,i #aaith ,,congress #b;d ,session ,h4 ,r4 #hggi ,,in ,,the ,,house ,,of ,,representatives ,may #ac1 #bjbf,mrs4 ,harshbarger 7for herself1 ,mr4 ,auchincloss1 ,mr4 ,carter of ,georgia1 ,mr4 ,landsman1 ,mr4 ,nehls1 and ,mr4 ,nadler7 introduced the following bill2 which was referred to the ,committee on the ,judiciary ,a ,,bill ,to prohibit pharmacy benefit managers and pharmacies from being under common ownership1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,patients ,before ,monopolies ,act or the ,,pbm ,act4 #b4 ,findings ,the ,congress finds the following3 7#a7 ,pharmacy benefit managers are corporate entities that play a dominant role in pharmaceutical supply chains1 determining which drugs health plans will cover for enrollees1 what prices patients and health plans will pay for those drugs1 and how much health plans will reimburse pharmacies for dispensing them4 7#b7 ,the market for pharmacy benefit manager services has become highly concentrated4 ,as of #bjbe1 the #f largest pharmacy benefit managers are each integrated into large health care conglomerates that include downstream businesses such as retail1 mail order1 and specialty pharmacies4 ,these conglomerates also processed more than #ij percent of the prescriptions in the ,united ,states in #bjbc4 7#c7 ,the #c largest pharmacy benefit managers are also vertically integrated into health care platforms that include both upstream business lines1 like health insurance1 and downstream suppliers1 like pharmacies and providers4 7#d7 ,the ,federal ,trade ,commission has found that vertically integrated pharmacy benefit managers have both the ability and incentive to steer business to their own affiliated pharmacies1 which reduces competition and increases prescription drug costs for patients4 7#e7 ,pharmacy benefit managers increasingly leverage their market power to pressure smaller1 unaffiliated1 independent pharmacies to enter into unfavorable contracts with the largest pharmacy benefit managers4 ,this dynamic has likely contributed to the closure of more than #g1jjj pharmacies between #bjai and #bjbd4 7#f7 ,self-preferencing of affiliated pharmacies may also allow large1 vertically integrated health conglomerates to evade statutory limits on profits known as the ,medical ,loss ,ratio4 ,gaming of the profit constraint using transfer pricing techniques may allow affiliated health insurance businesses to hide profits in the unregulated pharmacy business segment1 costing enrollees and taxpayers money4 7#g7 ,pursuant to its powers under article ,i1 section #h1 of the ,united ,states ,constitution1 ,congress has the ability to create any law necessary and appropriate to regulate interstate commerce4 ,as pharmacy benefit managers are part of large1 national health conglomerates that operate across state lines1 and engage in intrastate activities that also substantially relate to interstate commerce1 ,congress intends to regulate pharmacy benefit managers in the public interest4 7#h7 ,in order to eliminate the conflicts of interest described in paragraphs 7#a7 through 7#g7 and restore competition to the marketplace1 the ,federal ,government should-- 7,a7 protect patients1 independent pharmacies1 and taxpayers by structurally separating vertically integrated health conglomerates2 7,b7 require parent companies that own a pharmacy benefit manager or insurer to divest their pharmacy businesses2 7,c7 enable ,federal agencies1 state attorneys general1 and private citizens to bring civil actions to enforce the structural separation of these companies2 and 7,d7 grant the ,federal ,trade ,commission and ,department of ,justice additional authority to review and block future transactions that would re-create these conflicts of interest4 #c4 ,prohibitions relating to anticompetitive pharmacy ownership and contracts 7a7 ,prohibition on pharmacy ownership by entities providing insurance or pharmacy benefit management services 7#a7 ,in general ,it shall be unlawful for any person to both-- 7,a7 directly or indirectly own1 operate1 control1 or direct the operation of the whole or any part of a pharmacy2 and 7,b7 directly or indirectly own1 operate1 or control the whole or any part of-- 7i7 an insurance company2 or 7ii7 a pharmacy benefit manager4 7#b7 ,divestment ,not later than #a year after the date of enactment of this ,act1 any person in violation of paragraph 7#a7 shall divest the pharmacy of such person4 7b7 ,antitrust enforcement 7#a7 ,in general ,both the ,federal ,trade ,commission and the ,assistant ,attorney ,general