,i #aac? ,,congress #a/ ,session ,h4 ,r4 #acfg ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,m>* #ba1 #bjac ,mr4 ,lyn* 7= himself1 ,mr4 ,cumm+s1 ,mr4 ,moran1 & ,ms4 ,norton7 introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,ov]sight & ,gov]nm5t ,re=m ,a ,,bill ,to am5d *apt] #hi ( title #e1 ,unit$ ,/ates ,code1 to ensure program integrity1 transp>5cy1 & co/ sav+s 9 ! pric+ & contract+ ( prescription drug b5efits "u ! ,f$]al ,employees ,heal? ,b5efits ,program4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,,fehbp ,prescription ,drug ,integrity1 ,transp>5cy1 & ,co/ ,sav+s ,act4 #b4 ,improv$ program integrity1 transp>5cy1 & co/ sav+s = prescription drug b5efits 9 ! ,f$]al ,employees ,heal? ,b5efits ,program 7a7 ,*ange 9 contract+ requirem5ts ,section #hijb ( title #e1 ,unit$ ,/ates ,code1 is am5d$ by add+ at ! end ! foll[+3 7p7 ,a contract may n be made or a plan approv$ "u ?is *apt]1 ) respect to a c>ri] t is a p>ty to a ,,pbm c>ri] arrangem5t1 unless ! ,,pbm & su* c>ri] comply ) ! requirem5ts ( section #hiae4 ,! ,(fice %all t]m9ate su* contract or discont9ue su* plan = failure to comply ) su* requirem5ts4 4 7b7 ,requirem5ts = ,p,b,ms & relat$ requirem5ts = c>ri]s ,*apt] #hi ( title #e1 ,unit$ ,/ates ,code1 is am5d$ by add+ at ! end ! foll[+3 #hiae4 ,requirem5ts = ,,pbm arrangem5ts 7a7 ,limitations on ,cross-,own]%ip 7#a7 ,9 g5]al ,"u a ,,pbm c>ri] arrangem5t a ,,pbm may n be "u common corporate control )-- 7,a7 a prescription drug manufactur]2 or 7,b7 a retail ph>macy4 7#b7 ,pr(it re/riction on corporately affiliat$ c>ri]s & ,p,b,ms ,) respect to a ,,pbm c>ri] arrangem5t relat$ to a contract "u ?is *apt]1 ! ,(fice may n p]mit a c>ri] "u common corporate control ) a ,,pbm to e>n a pr(it result+ f su* control4 7#c7 ,c]tification ,ea* c>ri] %all c]tify annually to ! ,(fice ( ,p]sonnel ,managem5t t any ,,pbm ) :i* x has a ,,pbm c>ri] arrangem5t meets ! requirem5ts ( ?is subsection4 7#d7 ,def9itions ,= purposes ( ?is subsection-- 7,a7 ,common corporate control ,! t]m common corporate control means t #b entities are "p ( a controll$ gr\p ( corporations 7z su* t]m is def9$ 9 section #aefc ( ! ,int]nal ,rev5ue ,code ( #aihf74 7,b7 ,retail ph>macy ,! t]m retail ph>macy excludes any mail ord] ph>macy4 7b7 ,re/rictions on br& "n prescription drug sub/itutions 7#a7 ,9 g5]al ,"u a ,,pbm c>ri] arrangem5t1 & ) respect to a prescription drug prescrib$ to an enrollee cov]$ "u su* arrangem5t1 a ,,pbm may n reque/ paym5t f a c>ri] = a br& "n prescription drug t 0 disp5s$ to ! enrollee1 at ! reque/ ( ! ,,pbm1 9 sub/itution = ! drug t 0 orig9ally prescrib$ to su* enrollee1 unless ea* ( ! foll[+ requirem5ts is met3 7,a7 ,l[] net co/ ,! sub/itute drug has a l[] net co/ ?an ! drug orig9ally prescrib$ to su* enrollee4 7,b7 ,au?orization by prescrib] ,! prescrib] ( ! orig9ally prescrib$ drug submits an express1 v]ifiable au?orization ( ! sub/itution to ! ph>maci/ & su* au?orization includes a det]m9ation by ! prescrib] t ! drug sub/itution w n endang] ! heal? ( ! enrollee = :om ! drug is prescrib$4 7,c7 ,additional requirem5ts ,ea* ( ! requirem5ts