,,ii  #aai? ,,congress  #a/ ,session    
,s4 #ccde  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,decemb] #d1 #bjbe,mr4 
,crapo 7= himself1 ,mr4 ,wyd51 ,mr4     
,grassley1 ,mr4 ,b5net1 ,mr4 ,cornyn1   
,mr4 ,w>n]1 ,mr4 ,?une1 ,mr4 ,:iteh\se1 
,mr4 ,cassidy1 ,ms4 ,hassan1 ,mr4       
,lank=d1 ,ms4 ,cortez ,ma/o1 ,mr4       
,da9es1 ,ms4 ,smi?1 ,mr4 ,b>rasso1 ,mr4 
,lujn1 ,mr4 ,tillis1 ,mr4 ,w>nock1 ,mrs4
 ,blackburn1 ,mr4 ,wel*1 & ,mr4 ,m>%all7
 introduc$ ! foll[+ bill2 :i* 0 read    
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to am5d titles     
,,xviii & ,,xix ( ! ,social ,security   
,act to ensure accurate paym5ts to      
ph>macies "u ,m$icaid & prev5t ! use (  
abusive spread pric+ 9 ,m$icaid1 & to   
assure ph>macy access & *oice = ,m$ic>e 
b5efici>ies & mod]nize & ensure ,,pbm   
acc\ntability "u ,m$ic>e4  #a4 ,%ort    
title ,?is ,act may be cit$ z ! ,,pbm   
,price ,transp>5cy & ,acc\ntability     
,act4  #b4 ,ensur+ accurate paym5ts to  
ph>macies "u ,m$icaid & prev5t+ ! use ( 

abusive spread pric+ 9 ,m$icaid  7a7    
,ensur+ accurate paym5ts to ph>macies "u
 ,m$icaid  7#a7 ,9 g5]al ,section       
#aibg7;f7 ( ! ,social ,security ,act    
7#db ,u4,s4,c4 #acifr-#h7;f77 is am5d$--
 7,a7 9 p>agraph 7#a77;,a7-- 7i7 by     
r$esignat+ clause 7ii7 z clause 7iii72 &
  7ii7 by /rik+ & aft] ! semicolon at ! 
end ( clause 7i7 & all t prec$es x ?r\gh
 7#a7 & ins]t+ ! foll[+3  7#a7 ,det]m9+ 
ph>macy actual acquisition co/s ,!      
,secret>y %all conduct a survey ( retail
 community ph>macy drug prices &        
applicable non-retail ph>macy drug      
prices to det]m9e national av]age drug  
acquisition co/ b5*m>ks 7z su* t]m is   
def9$ by ! ,secret>y7 z foll[s3 7,a7    
,use ( v5dor ,! ,secret>y may contract  
s]vices =-- 7i7 ) respect to retail     
community ph>macies1 ! det]m9ation (    
retail survey prices ( ! national av]age
 drug acquisition co/ = cov]$ outpati5t 
drugs t repres5t a nationwide av]age (  
consum] pur*ase prices = su* drugs1 net 
( all disc\nts1 rebates1 & o!r price    

concessions 7to ! ext5t any in=mation ) 
respect to su* disc\nts1 rebates1 & o!r 
price concessions is available7 bas$ on 
a mon?ly survey ( su* ph>macies2  7ii7 )
 respect to applicable non-retail       
ph>macies-- 7,i7 ! det]m9ation ( survey 
prices1 sep>ate f ! survey prices       
describ$ 9 clause 7i71 ( ! non-retail   
national av]age drug acquisition co/ =  
cov]$ outpati5t drugs t repres5t a      
nationwide av]age ( consum] pur*ase     
prices = su* drugs1 net ( all disc\nts1 
rebates1 & o!r price concessions 7to !  
ext5t any in=mation ) respect to su*    
disc\nts1 rebates1 & o!r price          
concessions is available7 bas$ on a     
mon?ly survey ( su* ph>macies2 &  7,,ii7
 at ! discretion ( ! ,secret>y1 = ea*   
type ( applicable non-retail ph>macy1 ! 
det]m9ation ( survey prices1 sep>ate f !
 survey prices describ$ 9 clause 7i7 or 
subclause 7,i7 ( ?is clause1 ( !        
national av]age drug acquisition co/ =  
su* type ( ph>macy = cov]$ outpati5t    
drugs t repres5t a nationwide av]age (  

consum] pur*ase prices = su* drugs1 net 
( all disc\nts1 rebates1 & o!r price    
concessions 7to ! ext5t any in=mation ) 
respect to su* disc\nts1 rebates1 & o!r 
price concessions is available7 bas$ on 
a mon?ly survey ( su* ph>macies2 &  2   
7,b7 9 subp>agraph 7,b7 ( p>agraph 7#a71
 by /rik+ subp>agraph 7,a77ii7 & ins]t+ 
subp>agraph 7,a77iii72  7,c7 9          
subp>agraph 7,d7 ( p>agraph 7#a71 by    
/rik+ clauses 7ii7 & 7iii7 & ins]t+ !   
foll[+3  7ii7 ,! v5dor mu/ update !     
,secret>y no less (t5 ?an mon?ly on !   
survey prices = cov]$ outpati5t drugs4  
7iii7 ,! v5dor mu/ diff]5tiate1 9       
collect+ & report+ survey data1 = all   
co/ in=mation collect$1 :e!r a ph>macy  
is a retail community ph>macy or an     
applicable non-retail ph>macy1 includ+  
:e!r su* ph>macy is an affiliate 7z     
def9$ 9 subsection 7k77#ac771 &1 9 !    
case ( an applicable non-retail ph>macy1
 :i* type ( applicable non-retail       
ph>macy x is us+ ! relevant ph>macy type
 indicators includ$ 9 ! guidance requir$

 by subsection 7a77#d77;,a7 ( section #b
 ( ! ,,pbm ,price ,transp>5cy &         
,acc\ntability ,act4  2  7,d7 by add+ at
 ! end ( p>agraph 7#a7 ! foll[+3  7,f7  
,survey report+ ,9 ord] to meet !       
requirem5t ( section #aijb7;a77#ed71 a  
,/ate %all require t any retail         
community ph>macy or applicable         
non-retail ph>macy 9 ! ,/ate t receives 
any paym5t1 reimbursem5t1 adm9i/rative  
fee1 disc\nt1 rebate1 or o!r price      
concession relat$ to ! disp5s+ ( cov]$  
outpati5t drugs to individuals receiv+  
b5efits "u ?is title1 reg>dless ( :e!r  
su* paym5t1 reimbursem5t1 adm9i/rative  
fee1 disc\nt1 rebate1 or o!r price      
concession is receiv$ f ! ,/ate or a    
manag$ c>e entity or o!r specifi$ entity
 7z su* t]ms are def9$ 9 section        
#aijc7m77#i77;,d77 directly or f a      
ph>macy b5efit manag] or ano!r entity t 
has a contract ) ! ,/ate or a manag$ c>e
 entity or o!r specifi$ entity 7z s     
def9$71 %all respond to surveys conduct$
 "u ?is p>agraph4  7,g7 ,survey         

in=mation ,in=mation on national drug   
acquisition prices obta9$ "u ?is        
p>agraph %all be made publicly available
 9 a =m & mann] to be det]m9$ by !      
,secret>y & %all include at lea/ !      
foll[+3 7i7 ,! mon?ly response rate to !
 survey includ+ a li/ ( ph>macies n 9   
compliance ) subp>agraph 7,f74  7ii7 ,! 
sampl+ me?odology & numb] ( ph>macies   
sampl$ mon?ly4  7iii7 ,in=mation on     
price concessions to ph>macies1 includ+ 
disc\nts1 rebates1 & o!r price          
concessions1 to ! ext5t t su* in=mation 
may be publicly releas$ & has be5       
collect$ by ! ,secret>y z "p ( ! survey4
  7,h7 ,p5alties  7i7 ,9 g5]al ,subject 
to clauses 7ii71 7iii71 & 7iv71 !       
,secret>y %all en=ce ! provisions ( ?is 
p>agraph ) respect to a ph>macy ?r\gh ! 
e/abli%m5t ( civil money p5alties       
applicable to a retail community ph>macy
 or an applicable non-retail ph>macy4   
7ii7 ,basis = p5alties ,! ,secret>y %all
 impose a civil money p5alty e/abli%$ "u
 ?is subp>agraph on a retail community  

ph>macy or applicable non-retail ph>macy
 if-- 7,i7 ! retail ph>macy or          
applicable non-retail ph>macy refuses or
 o!rwise fails to respond to a reque/ = 
in=mation ab\t prices 9 connection ) a  
survey "u ?is subsection2  7,,ii7 kn[+ly
 provides false in=mation 9 response to 
su* a survey2 or  7,,iii7 o!rwise fails 
to comply ) ! requirem5ts e/abli%$ "u   
?is p>agraph4  7iii7 ,p>amet]s =        
p5alties  7,i7 ,9 g5]al ,a civil money  
p5alty e/abli%$ "u ?is subp>agraph may  
be assess$ ) respect to ea* violation1 &
 ) respect to ea* non-compliant retail  
community ph>macy 7includ+ a ph>macy t  
is "p ( a *a97 or non-compliant         
applicable non-retail ph>macy 7includ+ a
 ph>macy t is "p ( a *a971 9 an am\nt n 
to exce$ #ajj1jjj = ea* su* violation4  
7,,ii7 ,consid]ations ,9 det]m9+ ! am\nt
 ( a civil money p5alty impos$ "u ?is   
subp>agraph1 ! ,secret>y may consid] !  
size1 bus9ess /ructure1 & type ( ph>macy
 involv$1 z well z ! type ( violation & 
o!r relevant factors1 z det]m9$         

appropriate by ! ,secret>y4  7iv7 ,rule 
( application ,! provisions ( section   
#aabh;,a 7o!r ?an subsections 7a7 & 7b77
 %all apply to a civil money p5alty "u  
?is subp>agraph 9 ! same mann] z su*    
provisions apply to a civil money p5alty
 or proce$+ "u section #aabh;,a7a74     
7,i7 ,limitation on use ( applicable    
non-retail ph>macy pric+ in=mation ,no  
,/ate %all use pric+ in=mation report$  
by applicable non-retail ph>macies "u   
subp>agraph 7,a77ii7 to develop or in=m 
paym5t me?odologies = retail community  
ph>macies4  2  7,e7 9 p>agraph 7#b7--   
7i7 9 subp>agraph 7,a71 by ins]t+ 1     
includ+ paym5t rates & me?odologies =   
det]m9+ +r$i5t co/ reimbursem5t "u      
manag$ c>e entities or o!r specifi$     
entities 7z su* t]ms are def9$ 9 section
 #aijc7m77#i77;,d771 aft] "u ?is title2 
&  7ii7 9 subp>agraph 7,b71 by ins]t+ & 
! basis = su* disp5s+ fees be=e !       
semicolon2  7,f7 by r$esignat+ p>agraph 
7#d7 z p>agraph 7#e72  7,g7 by ins]t+   
aft] p>agraph 7#c7 ! foll[+ new         

p>agraph3  7#d7 ,ov]sight  7,a7 ,9 g5]al
 ,! ,inspector ,g5]al ( ! ,dep>tm5t (   
,heal? & ,human ,s]vices %all conduct   
p]iodic /udies ( ! survey data report$  
"u ?is subsection1 z appropriate1       
includ+ ) respect to sub/antial         
v>iations 9 acquisition co/s or o!r     
applicable co/s1 z well z ) respect to  
h[ int]nal transf] prices & relat$ p>ty 
transactions may influ5ce ! co/s report$
 by ph>macies t are affiliates 7z def9$ 
9 subsection 7k77#ac77 or are own$ by1  
controll$ by1 or relat$ "u a common     
own]%ip /ructure ) a :olesal]1          
di/ributor1 or o!r entity t acquires    
cov]$ outpati5t drugs relative to co/s  
report$ by ph>macies n affiliat$ ) su*  
entities4 ,! ,inspector ,g5]al %all     
provide p]iodic updates to ,congress on 
! results ( su* /udies1 z appropriate1 9
 a mann] t does n disclose trade secrets
 or o!r propriet>y in=mation4  7,b7     
,appropriation ,!re is appropriat$ to ! 
,inspector ,g5]al ( ! ,dep>tm5t ( ,heal?
 & ,human ,s]vices1 out ( any money 9 ! 

