,,ii  #aai? ,,congress  #b;d ,session   
,s4 #chbb  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,febru>y #aj1 #bjbf,ms4
 ,w>r5 7= h]self & ,mr4 ,hawley7        
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on !     
,judici>y  ,a ,,bill  ,to prohibit      
ph>macy b5efit manag]s1 insur]s1 &      
prescription drug or m$ical device      
:olesal]s f be+ "u common own]%ip )     
c]ta9 m$ical s]vice provid]s1 & = o!r   
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,break ,up ,big ,m$ic9e    
,act4  #b4 ,f9d+s ,! ,congress f9ds !   
foll[+3 7#a7 ,l>ge1 v]tically integrat$ 
heal? c>e plat=ms dom9ate ! ,am]ican    
heal? c>e sy/em4 ,^! corporate entities 
own or control e "p ( ! heal? c>e supply
 *a91 includ+ up/ream bus9ess l9es1 l   
heal? insurance plans1 & d[n/ream       
suppli]s1 l ph>macies & physicians4 ,?is
 is ! end result ( an unprec$5t$ wave ( 
consolidation4  7#b7 ,l>ge1 publicly    
trad$ insurance conglom]ates h          
increas+ly engag$ 9 aggressive          

acquisition /rategies1 becom+ "s ( !    
l>ge/ employ]s ( physicians 9 ! c\ntry4 
,z ( #bjbc1 "o conglom]ate controls     
approximately #aj p]c5t ( all ,am]ican  
physicians1 mak+ x ! s+le l>ge/ employ] 
( physicians 9 ! nation4  7#c7 ,m ?an   
?ree-qu>t]s ( all ,am]ican doctors are  
employ$ by corporate entities1 )        
indep5d5t physicians compris+ a small & 
%r9k+ %>e ( ,am]ica's doctors4  7#d7    
,l>ge :olesal]s ( drugs & m$ical devices
 h simil>ly engag$ 9 a wave (           
consolidation4 ,! #c l>ge/ drug         
:olesal]s control #ih p]c5t ( ! ,unit$  
,/ates drug di/ribution m>ket4 ,^!      
conglom]ates h also engag$ 9 sub/antial 
v]tical integration1 acquir+ d[n/ream   
suppli]s includ+ specialty m$ical       
practices & m$ical supply di/ributors4  
,s9ce ,janu>y #bjbd1 ! #c l>ge/ drug    
:olesal]s h propos$ or complet$         
acquisitions ( d[n/ream suppli]s wor?   
approximately #af1jjj1jjj1jjj & spann+ m
 ?an #a1jjj locations across #ce ,/ates4
  7#e7 ,ph>macy b5efit manag]s are      

corporate entities t det]m9e :at drugs w
 be cov]$ by heal? plans1 :at prices    
pati5ts w pay1 & h[ mu* ph>macies w be  
reimburs$4 ,! #c l>ge/ ph>macy b5efit   
manag]s are ea* integrat$ into l>ge1    
corporate heal? c>e plat=ms4 ,^! #c     
ph>macy b5efit manag]s alone process    
ne>ly #hj p]c5t ( prescription drug     
claims4  7#f7 ,own]%ip ( bo? up/ream &  
d[n/ream bus9esses creates inh]5t       
conflicts ( int]e/ = corporate heal? c>e
 plat=ms4 7,a7 ,! ,f$]al ,trade         
,commission has f\nd t v]tically        
integrat$ ph>macy b5efit manag]s h bo? !
 ability & inc5tive to /e] bus9ess to _!
 own affiliat$ ph>macies1 :i* r$uces    
competition & increases prescription    
drug co/s = pati5ts4  7,b7 ,9 !         
physician m>ket1 l>ge insur]s h !       
ability & inc5tive to /e] enrollees to  
provid]s own$ by ! same p>5t company4   
7,c7 ,self-pref]5c+ ( affiliat$         
ph>macies or physicians may all[ l>ge1  
v]tically integrat$ heal? conglom]ates  
to evade /atutory limits on pr(its kn[n 