describ$ 9 p>agraph 7#b7 are met4 7#b7 ,additional requirem5ts ,! requirem5ts describ$ 9 ?is p>agraph are1 ) respect to a br& "n prescription drug t 0 disp5s$ to an enrollee1 at ! reque/ ( ! ,,pbm1 9 sub/itution = ! drug t 0 orig9ally prescrib$ to su* enrollee1 ! foll[+3 7,a7 ,to ! ext5t appropriate1 ! ,,pbm consults ! enrollee conc]n+ su* drug sub/itution4 7,b7 ,! ,,pbm discloses to ! prescrib] ( ! orig9ally prescrib$ drug1 ! c>ri]1 & ! enrollee = :om su* drug 0 prescrib$-- 7i7 ! reason :y ! ,,pbm propos$ a drug sub/itution = su* drug2 & 7ii7 ! f9ancial impact ( ! drug sub/itution on ! ,,pbm1 ! c>ri]1 & ! enrollee4 7,c7 ,9 ! case ( a mail ord] ph>macy1 ! ,,pbm ensures t1 at ! "t ! drug is disp5s$1 ! enrollee receives a writt5 notice t su* drug sub/itution occurr$ & t su* sub/itution occurr$ ) ! approval ( ! prescrib]4 7#c7 ,def9itions ,= purposes ( ?is subsection-- 7,a7 ,br& "n prescription drug ,! t]m br& "n prescription drug means a drug approv$ pursuant to an application submitt$ "u section #eje7;b7 ( ! ,f$]al ,food1 ,drug1 & ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;b774 7,b7 ,net co/ ,! t]m net co/ means1 ) respect to a drug1 a c>ri]1 & an enrollee1 ! sum (-- 7i7 ! f9al co/ ( ! drug to ! c>ri] aft] all adju/m5ts 7includ+ disc\nts1 rebates1 associat$ disp5s+ fees & adm9i/rative fees1 & enrollee co/ %>+72 & 7ii7 ! f9al co/ ( ! drug to ! enrollee 7includ+ co/-%>+74 7,c7 ,prescrib] ,! t]m prescrib] means an individual :o is au?oriz$ "u ,/ate & ,f$]al law to prescribe drugs & :o prescribes a drug to an enrollee ( a heal? b5efits plan "u ?is *apt]4 7c7 ,reimbursem5t ( c>ri]s ,"u a ,,pbm c>ri] arrangem5t1 n lat] ?an ! la/ day ( ea* qu>t] ( ! contract ye>-- 7#a7 ! ,,pbm %all pay to a c>ri] an am\nt t is at lea/ #ii p]c5t ( ! sum (-- 7,a7 all comp5sation t ! ,,pbm receiv$ dur+ ! previ\s qu>t] f a prescription drug manufactur] "u a ,,pbm manufactur] contract 7to ! ext5t su* arrangem5t relates to ! ,,pbm c>ri] arrangem5t7 includ+ comp5sation 7b exclud+ rebates7 t ! ,(fice ( ,p]sonnel ,managem5t categorizes 7reg>dless ( h[ su* comp5sation is categoriz$ by ! ,,pbm7 z-- 7i7 m>ket %>e inc5tives2 7ii7 prescription drug sub/itution programs2 7iii7 educational support2 7iv7 commissions2 7v7 mail s]vice pur*ase disc\nts2 7vi7 adm9i/rative or managem5t fees2 or 7vii7 any o!r =m ( comp5sation2 7,b7 all comp5sation receiv$ by ! ,,pbm dur+ ! previ\s qu>t] = sales ( utilization or claims data t ! ,,pbm possesses z a result ( ! ,,pbm c>ri] arrangem5t2 & 7,c7 all rebates paid to ! ,,pbm dur+ ! previ\s qu>t] by a prescription drug manufactur] to ! ext5t t su* rebates are bas$ on prescription drugs disp5s$ "u ! ,,pbm c>ri] arrangem5t2 & 7#b7 ! ,,pbm %all disclose to ! c>ri] & ! ,(fice1 9 a =m & mann] specifi$ by ! ,(fice-- 7,a7 ! comp5sation describ$ 9 p>agraph 7#a77;,a71 by ! am\nt ( comp5sation = ea* category "u su* p>agraph2 7,b7 ! comp5sation describ$ 9 p>agraph 7#a77;,b72 & 7,c7 ! rebates describ$ 9 p>agraph 7#a77;,c71 on a drug-by-drug basis4 7d7 ,sale ( utilization & claims data ,"u a ,,pbm c>ri] arrangem5t1 if ! ,,pbm int5ds to sell utilization or claims