,treasury n o!rwise appropriat$1        
#e1jjj1jjj = fiscal ye> #bjbf1 to rema9 
available until exp5d$1 to c>ry out ?is 
p>agraph4  2 &  7,h7 9 p>agraph 7#e71 z 
s r$esignat$-- 7i7 by ins]t+ 1 &        
#i1jjj1jjj = fiscal ye> #bjbf & ea*     
fiscal ye> !reaft]1 aft] #bjaj2 &  7ii7 
by ins]t+ ,funds appropriat$ "u ?is     
p>agraph = fiscal ye> #bjbf & any       
subsequ5t fiscal ye> %all rema9         
available until exp5d$4 aft] ! p]iod4   
7#b7 ,def9itions ,section #aibg7k7 ( !  
,social ,security ,act 7#db ,u4,s4,c4   
#acifr-#h7k77 is am5d$-- 7,a7 9 ! matt] 
prec$+ p>agraph 7#a71 by /rik+ ,9 !     
section & ins]t+ ,9 ?is section2 &  7,b7
 by add+ at ! end ! foll[+ new          
p>agraphs3  7#ab7 ,applicable non-retail
 ph>macy ,! t]m applicable non-retail   
ph>macy means a ph>macy t is lic5s$ z a 
ph>macy by ! ,/ate & t is n a retail    
community ph>macy1 includ+ a ph>macy t  
disp5ses prescription m$ications to     
pati5ts prim>ily ?r\gh mail & specialty 
ph>macies4 ,su* t]m does n include nurs+

 home ph>macies1 long-t]m c>e facility  
ph>macies1 hospital ph>macies1 cl9ics1  
*>itable or n-=-pr(it ph>macies1        
gov]nm5t ph>macies1 or l[ disp5s+       
ph>macies 7z def9$ by ! ,secret>y74     
7#ac7 ,affiliate ,! t]m affiliate means 
any entity t is own$ by1 controll$ by1  
or relat$ "u a common own]%ip /ructure )
 a ph>macy b5efit manag] or a manag$ c>e
 entity or o!r specifi$ entity 7z su*   
t]ms are def9$ 9 section                
#aijc7m77#i77;,d774  4  7#c7 ,effective 
date  7,a7 ,9 g5]al ,subject to         
subp>agraph 7,b71 ! am5dm5ts made by ?is
 subsection %all take effect on ! fir/  
day ( ! fir/ qu>t] t beg9s on or aft] ! 
date t is #f mon?s aft] ! date (        
enactm5t ( ?is ,act4  7,b7 ,delay$      
application to applicable non-retail    
ph>macies ,! ph>macy survey requirem5ts 
e/abli%$ by ! am5dm5ts to section       
#aibg7;f7 ( ! ,social ,security ,act    
7#db ,u4,s4,c4 #acifr-#h7;f77 made by   
?is subsection %all apply to retail     
community ph>macies beg9n+ on !         

effective date describ$ 9 subp>agraph   
7,a71 b %all n apply to applicable      
non-retail ph>macies until ! fir/ day ( 
! fir/ qu>t] t beg9s on or aft] ! date t
 is #ah mon?s aft] ! date ( enactm5t (  
?is ,act4  7#d7 ,id5tification (        
applicable non-retail ph>macies  7,a7 ,9
 g5]al ,n lat] ?an ,janu>y #a1 #bjbg1 ! 
,secret>y ( ,heal? & ,human ,s]vices    
%all1 9 consultation ) /akehold]s z     
appropriate1 publi% guidance specify+   
ph>macies t meet ! def9ition (          
applicable non-retail ph>macies 7z su*  
t]m is def9$ 9 subsection 7k77#ab7 (    
section #aibg ( ! ,social ,security ,act
 7#db ,u4,s4,c4 #acifr-#h71 z add$ by   
p>agraph 7#b771 & t w be subject to !   
survey requirem5ts "u subsection 7f77#a7
 ( su* section1 z am5d$ by p>agraph     
7#a74  7,b7 ,inclusion ( ph>macy type   
indicators ,! guidance publi%$ "u       
subp>agraph 7,a7 %all include ph>macy   
type indicators to di/+ui% betwe5       
diff]5t types ( applicable non-retail   
ph>macies1 su* z ph>macies t disp5se    

prescriptions prim>ily ?r\gh ! mail &   
ph>macies t disp5se prescriptions t     
require special h&l+ or di/ribution4 ,an
 applicable non-retail ph>macy may be   
id5tifi$ ?r\gh multiple ph>macy type    
indicators4  7#e7 ,implem5tation  7,a7  
,9 g5]al ,not)/&+ any o!r provision (   
law1 ! ,secret>y ( ,heal? & ,human      
,s]vices may implem5t ! am5dm5ts made by
 ?is subsection by program in/ruction or
 o!rwise4  7,b7 ,nonapplication (       
,adm9i/rative ,proc$ure ,act            
,implem5tation ( ! am5dm5ts made by ?is 
subsection %all be exempt f !           
requirem5ts ( section #eec ( title #e1  
,unit$ ,/ates ,code4  7#f7              
,nonapplication ( pap]work r$uction act 
,*apt] #ce ( title #dd1 ,unit$ ,/ates   
,code1 %all n apply to any data         
collection und]tak5 by ! ,secret>y (    
,heal? & ,human ,s]vices "u section     
#aibg7;f7 ( ! ,social ,security ,act    
7#db ,u4,s4,c4 #acifr-#h7;f771 z am5d$  
by ?is subsection4  7b7 ,prev5t+ ! use (
 abusive spread pric+ 9 ,m$icaid  7#a7  

,9 g5]al ,section #aibg ( ! ,social     
,security ,act 7#db ,u4,s4,c4 #acifr-#h7
 is am5d$-- 7,a7 9 subsection 7e71 by   
add+ at ! end ! foll[+ new p>agraph3    
7#f7 ,transp>5t prescription drug       
pass-?r\gh pric+ requir$  7,a7 ,9 g5]al 
,a contract betwe5 ! ,/ate & a ph>macy  
b5efit manag] 7ref]r$ to 9 ?is p>agraph 
z a ,,pbm71 or a contract betwe5 ! ,/ate
 & a manag$ c>e entity or o!r specifi$  
entity 7z su* t]ms are def9$ 9 section  
#aijc7m77#i77;,d7 & collectively ref]r$ 
to 9 ?is p>agraph z ! entity7 t includes
 provisions mak+ ! entity responsible = 
cov]age ( cov]$ outpati5t drugs disp5s$ 
to individuals enroll$ ) ! entity1 %all 
require t paym5t = su* drugs & relat$   
adm9i/rative s]vices 7z applicable71    
includ+ paym5ts made by a ,,pbm on      
behalf ( ! ,/ate or entity1 is bas$ on a
 transp>5t prescription drug pass-?r\gh 
pric+ model "u :i*-- 7i7 any paym5t made
 by ! entity or ! ,,pbm 7z applicable7 =
 su* a drug-- 7,i7 is limit$ to-- 7aa7  
+r$i5t co/2 &  7bb7 a pr(essional       

disp5s+ fee t is n less ?an !           
pr(essional disp5s+ fee t ! ,/ate w\ld  
pay if ! ,/ate 7 mak+ ! paym5t directly 
9 accordance ) ! ,/ate plan2  7,,ii7 is 
pass$ ?r\gh 9 its entirety 7except z    
r$uc$ "u ,f$]al or ,/ate laws &         
regulations 9 response to in/ances (    
wa/e1 fraud1 or abuse7 by ! entity or   
,,pbm to ! ph>macy or provid] t disp5ses
 ! drug2 &  7,,iii7 is made 9 a mann] t 
is consi/5t ) sections #ddg4ejb1        
#ddg4eab1 #ddg4ead1 & #ddg4eah ( title  
#db1 ,code ( ,f$]al ,regulations 7or any
 successor regulation7 z if su*         
requirem5ts appli$ directly to ! entity 
or ! ,,pbm1 except t any paym5t by !    
entity or ! ,,pbm = ! +r$i5t co/ ( su*  
drug pur*as$ by a cov]$ entity 7z def9$ 
9 subsection 7a77#e77;,b77 may exce$ !  
actual acquisition co/ 7z def9$ 9       
#ddg4ejb ( title #db1 ,code ( ,f$]al    
,regulations1 or any successor          
regulation7 = su* drug if-- 7aa7 su*    
drug 0 subject to an agreem5t "u section
 #cdj;,b ( ! ,public ,heal? ,s]vice     

,act2  7bb7 su* paym5t = ! +r$i5t co/ ( 
su* drug does n exce$ ! maximum paym5t t
 w\ld h be5 made by ! entity or ! ,,pbm 
= ! +r$i5t co/ ( su* drug if su* drug _h
 n be5 pur*as$ by su* cov]$ entity2 &   
7cc7 su* cov]$ entity reports to !      
,secret>y 79 a =m & mann] specifi$ by ! 
,secret>y71 on an annual basis & )      
respect to paym5ts = ! +r$i5t co/s ( su*
 drugs s pur*as$ by su* cov]$ entity t  
are 9 excess ( ! actual acquisition co/s
 = su* drugs1 ! aggregate am\nt ( su*   
excess2  7ii7 paym5t to ! entity or !   
,,pbm 7z applicable7 = adm9i/rative     
s]vices p]=m$ by ! entity or ,,pbm is   
limit$ to an adm9i/rative fee t reflects
 ! fair m>ket value 7z def9$ by !       
,secret>y7 ( su* s]vices2  7iii7 !      
entity or ! ,,pbm 7z applicable7 makes  
available to ! ,/ate1 & ! ,secret>y ^u  
reque/ 9 a =m & mann] specifi$ by !     
,secret>y1 all co/s & paym5ts relat$ to 
cov]$ outpati5t drugs & accompany+      
adm9i/rative s]vices 7z describ$ 9      
clause 7ii77 incurr$1 receiv$1 or made  