z ! ,m$ical ,loss ,ratio4 ,gam+ ( !     
pr(it con/ra9t us+ transf] pric+        
te*niques may all[ affiliat$ heal?      
insurance bus9esses to hide pr(its 9 !  
unregulat$ ph>macy or physician bus9ess 
segm5ts1 co/+ enrollees & taxpay]s      
money4  7,d7 ,ext5sive evid5ce supports 
claims t private insur]s issu+ ,m$ic>e  
,advantage plans use employ$ physicians 
to int5sively docum5t ! m$ical          
conditions ( _! enrollees1 g5]at+       
inflat$ paym5ts f ! ,f$]al ,gov]nm5t )\t
 improv+ c>e quality4  7,e7 ,9 !        
:olesale drug di/ribution m>ket1        
acquisitions ( specialty c>e provid]s by
 l>ge :olesal]s c create ! inc5tive &   
ability = ! new1 v]tically integrat$    
company to /e] speciali/s t[>d prescrib+
 ! mo/ lucrative drugs & devices r ?an !
 be/ treatm5t = ! pati5t4  7#g7         
,pursuant to its p[]s "u article ,i1    
section #h1 ( ! ,unit$ ,/ates           
,con/itution1 ,congress has ! ability to
 create any law necess>y & appropriate  
to regulate int]/ate comm]ce4 ,l>ge1    

national heal? conglom]ates op]ate      
across /ate l9es & engage 9 intra/ate   
activities t sub/antially relate to     
int]/ate comm]ce4 ,congress int5ds to   
regulate ^! corporate heal? c>e plat=ms 
9 ! public int]e/4  7#h7 ,9 ord] to     
elim9ate ! conflicts ( int]e/ describ$ 9
 p>agraphs 7#a7 ?r\gh 7#g7 & re/ore     
competition to ! m>ketplace1 ! ,f$]al   
,gov]nm5t %\ld-- 7,a7 protect pati5ts1  
physicians1 ph>macies1 & taxpay]s by    
/ructurally sep>at+ v]tically integrat$ 
heal? conglom]ates2  7,b7 require p>5t  
companies t own an insur] or ph>macy    
b5efit manag] to dive/ any m$ical       
provid]s !y ei!r directly own or control
 ?r\gh managem5t s]vice organizations2  
7,c7 require p>5t companies t own a     
prescription drug or m$ical device      
:olesal] to dive/ any m$ical provid] or 
managem5t s]vice organizations !y own2  
7,d7 enable ,f$]al ag5cies1 ,/ate       
attorneys g5]al1 & private citiz5s to   
br+ civil actions to en=ce ! /ructural  
sep>ation ( ^! companies2 &  7,e7 grant 

! ,f$]al ,trade ,commission & ,dep>tm5t 
( ,ju/ice additional au?ority to review 
& block future actions t w\ld h>m !     
public int]e/ by re-creat+ ! conflicts (
 int]e/ describ$ above4  #c4            
,prohibitions relat+ to anticompetitive 
own]%ip & contracts  7a7 ,prohibition on
 c]ta9 common own]%ip  7#a7 ,involv+ an 
insurance company or ph>macy b5efit     
manag]  7,a7 ,9 g5]al ,x %all be        
unlawful = any p]son to bo?-- 7i7       
directly or indirectly own1 op]ate1     
control1 or direct ! op]ation ( ! :ole  
or any "p (-- 7,i7 a provid]2 or  7,,ii7
 a managem5t s]vices organization2 &    
7ii7 directly or indirectly own1 op]ate1
 or control ! :ole or any "p (-- 7,i7 an
 insurance company2 &  7,,ii7 a ph>macy 
b5efit manag]4  7,b7 ,dive/m5t ,n lat]  
?an #a ye> aft] ! date ( enactm5t ( ?is 
,act1 any p]son 9 violation (           
subp>agraph 7,a7 %all dive/ "o ( !      
foll[+3 7i7 ,all entities describ$ 9    
subp>agraph 7,a77i74  7ii7 ,all entities
 describ$ 9 subp>agraph 7,a77ii74  7#b7 