data t ! ,,pbm possesses z a result ( su* arrangem5t-- 7#a7 ! ,,pbm %all notify ! ,(fice ( ,p]sonnel ,managem5t be=e sell+ su* data & %all provide ! ,(fice ) ! "n ( ! pot5tial pur*as] ( su* data & ! expect$ use ( su* data by su* pur*as]2 & 7#b7 ! ,,pbm may n sell su* data unless ! sale complies ) all ,f$]al & ,/ate laws & ! ,,pbm has receiv$ approval = su* sale f ! ,(fice4 7e7 ,pric+ 7#a7 ,spread pric+ 7,a7 ,limitation on *>ges to a c>ri] ,a ,,pbm "u a ,,pbm c>ri] arrangem5t %all n *>ge a c>ri] an am\nt = a prescription drug t is cov]$ "u su* arrangem5t 7& is disp5s$ by a ph>macy7 t is m ?an ! am\nt 7includ+ ! +r$i5t co/ & ! disp5s+ fee7 t ! ,,pbm reimburses ! ph>macy = ! drug4 7,b7 ,disclosures 7i7 ,initial disclosure ,be=e ent]+ into a ,,pbm c>ri] arrangem5t1 ! ,,pbm %all disclose to ! c>ri] & ! ,(fice ( ,p]sonnel ,managem5t ! reimbursem5t basis 7includ+ ! type ( b5*m>k price & ! s\rce ( ! data = det]m9+ su* price7 & me?odology t ! ,,pbm uses to compute reimbursem5t am\nts = retail & mail ord] ph>macies4 7ii7 ,updates ,n lat] ?an #cj days aft] mak+ a *ange to ! reimbursem5t basis or me?odology "u clause 7i71 ! ,,pbm %all disclose su* *ange to ! c>ri] & ! ,(fice4 7iii7 ,transition rule ,9 ! case ( a ,,pbm c>ri] arrangem5t t is 9 effect on ! effective date ( ! ,,fehbp ,prescription ,drug ,integrity1 ,transp>5cy1 & ,co/ ,sav+s ,act1 ! ,,pbm %all disclose ! in=mation "u clause 7i7 n lat] ?an #a ye> aft] su* date4 7#b7 ,maximum = mail ord] prescription drugs prices & disp5s+ fees 7,a7 ,9 g5]al ,if a prescription drug is suppli$ by a mail ord] ph>macy to an enrollee1 "u a ,,pbm c>ri] arrangem5t1 a ,,pbm may n *>ge a c>ri] an am\nt = ! +r$i5t co/ = su* prescription drug t is great] ?an an am\nt t is equal to ! actual acquisition co/ = ! drug m9us any co/ %>+ = su* drug t is ! responsibility ( ! enrollee4 7,b7 ,disp5s+ fee ,"u a ,,pbm c>ri] arrangem5t1 a ,,pbm may n *>ge a c>ri] an am\nt = a disp5s+ fee relat$ to a prescription drug disp5s$ by a mail ord] ph>macy to an enrollee t is great] ?an ! am\nt t ! ,,pbm *>ges heal? plans = simil> s]vices t are n cov]$ "u a ,,pbm c>ri] arrangem5t4 7,c7 ,transp>5cy ,"u a ,,pbm c>ri] arrangem5t1 a ,,pbm %all provide ! c>ri] & ! ,(fice ( ,p]sonnel ,managem5t1 at ! reque/ ( su* c>ri] or ,(fice1 in=mation on ! me?od us$ to det]m9e ! am\nt (-- 7i7 ! +r$i5t co/ "u subp>agraph 7,a72 & 7ii7 ! disp5s+ fee "u subp>agraph 7,b74 7,d7 ,actual acquisition co/ def9$ ,= purposes ( ?is p>agraph1 ! t]m actual acquisition co/ means ! am\nt a ph>macy pays = a prescription drug1 net ( disc\nts1 rebates1 *>ge backs1 & o!r adju/m5ts to ! price ( ! drug4 7f7 ,"r to explanation ( b5efits ,"u a ,,pbm c>ri] arrangem5t1 n lat] ?an #ij days aft] ! date on :i* a ph>macy disp5ses a prescription drug cov]$ "u ! arrangem5t1 ! ,,pbm %all provide 7by mail or electronically7 to ! enrollee to :om su* drug 0 disp5s$ an explanation ( b5efits /atem5t t conta9s ! foll[+ in=mation3 7#a7 ,! date ! claim = su* drug 0 made by ! ph>macy4 7#b7 ,! "n ( su* drug & ! /r5g? & quantity disp5s$ to ! enrollee4 7#c7 ,! am\nt paid by ! enrollee = su* drug4 7#d7 ,! total