by ! entity or ! ,,pbm1 brok5 d[n 7z    
specifi$ by ! ,secret>y71 to ! ext5t su*
 co/s & paym5ts are attributable to an  
individual cov]$ outpati5t drug1 by ea* 
su* drug1 includ+ any +r$i5t co/s1      
pr(essional disp5s+ fees1 adm9i/rative  
fees 7z describ$ 9 clause 7ii771        
po/-sale & po/-invoice fees1 disc\nts1  
or relat$ adju/m5ts su* z direct &      
indirect remun]ation fees1 & any & all  
o!r remun]ation1 z def9$ by ! ,secret>y2
 &  7iv7 any =m ( spread pric+ :]eby any
 am\nt *>g$ or claim$ by ! entity or !  
,,pbm 7z applicable7 t exce$s ! am\nt   
paid to ! ph>macies or provid]s on      
behalf ( ! ,/ate or entity1 includ+ any 
po/-sale or po/-invoice fees1 disc\nts1 
or relat$ adju/m5ts su* z direct &      
indirect remun]ation fees or assessm5ts1
 z def9$ by ! ,secret>y 7aft] all[+ = an
 adm9i/rative fee z describ$ 9 clause   
7ii77 is n all[able = purposes ( claim+ 
,f$]al mat*+ paym5ts "u ?is title4  7,b7
 ,publication ( in=mation ,! ,secret>y  
%all publi%1 n less frequ5tly ?an on an 

annual basis & 9 a mann] t does n       
disclose ! id5tity ( a p>ticul> cov]$   
entity or organization1 in=mation       
receiv$ by ! ,secret>y pursuant to      
subp>agraph 7,a77iii77,,iii7 t is brok5 
out by ,/ate & by ea* ( ! foll[+        
categories ( cov]$ entity )9 ea* su*    
,/ate3 7i7 ,cov]$ entities describ$ 9   
subp>agraph 7,a7 ( section              
#cdj;,b7a77#d7 ( ! ,public ,heal?       
,s]vice ,act4  7ii7 ,cov]$ entities     
describ$ 9 subp>agraphs 7,b7 ?r\gh 7,k7 
( su* section4  7iii7 ,cov]$ entities   
describ$ 9 subp>agraph 7,l7 ( su*       
section4  7iv7 ,cov]$ entities describ$ 
9 subp>agraph 7,m7 ( su* section4  7v7  
,cov]$ entities describ$ 9 subp>agraph  
7,n7 ( su* section4  7vi7 ,cov]$        
entities describ$ 9 subp>agraph 7,o7 (  
su* section4  2 &  7,b7 9 subsection    
7k71 z am5d$ by subsection 7a77#b71 by  
add+ at ! end ! foll[+ new p>agraph3    
7#ad7 ,ph>macy b5efit manag] ,! t]m     
ph>macy b5efit manag] means any p]son or
 entity t1 ei!r directly or ?r\gh an    

int]m$i>y1 acts z a price negotiator or 
gr\p pur*as] on behalf ( a ,/ate1 manag$
 c>e entity 7z def9$ 9 section          
#aijc7m77#i77;,d771 or o!r specifi$     
entity 7z s def9$71 or manages !        
prescription drug b5efits provid$ by a  
,/ate1 manag$ c>e entity1 or o!r        
specifi$ entity1 includ+ ! process+ &   
paym5t ( claims = prescription drugs1 ! 
p]=mance ( drug utilization review1 !   
process+ ( drug prior au?orization      
reque/s1 ! manag+ ( appeals or          
grievances relat$ to ! prescription drug
 b5efits1 contract+ ) ph>macies1        
controll+ ! co/ ( cov]$ outpati5t drugs1
 or ! provision ( s]vices relat$ !reto4 
,su* t]m includes any p]son or entity t 
acts z a price negotiator 7) reg>d to   
paym5t am\nts to ph>macies & provid]s = 
a cov]$ outpati5t drug or ! net co/ ( ! 
drug7 or gr\p pur*as] on behalf ( a     
,/ate1 manag$ c>e entity1 or o!r        
specifi$ entity or t c>ries out #a or m 
( ! o!r activities describ$ 9 ! prec$+  
s5t5ce1 irrespective ( :e!r su* p]son or

 entity calls itself a ph>macy b5efit   
manag]4  4  7#b7 ,con=m+ am5dm5ts       
,section #aijc7m7 ( su* ,act 7#db       
,u4,s4,c4 #acif;b7m77 is am5d$-- 7,a7 9 
p>agraph 7#b77;,a77xiii7-- 7i7 by /rik+ 
& 7,,iii7 & ins]t+ 7,,iii72  7ii7 by    
ins]t+ be=e ! p]iod at ! end ! foll[+3 1
 & 7,,iv7 if ! contract includes        
provisions mak+ ! entity responsible =  
cov]age ( cov]$ outpati5t drugs1 !      
entity %all comply ) ! requirem5ts (    
section #aibg7;e77#f72 &  7iii7 by mov+ 
! m>g9 #b ems to ! left2 &  7,b7 by add+
 at ! end ! foll[+ new p>agraph3  7#aj7 
,no paym5t %all be made "u ?is title to 
a ,/ate ) respect to exp5ditures incurr$
 by ! ,/ate = paym5t = s]vices provid$  
by an o!r specifi$ entity 7z def9$ 9    
p>agraph 7#i77;,d77iii77 unless su*     
s]vices are provid$ 9 accordance ) a    
contract betwe5 ! ,/ate & su* entity :i*
 satisfies ! requirem5ts ( p>agraph     
7#b77;,a77xiii74  4  7#c7 ,effective    
date ,! am5dm5ts made by ?is subsection 
%all apply to contracts betwe5 ,/ates & 

manag$ c>e entities1 o!r specifi$       
entities1 or ph>macy b5efit manag]s t h 
an effective date beg9n+ on or aft] !   
date t is #ah mon?s aft] ! date (       
enactm5t ( ?is ,act4  7#d7              
,implem5tation  7,a7 ,9 g5]al ,not)/&+  
any o!r provision ( law1 ! ,secret>y (  
,heal? & ,human ,s]vices may implem5t ! 
am5dm5ts made by ?is subsection by      
program in/ruction or o!rwise4  7,b7    
,nonapplication ( ,adm9i/rative         
,proc$ure ,act ,implem5tation ( !       
am5dm5ts made by ?is subsection %all be 
exempt f ! requirem5ts ( section #eec ( 
title #e1 ,unit$ ,/ates ,code4  7#e7    
,nonapplication ( ,pap]work ,r$uction   
,act ,*apt] #ce ( title #dd1 ,unit$     
,/ates ,code1 %all n apply to any data  
collection und]tak5 by ! ,secret>y (    
,heal? & ,human ,s]vices "u section     
#aibg7;e7 ( ! ,social ,security ,act    
7#db ,u4,s4,c4 #acifr-#h7;e771 z am5d$  
by ?is subsection4  #c4 ,assur+ ph>macy 
access & *oice = ,m$ic>e b5efici>ies &  
mod]niz+ & ensur+ ,,pbm acc\ntability "u

 ,m$ic>e  7a7 ,assur+ ph>macy access &  
*oice = m$ic>e b5efici>ies  7#a7 ,9     
g5]al ,section #ahfj;,d-#d7;b77#a7 ( !  
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#ajd7;b77#a77 is am5d$ by /rik+  
subp>agraph 7,a7 & ins]t+ ! foll[+3     
7,a7 ,9 g5]al  7i7 ,p>ticipation ( any  
will+ ph>macy ,a ,,pdp sponsor (f]+ a   
prescription drug plan %all p]mit any   
ph>macy t meets ! /&>d contract t]ms &  
conditions "u su* plan to p>ticipate z a
 network ph>macy ( su* plan4  7ii7      
,contract t]ms & conditions  7,i7 ,9    
g5]al ,not)/&+ any o!r provision ( law1 
= plan ye>s beg9n+ on or aft] ,janu>y   
#a1 #bjbh1 9 accordance ) clause 7i71   
contract t]ms & conditions (f]$ by su*  
,,pdp sponsor %all be reasonable &      
relevant accord+ to /&>ds e/abli%$ by ! 
,secret>y "u subclause 7,,ii74  7,,ii7  
,/&>ds ,n lat] ?an ! fir/ ,monday 9     
,april ( #bjbg1 ! ,secret>y %all e/abli%
 /&>ds = reasonable & relevant contract 
t]ms & conditions = purposes ( ?is      
clause4  7,,iii7 ,reque/ = in=mation ,n 

lat] ?an ,april #a1 #bjbf1 = purposes ( 
e/abli%+ ! /&>ds "u subclause 7,,ii71 ! 
,secret>y %all issue a reque/ =         
in=mation to seek input on tr5ds 9      
prescription drug plan & network ph>macy
 contract t]ms & conditions1 curr5t     
prescription drug plan & network ph>macy
 contract+ practices1 :e!r ph>macy      
reimbursem5t & disp5s+ fees paid by     
,,pdp sponsors to network ph>macies     
suffici5tly cov] ! +r$i5t & op]ational  
co/s ( su* ph>macies1 ! use &           
application ( ph>macy quality measures  
by ,,pdp sponsors = network ph>macies1  
,,pdp sponsor re/rictions or limitations
 on ! disp5s+ ( cov]$ "p ,d drugs by    
network ph>macies 7or any subsets ( su* 
ph>macies71 ,,pdp sponsor audit+        
practices = network ph>macies1 areas 9  
curr5t regulations or program guidance  
relat$ to contract+ betwe5 prescription 
drug plans & network ph>macies requir+  
cl>ification or additional specificity1 
factors = consid]ation 9 det]m9+ !      
reasonabl5ess & relevance ( contract    

t]ms & conditions betwe5 prescription   
drug plans & network ph>macies1 & o!r   
issues z det]m9$ appropriate by !       
,secret>y4  4  7#b7 ,ess5tial retail    
ph>macies ,section #ahfj;,d-#db ( !     
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#aeb7 is am5d$ by add+ at ! end !
 foll[+ new subsection3  7e7 ,ess5tial  
retail ph>macies  7#a7 ,9 g5]al ,)      
respect to plan ye>s beg9n+ on or aft]  
,janu>y #a1 #bjbh1 ! ,secret>y %all     
publi% reports1 at lea/ once e #b ye>s  
until #bjcd1 & p]iodically !reaft]1 t   
provide in=mation1 to ! ext5t feasible1 
on-- 7,a7 tr5ds 9 +r$i5t co/            
reimbursem5t1 disp5s+ fees1 inc5tive    
paym5ts & o!r fees paid by ,,pdp        
sponsors (f]+ prescription drug plans & 
,,ma organizations (f]+ ,,ma-,,pd plans 
"u ?is "p to ess5tial retail ph>macies  
7z def9$ 9 p>agraph 7#b77 ) respect to !
 disp5s+ ( cov]$ "p ,d drugs1 includ+ a 
comp>ison ( su* tr5ds betwe5 ess5tial   
retail ph>macies & ph>macies t are n    
ess5tial retail ph>macies2  7,b7 tr5ds 9

 am\nts paid to ,,pdp sponsors (f]+     
prescription drug plans & ,,ma          
organizations (f]+ ,,ma-,,pd plans "u   
?is "p by ess5tial retail ph>macies )   
respect to ! disp5s+ ( cov]$ "p ,d      
drugs1 includ+ a comp>ison ( su* tr5ds  
betwe5 ess5tial retail ph>macies &      
ph>macies t are n ess5tial retail       
ph>macies2  7,c7 tr5ds 9 ess5tial retail
 ph>macy p>ticipation 9 ph>macy networks
 & pref]r$ ph>macy networks =           
prescription drug plans (f]$ by ,,pdp   
sponsors & ,,ma-,,pd plans (f]$ by ,,ma 
organizations "u ?is "p1 includ+ a      
comp>ison ( su* tr5ds betwe5 ess5tial   
retail ph>macies & ph>macies t are n    
ess5tial retail ph>macies2  7,d7 tr5ds 9
 ! numb] ( ess5tial retail ph>macies1   
includ+ v>iation 9 su* tr5ds by         
geographic region or o!r factors2  7,e7 
a comp>ison ( co/-%>+ = cov]$ "p ,d     
drugs disp5s$ by ess5tial retail        
ph>macies t are network ph>macies =     
prescription drug plans (f]$ by ,,pdp   
sponsors & ,,ma-,,pd plans (f]$ by ,,ma 