,involv+ a :olesal]  7,a7 ,9 g5]al ,x   
%all be unlawful = any p]son to bo?--   
7i7 directly or indirectly own1 op]ate1 
control1 or direct ! op]ation ( ! :ole  
or any "p ( a provid] or managem5t      
s]vices organization2 &  7ii7 directly  
or indirectly own1 op]ate1 or control ! 
:ole or any "p ( a prescription drug or 
m$ical device :olesal]4  7,b7 ,dive/m5t 
,n lat] ?an #a ye> aft] ! date (        
enactm5t ( ?is ,act1 any p]son 9        
violation ( subp>agraph 7,a7 %all dive/ 
"o ( ! foll[+3 7i7 ,all entities        
describ$ 9 subp>agraph 7,a77i74  7ii7   
,all entities describ$ 9 subp>agraph    
7,a77ii74  7b7 ,antitru/ en=cem5t  7#a7 
,9 g5]al ,bo? ! ,f$]al ,trade           
,commission & ! ,assi/ant ,attorney     
,g5]al 9 *>ge ( ! ,antitru/ ,division   
%all h jurisdiction1 jo9tly or          
sep>ately1 to en=ce ?is section4  7#b7  
,p5alties = failure to dive/  7,a7      
,guidance ,n lat] ?an #cj days aft] !   
date ( enactm5t ( ?is ,act1 ! ,*air ( ! 
,f$]al ,trade ,commission & ! ,assi/ant 

,attorney ,g5]al 9 *>ge ( ! ,antitru/   
,division %all issue guidance specify+  
mile/ones = dive/m5t )9 ! deadl9e "u    
subsection 7a74  7,b7 ,p5alties  7i7 ,9 
g5]al ,= any p]son t does n comply ) !  
mile/ones specifi$ "u subp>agraph 7,a71 
! ,*air ( ! ,f$]al ,trade ,commission or
 ! ,assi/ant ,attorney ,g5]al 9 *>ge ( !
 ,antitru/ ,division %all cause #aj     
p]c5t ( ! pr(its ( ! p]son to be        
transf]r$ into escr[ on a mon?ly basis1 
to be-- 7,i7 return$ to ! p]son if      
dive/m5t occurs by ! deadl9e "u         
subsection 7a72 or  7,,ii7 deposit$ into
 ! fund describ$ 9 subsection 7c77#g7 if
 dive/m5t does n occur by ! deadl9e "u  
subsection 7a74  7,c7 ,tru/ee ,if       
dive/iture does n occur by ! deadl9e "u 
subsection 7a71 a dive/iture tru/ee %all
 ov]see ! dive/iture requir$ "u t       
p>agraph4 ,! dive/iture tru/ee %all h ! 
au?ority to sell ! entity to :i* !      
dive/iture requirem5t applies4  7c7     
,civil actions  7#a7 ,9 g5]al ,:5 !     
,inspector ,g5]al ( ! ,dep>tm5t ( ,heal?