am\nt paid to ! ph>macy by ! ,,pbm = su* drug4 ,su* am\nt %all include all am\nts paid to ! ph>macy ) respect to disp5s+ su* drug1 includ+ fees4 7#e7 ,! am\nt paid by ! c>ri] to ! ,,pbm = su* drug4 7g7 ,nondiscrim9atory contract 7#a7 ,9 g5]al ,"u a ,,pbm c>ri] arrangem5t1 a ,,pbm may n require t a ph>macy p>ticipate 9 a ph>macy network manag$ by su* ,,pbm z a condition ( ! ph>macy p>ticipat+ 9 ano!r network manag$ by su* ,,pbm4 7#b7 ,ph>macy network def9$ ,= purposes ( ?is subsection1 ! t]m ph>macy network means a gr\p ( ph>macies t h agre$1 ?r\gh a contract ) a ,,pbm or c>ri]1 to provide prescription m$ications to enrollees at rates & ) disc\nts t are specifi$ 9 su* contract4 7h7 ,access to ,,pbm contract in=mation 7#a7 ,9 g5]al ,"u a ,,pbm c>ri] arrangem5t1 at ! reque/ ( ! ,(fice ( ,p]sonnel ,managem5t1 a ,,pbm %all provide to ! ,(fice & to ! ,inspector ,g5]al ( ! ,(fice ( ,p]sonnel ,managem5t full access to in=mation relat+ to contracts ent]$ into by su* ,,pbm "u su* arrangem5t 7su* z ,,pbm manufactur] contracts & ,,pbm contracts ) ph>macies74 ,su* in=mation %all include-- 7,a7 companywide rebate receipt ag+ reports t cov] all ( ! ,,pbm's l9es ( bus9ess2 7,b7 in=mation & me?odology us$ to calculate & allocate rebates betwe5 ! ,,pbm's l9es ( bus9ess2 7,c7 in=mation on av]age :olesale prices1 :olesale acquisition co/s1 & maximum all[able co/s2 7,d7 in=mation on disp5s+ fees paid2 & 7,e7 in=mation & me?odologies us$ to calculate additional adm9i/rative & s]vice fees *>g$ to ! c>ri]4 7#b7 ,confid5tiality ,in=mation provid$ by a ,,pbm "u ?is subsection is confid5tial & %all n be disclos$ by ! ,(fice1 except t no?+ 9 ?is p>agraph %all prev5t-- 7,a7 a disclosure requir$ "u ! ,inspector ,g5]al ,act ( #aigh2 or 7,b7 any disclosure :i* ! ,(fice1 9 its sole discretion1 consid]s necess>y 9 ord] to c>ry out ?is section1 if su* disclosure is made 9 a =m :i* does n disclose ! id5tity ( a specific ,,pbm or c>ri] or ! price *>g$ = a p>ticul> prescription drug4 7#c7 ,exemption f ,,foia ,any in=mation obta9$ "u ?is subsection %all be exempt f disclosure "u section #eeb4 7#d7 ,def9itions ,= purposes ( ?is subsection-- 7,a7 ,g5]ic drug ,! t]m g5]ic drug means a drug approv$ pursuant to an abbreviat$ application submitt$ "u section #eje7;j7 ( ! ,f$]al ,food1 ,drug1 & ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;j774 7,b7 ,maximum all[able co/ ,! t]m maximum all[able co/ means a co/ t is set by a ,,pbm z ! upp] paym5t limit on ! +r$i5t co/s = a g5]ic drug4 7,c7 ,:olesale acquisition co/ ,! t]m :olesale acquisition co/ means a publicly available li/ price = sales ( a drug by a manufactur] to a :olesal]4 7i7 ,treatm5t ( non-,compliance 7#a7 ,9 g5]al ,"u a ,,pbm c>ri] arrangem5t1 a ,,pbm t kn[+ly provides false in=mation to a c>ri] relat$ to a claim made to su* c>ri] by ! ,,pbm "u su* arrangem5t %all be treat$1 = purposes ( *apt] #cg ( title #ca1 9 ! same mann] z a p]son t makes a false claim to ! ,unit$ ,/ates ,gov]nm5t "u section #cgbi ( su* *apt]4 7#b7 ,use ( collections ,any monet>y p5alty collect$ "u p>agraph 7#a7 %all be deposit$ into ! ,employees ,heal? ,b5efits ,fund "u section #hiji4 7#c7 ,additional p5alties ,any p5alties result+ f ! application ( p>agraph 7#a7 %all be 9 addition to any o!r p5alties available to ! ,(fice ( ,p]sonnel ,managem5t "u law or regulation4 7j7 ,no application to community-,rat$ c>ri]s ,! provisions ( ?is section & section #hijb7p7 ( ?is title-- 7#a7 %all apply to exp]i5ce-rat$ c>ri]s2 & 7#b7 %all n apply to c>ri]s t use rates bas$ on a p] memb] p] mon? capitation am\nt4 7k7 ,limitation ( application to prescription drugs ,! provisions ( ?is section & section #hijb7p7 ( ?is title %all n be con/ru$ to apply to drugs t are n prescription drugs4 7l7 ,g5]al def9itions ,= purposes ( ?is section & section #hijb7p7 ( ?is title3 7#a7 ,disp5s+ fee ,! t]m disp5s+ fee means a fee paid to a ph>macy = ! s]vice ( fill+ or disp5s+ prescriptions & excludes any paym5t = ! co/ ( ! drug disp5s$4 7#b7 ,drug sub/itution ,! t]m drug sub/itution means any *ange f "o prescription drug to ano!r prescription drug t is int5d$ to address or treat ! same illness or condition4 7#c7 ,,pbm c>ri] arrangem5t ,! t]m ,,pbm c>ri] arrangem5t means a contract betwe5 a ,,pbm & a c>ri] = ! provision or adm9i/ration ( a program ( prescription drug cov]age "u a heal? b5efits plan "u ?is *apt]4 ,su* a contract may provide1 among o!r duties1 = ! ,,pbm to-- 7,a7 process & pay prescription drug claims2 7,b7 provide programs & s]vices design$ to-- 7i7 maximize ! effectiv5ess ( prescription drugs disp5s$ "u su* plan2 or 7ii7 conta9 prescription drug exp5ditures "u su* plan2 & 7,c7 engage 9 o!r activities relat$ to ! adm9i/ration ( su* prescription drug cov]age4 7#d7 ,,pbm manufactur] contract ,! t]m ,,pbm manufactur] contract means a contract betwe5 a ,,pbm & a prescription drug manufactur] = ! provision ( prescription drugs to enrollees ( heal? b5efits plans ) prescription drug cov]age t is adm9i/]$ or provid$ by ! ,,pbm4 7#e7 ,ph>macy b5efit manag]2 ,,pbm ,! t]ms ph>macy b5efit manag] & ,,pbm mean an entity t contracts ) a c>ri] to provide or adm9i/] prescription drug cov]age "u a heal? b5efits plan "u ?is *apt]4 4 7c7 ,cl]ical am5dm5t ,! table ( sections = *apt] #hi ( title #e1 ,unit$ ,/ates ,code1 is am5d$ by add+ at ! end ! foll[+3 #hiae4 ,requirem5ts = ,,pbm arrangem5ts4 4 7d7 ,effective ,date2 waiv]2 regulations 7#a7 ,effective date ,! am5dm5ts made by ?is section %all apply to contract ye>s beg9n+ on or aft] ,janu>y #a1 #bjad4 7#b7 ,waiv] ,! ,(fice ( ,p]sonnel ,managem5t may waive ! application ( #a or m ( ! requirem5ts ( section #hiae ( title #e1 ,unit$ ,/ates ,code1 b only = contract ye> #bjad4 7#c7 ,exp$it+ implem5tation ( regulations ,n lat] ?an #f mon?s aft] ! date ( ! enactm5t ( ?is ,act1 ! ,(fice ( ,p]sonnel ,managem5t %all issue int]im f9al regulations to c>ry out ?is section :i* may be effective & f9al imm$iately on an int]im basis z ( ! date ( publication ( su* regulations4 ,if ! ,(fice provides = an int]im f9al regulation1 ! ,(fice %all provide = a p]iod ( public comm5t on su* regulation aft] ! date ( publication4 ,! ,(fice may *ange or revise su* regulation aft] completion ( ! p]iod ( public comm5t4