organizations "u ?is "p & co/-%>+ =     
cov]$ "p ,d drugs disp5s$ by o!r network
 ph>macies = su* plans locat$ 9 simil>  
geographic areas t are n ess5tial retail
 ph>macies2  7,f7 a comp>ison ( ! volume
 ( cov]$ "p ,d drugs disp5s$ by ess5tial
 retail ph>macies t are network         
ph>macies = prescription drug plans (f]$
 by ,,pdp sponsors & ,,ma-,,pd plans    
(f]$ by ,,ma organizations "u ?is "p &  
su* volume ( disp5s+ by network         
ph>macies = su* plans locat$ 9 simil>   
geographic areas t are n ess5tial retail
 ph>macies1 includ+ in=mation on any    
patt]ns or tr5ds 9 su* comp>ison        
specific to c]ta9 types ( cov]$ "p ,d   
drugs1 su* z g5]ic drugs or drugs       
specifi$ z specialty drugs by a ,,pdp   
sponsor "u a prescription drug plan or  
an ,,ma organization "u an ,,ma-,,pd    
plan2 &  7,g7 a comp>ison ( ! in=mation 
describ$ 9 subp>agraphs 7,a7 ?r\gh 7,f7 
betwe5 ess5tial retail ph>macies t are  
network ph>macies = prescription drug   
plans (f]$ by ,,pdp sponsors "u ?is "p &

 ess5tial retail ph>macies t are network
 ph>macies = ,,ma-,,pd plans (f]$ by    
,,ma organizations "u ?is "p4  7#b7     
,def9ition ( ess5tial retail ph>macy ,9 
?is subsection1 ! t]m ess5tial retail   
ph>macy means1 ) respect to a plan ye>1 
a retail ph>macy t-- 7,a7 is n a ph>macy
 t is an affiliate z def9$ 9 p>agraph   
7#d72 &  7,b7 is locat$ 9-- 7i7 a rural 
area 9 :i* !re is no o!r retail ph>macy 
)9 #aj miles1 z det]m9$ by ! ,secret>y2 
7ii7 a suburban area 9 :i* !re is no o!r
 retail ph>macy )9 #b miles1 z det]m9$  
by ! ,secret>y2 or  7iii7 an urban area 
9 :i* !re is no o!r retail ph>macy )9 #a
 mile1 z det]m9$ by ! ,secret>y4  7#c7  
,li/ ( ess5tial retail ph>macies  7,a7  
,publication ( li/ ( ess5tial retail    
ph>macies ,= ea* plan ye> 7beg9n+ ) plan
 ye> #bjbh71 ! ,secret>y %all publi%1 on
 a publicly available int]net website ( 
! ,c5t]s = ,m$ic>e  ,m$icaid ,s]vices1 a
 li/ ( ph>macies t meet ! crit]ia       
describ$ 9 subp>agraphs 7,a7 & 7,b7 (   
p>agraph 7#b7 to be consid]$ an ess5tial

 retail ph>macy4  7,b7 ,requir$         
submissions f pdp sponsors ,= ea* plan  
ye> 7beg9n+ ) plan ye> #bjbh71 ea* ,,pdp
 sponsor (f]+ a prescription drug plan &
 ea* ,,ma organization (f]+ an ,,ma-,,pd
 plan %all submit to ! ,secret>y1 = !   
purposes ( det]m9+ retail ph>macies t   
meet ! crit]ion specifi$ 9 subp>agraph  
7,a7 ( p>agraph 7#b71 a li/ ( retail    
ph>macies t are affiliates ( su* sponsor
 or organization1 or are affiliates ( a 
ph>macy b5efit manag] act+ on behalf (  
su* sponsor or organization1 at a "t1 & 
9 a =m & mann]1 specifi$ by ! ,secret>y4
  7,c7 ,report+ by pdp sponsors & ma    
organizations ,= ea* plan ye> beg9n+ )  
plan ye> #bjbg1 ea* ,,pdp sponsor (f]+ a
 prescription drug plan & ea* ,,ma      
organization (f]+ an ,,ma-,,pd plan "u  
?is "p %all submit to ! ,secret>y       
in=mation on inc5tive paym5ts & o!r fees
 paid by su* sponsor or organization to 
ph>macies1 ins(> z any su* paym5ts or   
fees are n o!rwise report$1 at a "t1 & 9
 a =m & mann]1 specifi$ by ! ,secret>y4 

7,d7 ,implem5tation ,not)/&+ any o!r    
provision ( law1 ! ,secret>y may        
implem5t ?is p>agraph by program        
in/ruction or o!rwise4  7,e7            
,nonapplication ( pap]work r$uction ,act
 ,*apt] #ce ( title #dd1 ,unit$ ,/ates  
,code1 %all n apply to ! implem5tation (
 ?is p>agraph4  7#d7 ,def9ition (       
affiliate2 ph>macy b5efit manag] ,9 ?is 
subsection1 ! t]ms affiliate & ph>macy  
b5efit manag] h ! mean+ giv5 ^? t]ms 9  
section #ahfj;,d-#ab7;h77#g74  4  7#c7  
,en=cem5t  7,a7 ,9 g5]al ,section       
#ahfj;,d-#d7;b77#a7 ( ! ,social         
,security ,act 7#db ,u4,s4,c4           
#aciew-#ajd7;b77#a77 is am5d$ by add+ at
 ! end ! foll[+ new subp>agraph3  7,f7  
,en=cem5t ( /&>ds = reasonable &        
relevant contract t]ms & conditions  7i7
 ,allegation submission process  7,i7 ,9
 g5]al ,n lat] ?an ,janu>y #a1 #bjbh1 ! 
,secret>y %all e/abli% a process ?r\gh  
:i* a ph>macy may submit to ! ,secret>y 
an allegation ( a violation by a ,,pdp  
sponsor (f]+ a prescription drug plan ( 

! /&>ds = reasonable & relevant contract
 t]ms & conditions "u subp>agraph       
7,a77ii71 or ( subclause 7,,viii7 ( ?is 
clause4  7,,ii7 ,frequ5cy ( submission  
7aa7 ,9 g5]al ,except z provid$ 9 item  
7bb71 ! allegation submission process "u
 ?is clause %all all[ ph>macies to      
submit any allegations ( violations     
describ$ 9 subclause 7,i7 n m frequ5tly 
?an once p] plan ye> p] contract betwe5 
a ph>macy & a ,,pdp sponsor4  7bb7      
,allegations relat+ to contract         
modifications ,9 ! case :]e a contract  
betwe5 a ph>macy & a ,,pdp sponsor is   
modifi$ foll[+ ! submission (           
allegations by a ph>macy ) respect to   
su* contract & plan ye>1 ! allegation   
submission process "u ?is clause %all   
all[ su* ph>macy to submit an additional
 allegation relat$ to ^? modifications )
 respect to su* contract & plan ye>4    
7,,iii7 ,access to relevant docum5ts &  
mat]ials ,a ,,pdp sponsor subject to an 
allegation "u ?is clause-- 7aa7 %all    
provide docum5ts or mat]ials1 z specifi$

 by ! ,secret>y1 includ+ contract (f]s  
made by su* sponsor to su* ph>macy or   
correspond5ce relat$ to su* (f]s1 to !  
,secret>y at a "t1 & 9 a =m & mann]1    
specifi$ by ! ,secret>y2 &  7bb7 %all n 
prohibit or o!rwise limit ! ability ( a 
ph>macy to submit su* docum5ts or       
mat]ials to ! ,secret>y = ! purpose (   
submitt+ an allegation or provid+       
evid5ce = su* an allegation "u ?is      
clause4  7,,iv7 ,/&>diz$ template ,!    
,secret>y %all e/abli% a /&>diz$        
template = ph>macies to use = !         
submission ( allegations describ$ 9     
subclause 7,i74 ,su* template %all      
require t ! submission include a        
c]tification by ! ph>macy t ! in=mation 
includ$ is accurate1 complete1 & true to
 ! be/ ( ! k1 in=mation1 & belief ( su* 
ph>macy4  7,v7 ,prev5t+ frivol\s        
allegations ,9 ! case :]e ! ,secret>y   
det]m9es t a ph>macy has submitt$       
frivol\s allegations "u ?is clause on a 
r\t9e basis1 ! ,secret>y may tempor>ily 
prohibit su* ph>macy f us+ ! allegation 

submission process "u ?is clause1 z     
det]m9$ appropriate by ! ,secret>y4     
7,,vi7 ,exemption f fre$om ( in=mation  
,act ,allegations submitt$ "u ?is clause
 %all be exempt f disclosure "u section 
#eeb ( title #e1 ,unit$ ,/ates ,code4   
7,,vii7 ,rule ( con/ruction ,no?+ 9 ?is 
clause %all be con/ru$ z limit+ !       
ability ( a ph>macy to pursue o!r legal 
actions or rem$ies1 consi/5t )          
applicable ,f$]al or ,/ate law1 )       
respect to a pot5tial violation ( a     
requirem5t describ$ 9 ?is subp>agraph4  
7,,viii7 ,anti-retaliation &            
anti-co]cion ,consi/5t ) applicable     
,f$]al or ,/ate law1 a ,,pdp sponsor    
%all n-- 7aa7 retaliate aga9/ a ph>macy 
= submitt+ any allegations "u ?is       
clause2 or  7bb7 co]ce1 intimidate1     
?reat51 or int]f]e ) ! ability ( a      
ph>macy to submit any su* allegations4  
7ii7 ,inve/igation ,! ,secret>y %all    
inve/igate1 z det]m9$ appropriate by !  
,secret>y1 allegations submitt$ pursuant
 to clause 7i74  7iii7 ,en=cem5t  7,i7  