 & ,human ,s]vices1 ! ,assi/ant         
,attorney ,g5]al 9 *>ge ( ! ,antitru/   
,division ( ! ,dep>tm5t ( ,ju/ice1 !    
,f$]al ,trade ,commission1 or an        
attorney g5]al ( a ,/ate has reason to  
believe t a p]son is 9 violation (      
subsection 7a71 su* ,inspector ,g5]al1  
,assi/ant ,attorney ,g5]al1 ,f$]al      
,trade ,commission or attorney g5]al ( a
 ,/ate may br+ a civil action 9 an      
appropriate di/rict c\rt ( ! ,unit$     
,/ates4  7#b7 ,private "r ( action  7,a7
 ,9 g5]al ,an individual alleg+ damages 
z a result ( a violation ( ?is ,act may 
br+ a civil action 9 any c\rt ( compet5t
 jurisdiction1 ,/ate or ,f$]al4  7,b7   
,relief ,9 a civil action br\ght "u     
subp>agraph 7,a7 9 :i* ! pla9tiff       
prevails1 ! c\rt may aw>d-- 7i7 treble  
damages2  7ii7 reasonable attorney's    
fees & litigation co/s2 &  7iii7 any o!r
 relief1 includ+ equitable or decl>atory
 relief1 t ! c\rt det]m9es appropriate4 
7#c7 ,actions by /ate attorneys g5]al   
,if ! attorney g5]al ( a ,/ate has      

reason to believe t an int]e/ ( !       
resid5ts ( ! ,/ate has be5 or is be+    
?reat5$ or adv]sely affect$ by a        
practice t violates subsection 7a71 !   
attorney g5]al ( ! ,/ate may1 z p>5s    
patriae1 br+ a civil action on behalf ( 
! resid5ts ( ! ,/ate 9 an appropriate   
di/rict c\rt ( ! ,unit$ ,/ates to obta9 
appropriate relief1 includ+ monet>y     
damages4  7#d7 ,injunctive & equitable  
relief ,9 any action describ$ 9 p>agraph
 7#a71 7#b71 or 7#c71 ! applicable c\rt1
 on a f9d+ t a p]son is 9 violation (   
subsection 7a71 %all issue an ord]      
requir+ su* p]son-- 7,a7 to cease &     
desi/ f su* violation1 &1 if applicable1
 dive/ an entity ( su* p]son 9          
accordance ) p>agraph 7#a77;,b7 or      
p>agraph 7#b77;,b7 ( su* subsection 7a71
 z applicable2 &  7,b7 to disgorge any  
rev5ue receiv$ f an entity subject to   
dive/m5t 9 accordance ) su* subsection  
7a7 = ! p]iod ( su* violation4  7#e7    
,o!r relief ,9 addition to any relief   
obta9$ "u p>agraph 7#a71 7#b71 7#c71 or 

7#d71 ! c\rt may grant any o!r equitable
 relief necess>y to r$ress & prev5t     
recurr5ce ( ! violation4  7#f7 ,"r to   
jury trial ,ei!r p>ty1 ^u reque/1 %all h
 ! "r to a jury trial4  7#g7 ,deposit   
,any rev5ue disgorg$ pursuant to an     
action "u p>agraph 7#a7 %all be deposit$
 9 a fund creat$ by ! ,f$]al ,trade     
,commission & di/ribut$ by ! ,f$]al     
,trade ,commission to be put to use 9 ! 
int]e/ ( s]v+ ! heal? c>e ne$s ( ! h>m$ 
community1 includ+ consum]s ov]*>g$ =   
m$ical s]vices at v]tically integrat$   
heal? c>e conglom]ates4  7d7 ,,ftc &    
,,doj review  7#a7 ,report+ requir$ ,any
 dive/m5t ( an entity requir$ "u        
subsection 7a7 %all be report$ to !     
,f$]al ,trade ,commission & ! ,assi/ant 
,attorney ,g5]al 9 *>ge ( ! ,antitru/   
,division ( ! ,dep>tm5t ( ,ju/ice "u    
section #g;,a ( ! ,clayton ,act 7#ae    
,u4,s4,c4 #ah;a7 )\t respect to !       
?re%olds "u subsection 7a77#b7 ( t      
section4  7#b7 ,toll+ ( dive/m5t p]iod  
dur+ review ,! dive/m5t p]iod "u        

