participants and beneficiaries in the plan or coverage 
                by other pharmacies included in the pharmacy network of 
                that plan, issuer, or entity that are not wholly or 
                partially owned by the health insurance issuer or 
                entity providing pharmacy benefit management services.
            (2) Requirement.--In carrying out paragraph (1), the 
        Comptroller General of the United States shall not disclose--
                    (A) information that would allow for identification 
                of a specific individual, plan sponsor, health 
                insurance issuer, plan, or entity providing pharmacy 
                benefit management services; or
                    (B) commercial or financial information that is 
                privileged or confidential.
            (3) Definitions.--In this subsection, the terms ``group 
        health plan'', ``health insurance coverage'', and ``health 
        insurance issuer'' have the meanings given such terms in 
        section 2791 of the Public Health Service Act (42 U.S.C. 300gg-
        91).
                                 <all>