,9 g5]al ,9 ! case :]e ! ,secret>y      
det]m9es t a ,,pdp sponsor (f]+ a       
prescription drug plan has violat$ !    
/&>ds = reasonable & relevant contract  
t]ms & conditions "u subp>agraph        
7,a77ii71 ! ,secret>y may use au?orities
 "u sections #aheg7;g7 &                
#ahfj;,d-#ab7;b77#c77;,e7 to impose     
civil monet>y p5alties or o!r int]m$iate
 sanctions4  7,,ii7 ,application ( civil
 monet>y p5alties ,! provisions (       
section #aabh;,a 7o!r ?an subsections   
7a7 & 7b77 %all apply to a civil monet>y
 p5alty "u ?is clause 9 ! same mann] z  
su* provisions apply to a p5alty or     
proce$+ "u section #aabh;,a7a74  4  7,b7
 ,con=m+ am5dm5t ,section #aheg7;g77#a7 
( ! ,social ,security ,act 7#db         
,u4,s4,c4 #aciew-#bg7;g77#a77 is am5d$--
 7i7 9 subp>agraph 7,j71 by /rik+ or    
aft] ! semicolon2  7ii7 by r$esignat+   
subp>agraph 7,k7 z subp>agraph 7,l72    
7iii7 by ins]t+ aft] subp>agraph 7,j71 !
 foll[+ new subp>agraph3  7,k7 fails to 
comply ) ! /&>ds = reasonable & relevant

 contract t]ms & conditions "u          
subp>agraph 7,a77ii7 ( section          
#ahfj;,d-#d7;b77#a72 or  2  7iv7 9      
subp>agraph 7,l71 z r$esignat$ by clause
 7ii71 by /rik+ ?r\gh 7,j7 & ins]t+     
?r\gh 7,k72 &  7v7 9 ! flu% matt] foll[+
 subp>agraph 7,l71 z s r$esignat$1 by   
/rik+ subp>agraphs 7,a7 ?r\gh 7,k7 &    
ins]t+ subp>agraphs 7,a7 ?r\gh 7,l74    
7#d7 ,acc\ntability ( ph>macy b5efit    
manag]s = violations ( reasonable &     
relevant contract t]ms & conditions     
7,a7 ,9 g5]al ,section #ahfj;,d-#ab7;b7 
( ! ,social ,security ,act 7#db         
,u4,s4,c4 #aciew-#aab7 is am5d$ by add+ 
at ! end ! foll[+ new p>agraph3  7#i7   
,acc\ntability ( ph>macy b5efit manag]s 
= violations ( reasonable & relevant    
contract t]ms & conditions ,= plan ye>s 
beg9n+ on or aft] ,janu>y #a1 #bjbh1 ea*
 contract ent]$ into ) a ,,pdp sponsor  
"u ?is "p ) respect to a prescription   
drug plan (f]$ by su* sponsor %all      
provide t any ph>macy b5efit manag] act+
 on behalf ( su* sponsor has a writt5   

agreem5t ) ! ,,pdp sponsor "u :i* !     
ph>macy b5efit manag] agrees to         
reimburse ! ,,pdp sponsor = any am\nts  
paid by su* sponsor "u section          
#ahfj;,d-#d7;b77#a77;,f77iii77,i7 to !  
,secret>y z a result ( a violation      
describ$ 9 su* section if su* violation 
is relat$ to a responsibility delegat$  
to ! ph>macy b5efit manag] by su* ,,pdp 
sponsor4  4  7,b7 ,,ma-,,pd plans       
,section #aheg7;f77#c7 ( ! ,social      
,security ,act 7#db ,u4,s4,c4           
#aciew-#bg7;f77#c77 is am5d$ by add+ at 
! end ! foll[+ new subp>agraph3  7,f7   
,acc\ntability ( ph>macy b5efit manag]s 
= violations ( reasonable & relevant    
contract t]ms ,= plan ye>s beg9n+ on or 
aft] ,janu>y #a1 #bjbh1 section         
#ahfj;,d-#ab7;b77#i74  4  7#e7 ,bi5nial 
report on en=cem5t & ov]sight ( ph>macy 
access requirem5ts ,section #ahfj;,d-#db
 ( ! ,social ,security ,act 7#db        
,u4,s4,c4 #aciew-#aeb71 z am5d$ by      
p>agraph 7#b71 is am5d$ by add+ at ! end
 ! foll[+ new subsection3  7f7 ,bi5nial 

report on en=cem5t & ov]sight ( ph>macy 
access requirem5ts  7#a7 ,9 g5]al ,n    
lat] ?an #b ye>s aft] ! date ( enactm5t 
( ?is subsection1 & at lea/ once e #b   
ye>s !reaft]1 ! ,secret>y %all publi% a 
report on en=cem5t & ov]sight actions & 
activities und]tak5 by ! ,secret>y )    
respect to ! requirem5ts "u section     
#ahfj;,d-#d7;b77#a74  7#b7 ,limitation  
,a report "u p>agraph 7#a7 %all n       
disclose-- 7,a7 id5tifiable in=mation   
ab\t individuals or entities unless su* 
in=mation is o!rwise publicly available2
 or  7,b7 trade secrets ) respect to any
 entities4  4  7#f7 ,fund+ ,9 addition  
to am\nts o!rwise available1 !re is     
appropriat$ to ! ,c5t]s = ,m$ic>e       
,m$icaid ,s]vices ,program ,managem5t   
,acc\nt1 out ( any money 9 ! ,treasury n
 o!rwise appropriat$1 #ahh1jjj1jjj =    
fiscal ye> #bjbf1 to rema9 available    
until exp5d$1 to c>ry out ?is           
subsection4  7b7 ,mod]niz+ & ensur+     
,,pbm acc\ntability  7#a7 ,9 g5]al  7,a7
 ,prescription drug plans ,section      

#ahfj;,d-#ab ( ! ,social ,security ,act 
7#db ,u4,s4,c4 #aciew-#aab7 is am5d$ by 
add+ at ! end ! foll[+ new subsection3  
7h7 ,requirem5ts relat+ to ph>macy      
b5efit manag]s ,= plan ye>s beg9n+ on or
 aft] ,janu>y #a1 #bjbh3 7#a7 ,agreem5ts
 ) ph>macy b5efit manag]s ,ea* contract 
ent]$ into ) a ,,pdp sponsor "u ?is "p )
 respect to a prescription drug plan    
(f]$ by su* sponsor %all provide t any  
ph>macy b5efit manag] act+ on behalf (  
su* sponsor has a writt5 agreem5t ) !   
,,pdp sponsor "u :i* ! ph>macy b5efit   
manag]1 & any affiliates ( su* ph>macy  
b5efit manag]1 z applicable1 agree to   
meet ! foll[+ requirem5ts3 7,a7 ,no     
income o!r ?an bona fide s]vice fees    
7i7 ,9 g5]al ,! ph>macy b5efit manag] & 
any affiliate ( su* ph>macy b5efit      
manag] %all n d]ive any remun]ation )   
respect to any s]vices provid$ on behalf
 ( any entity or individual1 9          
connection ) ! utilization ( cov]$ "p ,d
 drugs1 f any su* entity or individual  
o!r ?an bona fide s]vice fees1 subject  

to clauses 7ii7 & 7iii74  7ii7 ,inc5tive
 paym5ts ,= ! purposes ( ?is subsection1
 an inc5tive paym5t 7z det]m9$ by !     
,secret>y7 paid by a ,,pdp sponsor to a 
ph>macy b5efit manag] t is p]=m+ s]vices
 on behalf ( su* sponsor %all be deem$ a
 bona fide s]vice fee 7ev5 if su* paym5t
 does n o!rwise meet ! def9ition ( su*  
t]m "u p>agraph 7#g77;,b77 if su* paym5t
 is a flat doll> am\nt1 is consi/5t )   
fair m>ket value 7z specifi$ by !       
,secret>y71 is relat$ to s]vices        
actually p]=m$ by ! ph>macy b5efit      
manag] or affiliate ( su* ph>macy b5efit
 manag]1 on behalf ( ! ,,pdp sponsor    
mak+ su* paym5t1 9 connection ) !       
utilization ( cov]$ "p ,d drugs1 & meets
 additional requirem5ts1 if any1 z      
det]m9$ appropriate by ! ,secret>y4     
7iii7 ,cl>ification on rebates &        
disc\nts us$ to l[] co/s = cov]$ "p d   
drugs ,rebates1 disc\nts1 & o!r price   
concessions receiv$ by a ph>macy b5efit 
manag] or an affiliate ( a ph>macy      
b5efit manag] f manufactur]s1 ev5 if su*

 price concessions are calculat$ z a    
p]c5tage ( a drug's price1 %all n be    
consid]$ a violation ( ! requirem5ts (  
clause 7i7 if !y are fully pass$ ?r\gh  
to a ,,pdp sponsor & are compliant ) all
 regulatory & subregulatory requirem5ts 
relat$ to direct & indirect remun]ation 
= manufactur] rebates "u ?is "p1 includ+
 9 cases :]e a ,,pdp sponsor is act+ z a
 ph>macy b5efit manag] on behalf ( a    
prescription drug plan (f]$ by su* ,,pdp
 sponsor4  7iv7 ,evaluation (           
remun]ation arrangem5ts ,compon5ts (    
subsets ( remun]ation arrangem5ts 7su* z
 fees or o!r =ms ( comp5sation paid to  
or reta9$ by ! ph>macy b5efit manag] or 
affiliate ( su* ph>macy b5efit manag]71 
z det]m9$ appropriate by ! ,secret>y1   
betwe5 ph>macy b5efit manag]s or        
affiliates ( su* ph>macy b5efit manag]s1
 z applicable1 & o!r entities involv$ 9 
! disp5s+ or utilization ( cov]$ "p ,d  
drugs 7includ+ ,,pdp sponsors1          
manufactur]s1 ph>macies1 & o!r entities 
z det]m9$ appropriate by ! ,secret>y7   

%all be subject to review by !          
,secret>y1 9 consultation ) ! ,(fice ( !
 ,inspector ,g5]al ( ! ,dep>tm5t (      
,heal? & ,human ,s]vices1 z det]m9$     
appropriate by ! ,secret>y4 ,!          
,secret>y1 9 consultation ) ! ,(fice ( !
 ,inspector ,g5]al1 %all review :e!r    
remun]ation "u su* arrangem5ts is       
consi/5t ) fair m>ket value 7z specifi$ 
by ! ,secret>y7 ?r\gh reviews &         
assessm5ts ( su* remun]ation1 z det]m9$ 
appropriate4  7v7 ,disgorgem5t ,!       
ph>macy b5efit manag] %all disgorge any 
remun]ation paid to su* ph>macy b5efit  
manag] or an affiliate ( su* ph>macy    
b5efit manag] 9 violation ( ?is         
subp>agraph to ! ,,pdp sponsor4  7vi7   
,additional requirem5ts ,! ph>macy      
b5efit manag] %all-- 7,i7 ent] into a   
writt5 agreem5t ) any affiliate ( su*   
ph>macy b5efit manag]1 "u :i* !         
affiliate %all id5tify & disgorge any   
remun]ation describ$ 9 clause 7v7 to !  
ph>macy b5efit manag]2 &  7,,ii7 atte/1 
subject to any requirem5ts det]m9$      

appropriate by ! ,secret>y1 t ! ph>macy 
b5efit manag] has ent]$ into a writt5   
agreem5t describ$ 9 subclause 7,i7 ) any
 relevant affiliate ( ! ph>macy b5efit  
manag]4  7,b7 ,transp>5cy reg>d+        
gu>antees & co/ p]=mance evaluations ,! 
ph>macy b5efit manag] %all-- 7i7 def9e1 
int]pret1 & apply1 9 a fully transp>5t &
 consi/5t mann] = purposes ( calculat+  
or o!rwise evaluat+ ph>macy b5efit      
manag] p]=mance aga9/ pric+ gu>antees or
 simil> co/ p]=mance measurem5ts relat$ 
to rebates1 disc\nts1 price concessions1
 or net co/s1 t]ms su* z-- 7,i7 g5]ic   
drug1 9 a mann] consi/5t ) ! def9ition (
 ! t]m "u section #dbc4d ( title #db1   
,code ( ,f$]al ,regulations1 or a       
successor regulation2  7,,ii7 br& "n    
drug1 9 a mann] consi/5t ) ! def9ition (
 ! t]m "u section #dbc4d ( title #db1   
,code ( ,f$]al ,regulations1 or a       
successor regulation2  7,,iii7 specialty
 drug2  7,,iv7 rebate2 &  7,v7 disc\nt2 
7ii7 id5tify any drugs1 claims1 or price
 concessions exclud$ f any pric+        

gu>antee or o!r co/ p]=mance measure 9 a
 cle> & consi/5t mann]2 &  7iii7 :]e a  
pric+ gu>antee or o!r co/ p]=mance      
measure is bas$ on a pric+ b5*m>k o!r   
?an ! :olesale acquisition co/ 7z def9$ 
9 section #ahdg;,a7c77#f77;,b77 ( a     
drug1 calculate & provide a :olesale    
acquisition co/-bas$ equival5t to !     
pric+ gu>antee or o!r co/ p]=mance      
measure4  7,c7 ,provision ( in=mation   
7i7 ,9 g5]al ,n lat] ?an ,july #a ( ea* 
ye>1 beg9n+ 9 #bjbh1 ! ph>macy b5efit   
manag] %all submit to ! ,,pdp sponsor1 &
 to ! ,secret>y1 a report1 9 accordance 
) ?is subp>agraph1 & %all make su*      
report available to su* sponsor at no   
co/ to su* sponsor 9 a =mat specifi$ by 
! ,secret>y "u p>agraph 7#e74 ,ea* su*  
report %all include1 ) respect to su*   
,,pdp sponsor & ea* plan (f]$ by su*    
sponsor1 ! foll[+ in=mation ) respect to
 ! previ\s plan ye>3 7,i7 ,a li/ ( all  
drugs cov]$ by ! plan t 7 disp5s$       
includ+1 ) respect to ea* su* drug--    
7aa7 ! br& "n1 g5]ic or non-propriet>y  