in charge of the ,antitrust ,division shall have jurisdiction1 jointly or separately1 to enforce this section4 7#b7 ,penalties for failure to divest 7,a7 ,guidance ,not later than #cj days after the date of enactment of this ,act1 the ,chair of the ,federal ,trade ,commission and the ,assistant ,attorney ,general in charge of the ,antitrust ,division shall issue guidance specifying milestones for divestment within the deadline under subsection 7a77#b74 7,b7 ,penalties 7i7 ,in general ,for any person that does not comply with the milestones specified under subparagraph 7,a71 the ,chair of the ,federal ,trade ,commission or the ,assistant ,attorney ,general in charge of the ,antitrust ,division shall cause #aj percent of the profits of the person to be transferred into escrow on a monthly basis1 to be-- 7,i7 returned to the person if divestment occurs by the deadline under subsection 7a77#b72 or 7,,ii7 deposited into the fund described in subsection 7c77#g7 if divestment does not occur by the deadline under subsection 7a77#b74 7,c7 ,trustee ,if divestiture does not occur by the deadline under subsection 7a77#b71 a divestiture trustee shall oversee the divestiture required under that paragraph4 ,the divestiture trustee shall have the authority to sell the pharmacy4 7c7 ,civil actions 7#a7 ,in general ,when the ,inspector ,general of the ,department of ,health and ,human ,services1 the ,assistant ,attorney ,general in charge of the ,antitrust ,division of the ,department of ,justice1 the ,federal ,trade ,commission1 or an attorney general of a ,state has reason to believe that a person is in violation of subsection 7a71 such ,inspector ,general1 ,assistant ,attorney ,general1 ,federal ,trade ,commission or attorney general of a ,state may bring a civil action in an appropriate district court of the ,united ,states4 7#b7 ,private right of action 7,a7 ,in general ,an individual alleging damages as a result of a violation of this ,act may bring a civil action in any court of competent jurisdiction1 ,state or ,federal4 7,b7 ,relief ,in a civil action brought under subparagraph 7,a7 in which the plaintiff prevails1 the court may award-- 7i7 treble damages2 7ii7 reasonable attorney's fees and litigation costs2 and 7iii7 any other relief1 including equitable or declaratory relief1 that the court determines appropriate4 7#c7 ,actions by ,state attorneys general ,if the attorney general of a ,state has reason to believe that an interest of the residents of the ,state has been or is being threatened or adversely affected by a practice that violates subsection 7a71 the attorney general of the ,state may1 as parens patriae1 bring a civil action on behalf of the residents of the ,state in an appropriate district court of the ,united ,states to obtain appropriate relief1 including monetary damages4 7#d7 ,injunctive and equitable relief ,in any action described in paragraph 7#a71 7#b71 or 7#c71 the applicable court1 on a finding that a person is in violation of subsection 7a71 shall issue an order requiring such person-- 7,a7 to cease and desist from such violation1 and1 if applicable1 divest the pharmacy services of such person2 and 7,b7 to disgorge any revenue received from the pharmacy from the sale of prescription drugs during the period of such violation4 7#e7 ,other relief ,in addition to any relief obtained under paragraph 7#a71 7#b71 or 7#c71 the court may grant any other equitable relief necessary to redress and prevent recurrence of the violation4 7#f7 ,right to jury trial ,either party1 upon request1 shall have the right to a jury trial4 7#g7 ,deposit ,any revenue received from the sale of prescription drugs disgorged pursuant to an action under paragraph 7#a7 shall be deposited in a fund created by the ,federal ,trade ,commission and distributed by the ,federal ,trade ,commission to be put to use in the interest of serving the health care needs of the harmed community1 including consumers overcharged at vertically integrated pharmacies4 7d7 ,,ftc and ,,doj review 7#a7 ,reporting required ,any divestment of a pharmacy or pharmacy benefit manager required under subsection 7a7 shall be reported to the ,federal ,trade ,commission and the ,assistant ,attorney ,general in charge of the ,antitrust ,division of the ,department of ,justice under section #g;,a of the ,clayton ,act 7#ae ,u4,s4,c4 #ah;a7 without respect to the thresholds under subsection 7a77#b7 of that section4 7#b7 ,tolling of divestment period during review ,the divestment period under subsection 7a7 shall be tolled