"n1 & ,national ,drug ,code2  7bb7 !    
numb] ( plan enrollees = :om ! drug 0   
disp5s$1 ! total numb] ( prescription   
claims = ! drug 7includ+ orig9al        
prescriptions & refills1 c\nt$ z sep>ate
 claims71 & ! total numb] ( dosage units
 ( ! drug disp5s$2  7cc7 ! numb] (      
prescription claims describ$ 9 item 7bb7
 by ea* type ( disp5s+ *annel ?r\gh :i* 
! drug 0 disp5s$1 includ+ retail1 mail  
ord]1 specialty ph>macy1 long t]m c>e   
ph>macy1 home infusion ph>macy1 or o!r  
types ( ph>macies or provid]s2  7dd7 !  
av]age :olesale acquisition co/1 li/$ z 
co/ p] day's supply1 co/ p] dosage unit1
 & co/ p] typical c\rse ( treatm5t 7z   
applicable72  7ee7 ! av]age :olesale    
price = ! drug1 li/$ z price p] day's   
supply1 price p] dosage unit1 & price p]
 typical c\rse ( treatm5t 7z            
applicable72  7ff7 ! total out-(-pocket 
sp5d+ by plan enrollees on su* drug aft]
 application ( any b5efits "u ! plan1   
includ+ plan enrollee sp5d+ ?r\gh       
copaym5ts1 co9surance1 & d$uctibles2    

7gg7 total rebates paid by ! manufactur]
 on ! drug z report$ "u ! ,detail$ ,,dir
 ,report 7or any successor report7      
submitt$ by su* sponsor to ! ,c5t]s =   
,m$ic>e  ,m$icaid ,s]vices2  7hh7 all   
o!r direct or indirect remun]ation on ! 
drug z report$ "u ! ,detail$ ,,dir      
,report 7or any successor report7       
submitt$ by su* sponsor to ! ,c5t]s =   
,m$ic>e  ,m$icaid ,s]vices2  7ii7 !     
av]age ph>macy reimbursem5t am\nt paid  
by ! plan = ! drug 9 ! aggregate &      
disaggregat$ by disp5s+ *annel id5tifi$ 
9 item 7cc72  7jj7 ! av]age ,national   
,av]age ,drug ,acquisition ,co/         
7,,nadac72 &  7kk7 total                
manufactur]-d]iv$ rev5ue1 inclusive (   
bona fide s]vice fees1 attributable to !
 drug & reta9$ by ! ph>macy b5efit      
manag] & any affiliate ( su* ph>macy    
b5efit manag]4  7,,ii7 ,9 ! case ( a    
ph>macy b5efit manag] t has an affiliate
 t is a retail1 mail ord]1 or specialty 
ph>macy1 ) respect to drugs cov]$ by su*
 plan t 7 disp5s$1 ! foll[+ in=mation3  

7aa7 ,! p]c5tage ( total prescriptions t
 7 disp5s$ by ph>macies t are an        
affiliate ( ! ph>macy b5efit manag] =   
ea* drug4  7bb7 ,! int]qu>tile range ( !
 total comb9$ co/s paid by ! plan & plan
 enrollees1 p] dosage unit1 p] c\rse (  
treatm5t1 p] #cj-;day supply1 & p]      
#ij-;day supply = ea* drug disp5s$ by   
ph>macies t are n an affiliate ( !      
ph>macy b5efit manag] & t are includ$ 9 
! ph>macy network ( su* plan4  7cc7 ,!  
int]qu>tile range ( ! total comb9$ co/s 
paid by ! plan & plan enrollees1 p]     
dosage unit1 p] c\rse ( treatm5t1 p]    
#cj-;day supply1 & p] #ij-;day supply = 
ea* drug disp5s$ by ph>macies t are an  
affiliate ( ! ph>macy b5efit manag] & t 
are includ$ 9 ! ph>macy network ( su*   
plan4  7dd7 ,! l[e/ total comb9$ co/    
paid by ! plan & plan enrollees1 p]     
dosage unit1 p] c\rse ( treatm5t1 p]    
#cj-;day supply1 & p] #ij-;day supply1 =
 ea* drug t is available f any ph>macy  
includ$ 9 ! ph>macy network ( su* plan4 
7ee7 ,! diff]5ce betwe5 ! av]age        

acquisition co/ ( ! affiliate1 su* z a  
ph>macy or o!r entity t acquires        
prescription drugs1 t initially acquires
 ! drug & ! am\nt report$ "u subclause  
7,i77jj7 = ea* drug4  7ff7 ,a li/       
inclusive ( ! br& "n1 g5]ic or          
non-propriet>y "n1 & ,national ,drug    
,code ( cov]$ "p ,d drugs subject to an 
agreem5t ) a cov]$ entity "u section    
#cdj;,b ( ! ,public ,heal? ,s]vice ,act 
= :i* ! ph>macy b5efit manag] or an     
affiliate ( ! ph>macy b5efit manag] _h a
 contract or o!r arrangem5t ) su* a     
cov]$ entity 9 ! s]vice area ( su* plan4
  7,,iii7 ,:]e a drug approv$ "u section
 #eje7;c7 ( ! ,f$]al ,food1 ,drug1 &    
,cosmetic ,act 7ref]r$ to 9 ?is         
subclause z ! li/$ drug7 is cov]$ by !  
plan1 ! foll[+ in=mation3 7aa7 ,a li/ ( 
curr5tly m>ket$ g5]ic drugs approv$ "u  
section #eje7;j7 ( ! ,f$]al ,food1      
,drug1 & ,cosmetic ,act pursuant to an  
application t ref]5ces su* li/$ drug t  
are n cov]$ by ! plan1 are cov]$ on !   
same =mul>y ti] or a =mul>y ti]         

typically associat$ ) high] co/-%>+ ?an 
! li/$ drug1 or are subject to          
utilization managem5t t ! li/$ drug is n
 subject to4  7bb7 ,! e/imat$ av]age    
b5efici>y co/-%>+ "u ! plan = a #cj-;day
 supply ( ! li/$ drug4  7cc7 ,:]e a     
g5]ic drug li/$ "u item 7aa7 is on a    
=mul>y ti] typically associat$ ) high]  
co/-%>+ ?an ! li/$ drug1 ! e/imat$      
av]age co/-%>+ t a b5efici>y w\ld h paid
 = a #cj-;day supply ( ea* ( ! g5]ic    
drugs describ$ 9 item 7aa71 _h ! plan   
provid$ cov]age = su* drugs on ! same   
=mul>y ti] z ! li/$ drug4  7dd7 ,a      
writt5 ju/ification = provid+ m         
favorable cov]age ( ! li/$ drug ?an !   
g5]ic drugs describ$ 9 item 7aa74  7ee7 
,! numb] ( curr5tly m>ket$ g5]ic drugs  
approv$ "u section #eje7;j7 ( ! ,f$]al  
,food1 ,drug1 & ,cosmetic ,act pursuant 
to an application t ref]5ces su* li/$   
drug4  7,,iv7 ,:]e a ref]5ce product 7z 
def9$ 9 section #cea7;i7 ( ! ,public    
,heal? ,s]vice ,act7 is cov]$ by ! plan1
 ! foll[+ in=mation3 7aa7 ,a li/ (      

curr5tly m>ket$ biosimil> biological    
products lic5s$ "u section #cea7k7 ( !  
,public ,heal? ,s]vice ,act pursuant to 
an application t ref]s to su* ref]5ce   
product t are n cov]$ by ! plan1 are    
cov]$ on ! same =mul>y ti] or a =mul>y  
ti] typically associat$ ) high] co/-%>+ 
?an ! ref]5ce product1 or are subject to
 utilization managem5t t ! ref]5ce      
product is n subject to4  7bb7 ,!       
e/imat$ av]age b5efici>y co/-%>+ "u !   
plan = a #cj-;day supply ( ! ref]5ce    
product4  7cc7 ,:]e a biosimil>         
biological product li/$ "u item 7aa7 is 
on a =mul>y ti] typically associat$ )   
high] co/-%>+ ?an ! ref]5ce product1 !  
e/imat$ av]age co/-%>+ t a b5efici>y    
w\ld h paid = a #cj-;day supply ( ea* ( 
! biosimil> biological products describ$
 9 item 7aa71 _h ! plan provid$ cov]age 
= su* products on ! same =mul>y ti] z ! 
ref]5ce product4  7dd7 ,a writt5        
ju/ification = provid+ m favorable      
cov]age ( ! ref]5ce product ?an !       
biosimil> biological product describ$ 9 

item 7aa74  7ee7 ,! numb] ( curr5tly    
m>ket$ biosimil> biological products    
lic5s$ "u section #cea7k7 ( ! ,public   
,heal? ,s]vice ,act1 pursuant to an     
application t ref]s to su* ref]5ce      
product4  7,v7 ,total gross sp5d+ on    
cov]$ "p ,d drugs by ! plan1 n net (    
rebates1 fees1 disc\nts1 or o!r direct  
or indirect remun]ation4  7,,vi7 ,!     
total am\nt reta9$ by ! ph>macy b5efit  
manag] or an affiliate ( su* ph>macy    
b5efit manag] 9 rev5ue relat$ to        
utilization ( cov]$ "p ,d drugs "u t    
plan1 inclusive ( bona fide s]vice fees4
  7,,vii7 ,! total sp5d+ on cov]$ "p ,d 
drugs net ( rebates1 fees1 disc\nts1 or 
o!r direct & indirect remun]ation by !  
plan4  7,,viii7 ,an explanation ( any   
b5efit design p>amet]s "u su* plan t    
enc\rage plan enrollees to fill         
prescriptions at ph>macies t are an     
affiliate ( su* ph>macy b5efit manag]1  
su* z mail & specialty home deliv]y     
programs1 & retail & mail auto-refill   
programs4  7,,ix7 ,! foll[+ in=mation3  

7aa7 ,a li/ ( all brok]s1 consultants1  
advisors1 & auditors t receive          
comp5sation f ! ph>macy b5efit manag] or
 an affiliate ( su* ph>macy b5efit      
manag] = ref]rals1 consult+1 audit+1 or 
o!r s]vices (f]$ to ,,pdp sponsors      
relat$ to ph>macy b5efit managem5t      
s]vices4  7bb7 ,! am\nt ( comp5sation   
provid$ by su* ph>macy b5efit manag] or 
affiliate to ea* su* brok]1 consultant1 
advisor1 & auditor4  7cc7 ,! me?odology 
= calculat+ ! am\nt ( comp5sation       
provid$ by su* ph>macy b5efit manag] or 
affiliate1 = ea* su* brok]1 consultant1 
advisor1 & auditor4  7,x7 ,a li/ ( all  
affiliates ( ! ph>macy b5efit manag]4   
7,,xi7 ,a summ>y docum5t submitt$ 9 a   
/&>diz$ template develop$ by ! ,secret>y
 t includes su* in=mation describ$ 9    
subclauses 7,i7 ?r\gh 7,x74  7ii7       
,writt5 explanation ( contracts or      
agreem5ts ) drug manufactur]s  7,i7 ,9  
g5]al ,! ph>macy b5efit manag] %all1 n  
lat] ?an #cj days aft] ! f9alization (  
any contract or agreem5t betwe5 su*     

ph>macy b5efit manag] or an affiliate ( 
su* ph>macy b5efit manag] & a drug      
manufactur] 7or subsidi>y1 ag5t1 or     
entity affiliat$ ) su* drug manufactur]7
 t makes rebates1 disc\nts1 paym5ts1 or 
o!r f9ancial inc5tives relat$ to "o or m
 cov]$ "p ,d drugs or o!r prescription  
drugs1 z applicable1 ( ! manufactur]    
directly or indirectly cont+5t ^u       
cov]age1 =mul>y placem5t1 or utilization
 managem5t conditions on any o!r cov]$  
"p ,d drugs or o!r prescription drugs1 z
 applicable1 submit to ! ,,pdp sponsor a
 writt5 explanation ( su* contract or   
agreem5t4  7,,ii7 ,requirem5ts ,a writt5
 explanation "u subclause 7,i7 %all--   
7aa7 include ! manufactur] subject to ! 
contract or agreem5t1 all cov]$ "p ,d   
drugs & o!r prescription drugs1 z       
applicable1 subject to ! contract or    
agreem5t & ! manufactur]s ( su* drugs1 &
 a high-level description ( ! t]ms ( su*
 contract or agreem5t & h[ su* t]ms     
apply to su* drugs2 &  7bb7 be c]tifi$  
by ! ,*ief ,executive ,(fic]1 ,*ief     

,f9ancial ,(fic]1 or ,g5]al ,c\nsel (   
su* ph>macy b5efit manag]1 or affiliate 
( su* ph>macy b5efit manag]1 z          
applicable1 or an individual delegat$ ) 
! au?ority to sign on behalf ( "o ( ^!  
(fic]s1 :o reports directly to ! (fic]4 
7,,iii7 ,def9ition ( o!r prescription   
drugs ,= purposes ( ?is clause1 ! t]m   
o!r prescription drugs means            
prescription drugs cov]$ z supplem5tal  
b5efits "u ?is "p or prescription drugs 
paid outside ( ?is "p4  7,d7 ,audit     
rights  7i7 ,9 g5]al ,n less ?an once a 
ye>1 at ! reque/ ( ! ,,pdp sponsor1 !   
ph>macy b5efit manag] %all all[ = an    
audit ( ! ph>macy b5efit manag] to      
ensure compliance ) all t]ms &          
conditions "u ! writt5 agreem5t describ$
 9 ?is p>agraph & ! accuracy ( in=mation
 report$ "u subp>agraph 7,c74  7ii7     
,auditor ,! ,,pdp sponsor %all h ! "r to
 select an auditor4 ,! ph>macy b5efit   
manag] %all n impose any limitations on 
! selection ( su* auditor4  7iii7       
,provision ( in=mation ,! ph>macy b5efit

 manag] %all make available to su*      
auditor all records1 data1 contracts1 & 
o!r in=mation necess>y to confirm !     
accuracy ( in=mation provid$ "u         
subp>agraph 7,c71 subject to reasonable 
re/rictions on h[ su* in=mation mu/ be  
report$ to prev5t r$isclosure ( su*     
in=mation4  7iv7 ,tim+ ,! ph>macy b5efit
 manag] mu/ provide in=mation "u clause 
7iii7 & o!r in=mation1 data1 & records  
relevant to ! audit to su* auditor )9 #f
 mon?s ( ! initiation ( ! audit &       
respond to reque/s = additional         
in=mation f su* auditor )9 #cj days aft]
 ! reque/ = additional in=mation4  7v7  
,in=mation f affiliates ,! ph>macy      
b5efit manag] %all be responsible =     
provid+ to su* auditor in=mation requir$
 to be report$ "u subp>agraph 7,c7 or "u
 clause 7iii7 ( ?is subp>agraph t is    
own$ or held by an affiliate ( su*      
ph>macy b5efit manag]4  7#b7 ,en=cem5t  
7,a7 ,9 g5]al ,ea* ,,pdp sponsor %all-- 
7i7 disgorge to ! ,secret>y any am\nts  
disgorg$ to ! ,,pdp sponsor by a ph>macy

 b5efit manag] "u p>agraph 7#a77;,a77v72
  7ii7 require1 9 a writt5 agreem5t )   
any ph>macy b5efit manag] act+ on behalf
 ( su* sponsor or affiliate ( su*       
ph>macy b5efit manag]1 t su* ph>macy    
b5efit manag] or affiliate reimburse !  
,,pdp sponsor = any civil money p5alty  
impos$ on ! ,,pdp sponsor z a result ( !
 failure ( ! ph>macy b5efit manag] or   
affiliate to meet ! requirem5ts (       
p>agraph 7#a7 t are applicable to !     
ph>macy b5efit manag] or affiliate "u ! 
agreem5t2 &  7iii7 require1 9 a writt5  
agreem5t ) any su* ph>macy b5efit manag]
 act+ on behalf ( su* sponsor or        
affiliate ( su* ph>macy b5efit manag]1 t
 su* ph>macy b5efit manag] or affiliate 
be subject to punitive rem$ies = brea* (
 contract = failure to comply ) !       
requirem5ts applicable "u p>agraph 7#a74
  7,b7 ,report+ ( alleg$ violations ,!  
,secret>y %all make available & ma9ta9 a
 me*anism = manufactur]s1 ,,pdp         
sponsors1 ph>macies1 & o!r entities t h 
contractual relation%ips ) ph>macy      

b5efit manag]s or affiliates ( su*      
ph>macy b5efit manag]s to report1 on a  
confid5tial basis1 alleg$ violations (  
p>agraph 7#a77;,a7 or subp>agraph 7,c74 
7,c7 ,anti-retaliation & anti-co]cion   
,consi/5t ) applicable ,f$]al or ,/ate  
law1 a ,,pdp sponsor %all n-- 7i7       
retaliate aga9/ an individual or entity 
= report+ an alleg$ violation "u        
subp>agraph 7,b72 or  7ii7 co]ce1       
intimidate1 ?reat51 or int]f]e ) !      
ability ( an individual or entity to    
report any su* alleg$ violations4  7#c7 
,c]tification ( compliance  7,a7 ,9     
g5]al ,ea* ,,pdp sponsor %all furni% to 
! ,secret>y 7at a "t & 9 a mann]        
specifi$ by ! ,secret>y7 an annual      
c]tification ( compliance ) ?is         
subsection1 z well z su* in=mation z !  
,secret>y det]m9es necess>y to c>ry out 
?is subsection4  7,b7 ,implem5tation    
,not)/&+ any o!r provision ( law1 !     
,secret>y may implem5t ?is p>agraph by  
program in/ruction or o!rwise4  7#d7    
,rule ( con/ruction ,no?+ 9 ?is         

subsection %all be con/ru$ z-- 7,a7     
prohibit+ flat disp5s+ fees or          
reimbursem5t or paym5t = +r$i5t co/s    
7includ+ cu/om>y1 indu/ry-/&>d disc\nts 
directly relat$ to drug acquisition t   
are reta9$ by ph>macies or :olesal]s7 to
 entities t acquire or disp5se          
prescription drugs2 or  7,b7 modify+    
regulatory requirem5ts or sub-regulatory
 program in/ruction or guidance relat$  
to ph>macy paym5t1 reimbursem5t1 or     
disp5s+ fees4  7#e7 ,/&>d =mats  7,a7 ,9
 g5]al ,n lat] ?an ,june #a1 #bjbg1 !   
,secret>y %all specify /&>d1            
ma*9e-readable =mats = ph>macy b5efit   
manag]s to submit annual reports requir$
 "u p>agraph 7#a77;,c77i74  7,b7        
,implem5tation ,not)/&+ any o!r         
provision ( law1 ! ,secret>y may        
implem5t ?is p>agraph by program        
in/ruction or o!rwise4  7#f7            
,confid5tiality  7,a7 ,9 g5]al          
,in=mation disclos$ by a ph>macy b5efit 
manag]1 an affiliate ( a ph>macy b5efit 
manag]1 a ,,pdp sponsor1 or a ph>macy "u

 ?is subsection t is n o!rwise publicly 
available or available = pur*ase %all n 
be disclos$ by ! ,secret>y or a ,,pdp   
sponsor receiv+ ! in=mation1 except t ! 
,secret>y may disclose ! in=mation = !  
foll[+ purposes3 7i7 ,z ! ,secret>y     
det]m9es necess>y to c>ry out ?is "p4   
7ii7 ,to p]mit ! ,comptroll] ,g5]al to  
review ! in=mation provid$4  7iii7 ,to  
p]mit ! ,director ( ! ,congressional    
,budget ,(fice to review ! in=mation    
provid$4  7iv7 ,to p]mit ! ,executive   
,director ( ! ,m$ic>e ,paym5t ,advisory 
,commission to review ! in=mation       
provid$4  7v7 ,to ! ,attorney ,g5]al = !
 purposes ( conduct+ ov]sight & en=cem5t
 "u ?is title4  7vi7 ,to ! ,inspector   
,g5]al ( ! ,dep>tm5t ( ,heal? & ,human  
,s]vices 9 accordance ) its au?orities  
"u ! ,inspector ,g5]al ,act ( #aigh     
7section #djf ( title #e1 ,unit$ ,/ates 
,code71 & o!r applicable /atutes4  7,b7 
,re/riction on use ( in=mation ,!       
,secret>y1 ! ,comptroll] ,g5]al1 !      
,director ( ! ,congressional ,budget    

,(fice1 & ! ,executive ,director ( !    
,m$ic>e ,paym5t ,advisory ,commission   
%all n report on or disclose in=mation  
disclos$ pursuant to subp>agraph 7,a7 to
 ! public 9 a mann] t w\ld id5tify-- 7i7
 a specific ph>macy b5efit manag]1      
affiliate1 ph>macy1 manufactur]1        
:olesal]1 ,,pdp sponsor1 or plan2 or    
7ii7 contract prices1 rebates1 disc\nts1
 or o!r remun]ation = specific drugs 9 a
 mann] t may all[ ! id5tification (     
specific contract+ p>ties or ( su*      
specific drugs4  7#g7 ,def9itions ,=    
purposes ( ?is subsection3 7,a7         
,affiliate ,! t]m affiliate means1 )    
respect to any ph>macy b5efit manag] or 
,,pdp sponsor1 any entity t1 directly or
 indirectly-- 7i7 owns or is own$ by1   
controls or is controll$ by1 or is      
o!rwise relat$ 9 any own]%ip /ructure to
 su* ph>macy b5efit manag] or ,,pdp     
sponsor2 or  7ii7 acts z a contractor1  
pr9cipal1 or ag5t to su* ph>macy b5efit 
manag] or ,,pdp sponsor1 ins(> z su*    
contractor1 pr9cipal1 or ag5t p]=ms any 