during the pendency of any waiting period required under section #g;,a of the ,clayton ,act 7#ae ,u4,s4,c4 #ah;a74 7#c7 ,review of effect of divestiture ,with respect to each divestiture undertaken pursuant to subsection 7a71 in addition to any applicable review under section #g;,a of the ,clayton ,act 7#ae ,u4,s4,c4 #ah;a71 the ,federal ,trade ,commission and the ,assistant ,attorney ,general in charge of the ,antitrust ,division of the ,department of ,justice shall review the effect on competition1 financial viability1 and the public interest-- 7,a7 of the divestiture2 and 7,b7 of the subsequent acquisition of the divested pharmacy by the acquiring person4 7#d7 ,blocking of actions ,the ,federal ,trade ,commission and the ,assistant ,attorney ,general in charge of the ,antitrust ,division of the ,department of ,justice1 jointly or separately1 may bring a civil action in any court of competent jurisdiction to block any action that would harm competition to the detriment of the public interest with respect to the conflicts of interest described in subsection 7a74 7e7 ,rulemaking authority ,the ,federal ,trade ,commission shall promulgate rules to carry out this section4 ,such rules shall not diminish any obligation under this section4 7f7 ,reports required ,the ,chair of the ,federal ,trade ,commission and the ,assistant ,attorney ,general in charge of the ,antitrust ,division of the ,department of ,justice shall submit to the appropriate congressional committees quarterly reports on compliance with this ,act1 including the status of any divestitures required under this ,act4 7g7 ,rule of construction ,nothing in this section shall be construed to limit the authority of the ,federal ,trade ,commission1 the ,inspector ,general of the ,department of ,justice1 the ,department of ,health and ,human ,services1 or the attorney general of a ,state under any other provision of law4 7h7 ,severability ,if any provision of this ,act or the application thereof to any person or circumstance is held invalid1 the remainder of this ,act1 or the application of that provision to persons or circumstances other than those as to which it is held invalid1 shall not be affected thereby4 7i7 ,definitions ,in this section3 7#a7 ,health plan ,the term health plan means any public or private health insurance plan4 7#b7 ,person ,the term person has the meaning given the term in section #h of the ,sherman ,act 7#ae ,u4,s4,c4 #g74 7#c7 ,pharmacy 7,a7 ,in general ,the term pharmacy means any person1 business1 or entity licensed1 registered1 or otherwise permitted by a ,state or a territory of the ,united ,states to dispense1 deliver1 or distribute a controlled substance1 prescription drug1 or other medication-- 7i7 to the general public2 or 7ii7 to a bed patient for immediate administration4 7,b7 ,inclusions ,the term pharmacy includes-- 7i7 a mail-order pharmacy2 7ii7 a specialty pharmacy2 7iii7 a retail pharmacy2 7iv7 a nursing home pharmacy2 7v7 a long-term care pharmacy2 7vi7 a hospital pharmacy2 7vii7 an infusion or other outpatient treatment pharmacy2 7viii7 any organization the ,national ,provider ,identifier 7,,npi7 registration of which has #a or more taxonomy codes under the pharmacy section of the ,national ,uniform ,claim ,committee 7or a subsequent organization72 and 7ix7 any other type of pharmacy4 7#d7 ,pharmacy benefit manager ,the term pharmacy benefit manager means any person1 business1 or other entity1 such as a third-party administrator1 regardless of whether such person1 business1 or entity identifies itself as a pharmacy benefit manager1 that1 either directly or indirectly through an intermediary 7including an affiliate1 subsidiary1 or agent7 or an arrangement with a third party-- 7,a7 acts as a negotiator of prices1 rebates1 fees1 or discounts for prescription drugs on behalf of a health plan or health plan sponsor2 7,b7 contracts with pharmacies to create pharmacy networks and designs and manages such networks2 or 7,c7 manages or administers the prescription drug benefits provided by a health plan1 including the processing and payment of claims for prescription drugs1 arranging alternative access to or funding for prescription drugs1 the performance of utilization management services1 including drug utilization review1 the processing of drug prior authorization requests1 the adjudication of appeals or grievances related to the prescription drug benefit1 contracting with network pharmacies1 controlling the cost of covered prescription drugs1 or the provision of related services4