( ! functions describ$ "u subp>agraph   
7,c74  7,b7 ,bona fide s]vice fee ,! t]m
 bona fide s]vice fee means a fee t is  
reflective ( ! fair m>ket value 7z      
specifi$ by ! ,secret>y1 ?r\gh notice & 
comm5t rulemak+7 = a bona fide1 itemiz$ 
s]vice actually p]=m$ on behalf ( an    
entity1 t ! entity w\ld o!rwise p]=m 7or
 contract =7 9 ! abs5ce ( ! s]vice      
arrangem5t & t is n pass$ on 9 :ole or 9
 "p to a cli5t or cu/om]1 :e!r or n !   
entity takes title to ! drug4 ,su* fee  
mu/ be a flat doll> am\nt & %all n be   
directly or indirectly bas$ on1 or      
cont+5t ^u-- 7i7 drug price1 su* z      
:olesale acquisition co/ or drug b5*m>k 
price 7su* z av]age :olesale price72    
7ii7 ! am\nt ( disc\nts1 rebates1 fees1 
or o!r direct or indirect remun]ation ) 
respect to cov]$ "p ,d drugs disp5s$ to 
enrollees 9 a prescription drug plan1   
except z p]mitt$ pursuant to p>agraph   
7#a77;,a77ii72  7iii7 cov]age or =mul>y 
placem5t decisions or ! volume or value 
( any ref]rals or bus9ess g5]at$ betwe5 

! p>ties to ! arrangem5t2 or  7iv7 any  
o!r am\nts or me?odologies prohibit$ by 
! ,secret>y4  7,c7 ,ph>macy b5efit      
manag] ,! t]m ph>macy b5efit manag]     
means any p]son or entity t1 ei!r       
directly or ?r\gh an int]m$i>y1 acts z a
 price negotiator or gr\p pur*as] on    
behalf ( a ,,pdp sponsor or prescription
 drug plan1 or manages ! prescription   
drug b5efits provid$ by su* sponsor or  
plan1 includ+ ! process+ & paym5t (     
claims = prescription drugs1 ! p]=mance 
( drug utilization review1 ! process+ ( 
drug prior au?orization reque/s1 !      
adjudication ( appeals or grievances    
relat$ to ! prescription drug b5efit1   
contract+ ) network ph>macies1 controll+
 ! co/ ( cov]$ "p ,d drugs1 or !        
provision ( relat$ s]vices4 ,su* t]m    
includes any p]son or entity t c>ries   
out "o or m ( ! activities describ$ 9 ! 
prec$+ s5t5ce1 irrespective ( :e!r su*  
p]son or entity calls itself a ph>macy  
b5efit manag]4  4  7,b7 ,,ma-,,pd plans 
,section #aheg7;f77#c7 ( ! ,social      

,security ,act 7#db ,u4,s4,c4           
#aciew-#bg7;f77#c771 z am5d$ by         
subsection 7a77#d77;,b71 is am5d$ by    
add+ at ! end ! foll[+ new subp>agraph3 
7,g7 ,requirem5ts relat+ to ph>macy     
b5efit manag]s ,= plan ye>s beg9n+ on or
 aft] ,janu>y #a1 #bjbh1 section        
#ahfj;,d-#ab7;h74  4  7,c7              
,nonapplication ( pap]work r$uction ,act
 ,*apt] #ce ( title #dd1 ,unit$ ,/ates  
,code1 %all n apply to ! implem5tation (
 ?is p>agraph4  7,d7 ,fund+  7i7        
,secret>y ,9 addition to am\nts o!rwise 
available1 !re is appropriat$ to !      
,c5t]s = ,m$ic>e  ,m$icaid ,s]vices     
,program ,managem5t ,acc\nt1 out ( any  
money 9 ! ,treasury n o!rwise           
appropriat$1 #aac1jjj1jjj = fiscal ye>  
#bjbf1 to rema9 available until exp5d$1 
to c>ry out ?is p>agraph4  7ii7 ,,oig ,9
 addition to am\nts o!rwise available1  
!re is appropriat$ to ! ,inspector      
,g5]al ( ! ,dep>tm5t ( ,heal? & ,human  
,s]vices1 out ( any money 9 ! ,treasury 
n o!rwise appropriat$1 #bj1jjj1jjj =    

fiscal ye> #bjbf1 to rema9 available    
until exp5d$1 to c>ry out ?is p>agraph4 
7#b7 ,,gao /udy & report on price-relat$
 comp5sation across ! supply *a9  7,a7  
,/udy ,! ,comptroll] ,g5]al ( ! ,unit$  
,/ates 79 ?is p>agraph ref]r$ to z !    
,comptroll] ,g5]al7 %all conduct a /udy 
describ+ ! use ( comp5sation & paym5t   
/ructures relat$ to a prescription      
drug's price )9 ! retail prescription   
drug supply *a9 9 "p ,d ( title ,,xviii 
( ! ,social ,security ,act 7#db         
,u4,s4,c4 #aciew-#aja et seq474 ,su*    
/udy %all summ>ize in=mation f ,f$]al   
ag5cies & indu/ry exp]ts1 to ! ext5t    
available1 ) respect to ! foll[+3 7i7 ,!
 type1 magnitude1 o!r features 7su* z ! 
pric+ b5*m>ks us$71 & preval5ce (       
comp5sation & paym5t /ructures relat$ to
 a prescription drug's price1 su* z     
calculat+ fee am\nts z a p]c5tage ( a   
prescription drug's price1 betwe5       
int]m$i>ies 9 ! prescription drug supply
 *a91 includ+-- 7,i7 ph>macy b5efit     
manag]s2  7,,ii7 ,,pdp sponsors (f]+    

prescription drug plans & ,m$ic>e       
,advantage organizations (f]+ ,,ma-,,pd 
plans2  7,,iii7 drug :olesal]s2  7,,iv7 
ph>macies2  7,v7 manufactur]s2  7,,vi7  
ph>macy s]vices adm9i/rative            
organizations2  7,,vii7 brok]s1         
auditors1 consultants1 & o!r entities   
t-- 7aa7 advise ,,pdp sponsors (f]+     
prescription drug plans & ,m$ic>e       
,advantage organizations (f]+ ,,ma-,,pd 
plans reg>d+ ph>macy b5efits2 or  7bb7  
review ,,pdp sponsor & ,m$ic>e          
,advantage organization contracts )     
ph>macy b5efit manag]s2 &  7,,viii7 o!r 
s]vice provid]s t contract ) any ( !    
entities describ$ 9 subclauses 7,i7     
?r\gh 7,,vii7 t may use price-relat$    
comp5sation & paym5t /ructures1 su* z   
rebate aggregators 7or o!r entities t   
negotiate or process price concessions  
on behalf ( ph>macy b5efit manag]s1 plan
 sponsors1 or ph>macies74  7ii7 ,!      
prim>y bus9ess models & comp5sation     
/ructures = ea* category ( int]m$i>y    
describ$ 9 clause 7i74  7iii7 ,v>iation 

9 price-relat$ comp5sation /ructures    
betwe5 affiliat$ entities 7su* z        
entities ) common own]%ip1 ei!r full or 
p>tial1 & subsidi>y relation%ips7 &     
unaffiliat$ entities4  7iv7 ,pot5tial   
conflicts ( int]e/ among contract+      
entities relat$ to ! use ( prescription 
drug price-relat$ comp5sation /ructures1
 su* z ! pot5tial = fees or o!r paym5ts 
set z a p]c5tage ( a prescription drug's
 price to advantage =mul>y selection1   
di/ribution1 or pur*as+ ( prescription  
drugs ) high] prices4  7v7 ,notable     
diff]5ces1 if any1 9 ! use & level (    
price-bas$ comp5sation /ructures ov] "t 
& betwe5 diff]5t m>ket segm5ts1 su* z "u
 "p ,d ( title ,,xviii ( ! ,social      
,security ,act 7#db ,u4,s4,c4           
#aciew-#aja et seq47 & ! ,m$icaid       
program "u title ,,xix ( su* ,act 7#db  
,u4,s4,c4 #acif et seq474  7vi7 ,!      
effects ( drug price-relat$ comp5sation 
/ructures & alt]native comp5sation      
/ructures on ,f$]al heal? c>e programs &
 program b5efici>ies1 includ+ ) respect 

to co/-%>+1 premiums1 ,f$]al outlays1   
biosimil> & g5]ic drug adoption &       
utilization1 drug %ortage risks1 & !    
pot5tial = fees set z a p]c5tage ( a    
drug's price to advantage ! =mul>y      
selection1 di/ribution1 or pur*as+ (    
drugs ) high] prices4  7vii7 ,o!r issues
 det]m9$ to be relevant & appropriate by
 ! ,comptroll] ,g5]al4  7,b7 ,report ,n 
lat] ?an #b ye>s aft] ! date ( enactm5t 
( ?is p>agraph1 ! ,comptroll] ,g5]al    
%all submit to ,congress a report       
conta9+ ! results ( ! /udy conduct$ "u  
subp>agraph 7,a71 toge!r )              
recomm5dations = su* legislation &      
adm9i/rative action z ! ,comptroll]     
,g5]al det]m9es appropriate4  7#c7      
,med,p,a,c reports on agreem5ts )       
ph>macy b5efit manag]s ) respect to     
prescription drug plans & ma-pd plans   
7,a7 ,9 g5]al ,! ,m$ic>e ,paym5t        
,advisory ,commission %all submit to    
,congress ! foll[+ reports3 7i7 ,initial
 report ,n lat] ?an ! fir/ ,m>* #ae     
occurr+ aft] ! date t is #b ye>s aft] ! 

date on :i* ! ,secret>y makes ! data    
available to ! ,commission1 a report    
reg>d+ agreem5ts ) ph>macy b5efit       
manag]s ) respect to prescription drug  
plans & ,,ma-,,pd plans4 ,su* report    
%all include1 to ! ext5t practicable--  
7,i7 a description ( tr5ds & patt]ns1   
includ+ relevant av]ages1 totals1 & o!r 
figures = ! types ( in=mation submitt$2 
7,,ii7 an analysis ( any diff]5ces 9    
agreem5ts & _! effects on plan enrollee 
out-(-pocket sp5d+ & av]age ph>macy     
reimbursem5t1 & o!r impacts2 &  7,,iii7 
any recomm5dations ! ,commission        
det]m9es appropriate4  7ii7 ,f9al report
 ,n lat] ?an #b ye>s aft] ! date on :i* 
! ,commission submits ! initial report  
"u clause 7i71 a report describ+ any    
*anges ) respect to ! in=mation describ$
 9 clause 7i7 ov] "t1 toge!r ) any      
recomm5dations ! ,commission det]m9es   
appropriate4  7,b7 ,fund+ ,9 addition to
 am\nts o!rwise available1 !re is       
appropriat$ to ! ,m$ic>e ,paym5t        
,advisory ,commission1 out ( any money 9

 ! ,treasury n o!rwise appropriat$1     
#a1jjj1jjj = fiscal ye> #bjbf1 to rema9 
available until exp5d$1 to c>ry out ?is 
p>agraph4