subsection 7a7 %all be toll$ dur+ !     
p5d5cy ( any wait+ p]iod requir$ "u     
section #g;,a ( ! ,clayton ,act 7#ae    
,u4,s4,c4 #ah;a74  7#c7 ,review ( effect
 ( dive/iture ,) respect to ea*         
dive/iture und]tak5 pursuant to         
subsection 7a71 9 addition to any       
applicable review "u section #g;,a ( !  
,clayton ,act 7#ae ,u4,s4,c4 #ah;a71 !  
,f$]al ,trade ,commission & ! ,assi/ant 
,attorney ,g5]al 9 *>ge ( ! ,antitru/   
,division ( ! ,dep>tm5t ( ,ju/ice %all  
review ! effect on competition1 f9ancial
 viability1 & ! public int]e/-- 7,a7 ( !
 dive/iture2 &  7,b7 ( ! subsequ5t      
acquisition ( ! dive/$ entity by !      
acquir+ p]son4  7#d7 ,block+ ( actions  
,! ,f$]al ,trade ,commission & !        
,assi/ant ,attorney ,g5]al 9 *>ge ( !   
,antitru/ ,division ( ! ,dep>tm5t (     
,ju/ice1 jo9tly or sep>ately1 may br+ a 
civil action 9 any c\rt ( compet5t      
jurisdiction to block any action t w\ld 
h>m competition to ! detrim5t ( ! public
 int]e/ ) respect to ! conflicts (      

int]e/ describ$ 9 subsection 7a74  7e7  
,rulemak+ au?ority ,! ,f$]al ,trade     
,commission %all promulgate rules to    
c>ry out ?is section4 ,su* rules %all n 
dim9i% any obligation "u ?is section4   
7f7 ,reports requir$ ,! ,*air ( ! ,f$]al
 ,trade ,commission & ! ,assi/ant       
,attorney ,g5]al 9 *>ge ( ! ,antitru/   
,division ( ! ,dep>tm5t ( ,ju/ice %all  
submit to ! appropriate congressional   
committees qu>t]ly reports on compliance
 ) ?is ,act1 includ+ ! /atus ( any      
dive/itures requir$ "u ?is ,act4  7g7   
,rule ( con/ruction ,no?+ 9 ?is section 
%all be con/ru$ to limit ! au?ority ( ! 
,f$]al ,trade ,commission1 ! ,inspector 
,g5]al ( ! ,dep>tm5t ( ,ju/ice1 !       
,dep>tm5t ( ,heal? & ,human ,s]vices1 or
 ! attorney g5]al ( a ,/ate "u any o!r  
provision ( law4  7h7 ,sev]ability ,if  
any provision ( ?is ,act or !           
application !re( to any p]son or        
circum/ance is held invalid1 ! rema9d] (
 ?is ,act1 or ! application ( t         
provision to p]sons or circum/ances o!r 

?an ^? z to :i* x is held invalid1 %all 
n be affect$ !reby4  7i7 ,def9itions ,9 
?is section3 7#a7 ,drug2 device ,! t]ms 
drug & device h ! mean+s giv5 ^? t]ms1  
respectively1 9 section #bja ( ! ,f$]al 
,food1 ,drug1 & ,cosmetic ,act 7#ba     
,u4,s4,c4 #cba74  7#b7 ,heal? plan ,!   
t]m heal? plan means any public or      
private heal? insurance plan4  7#c7     
,managem5t s]vices organization ,! t]m  
managem5t s]vices organization means an 
entity t has ent]$ into an agreem5t ) a 
provid] to furni% s]vices to su*        
provid]1 includ+ s]vices relat+ to      
payroll1 human res\rces1 employm5t      
scre5+1 pay] contract+1 bill+ &         
collection1 cod+1 in=mation te*nology   
s]vices1 pati5t s*$ul+1 prop]ty or      
equipm5t leas+1 & adm9i/rative or       
bus9ess s]vices t d n con/itute !       
practice ( m$ic9e4  7#d7 ,p]son ,! t]m  
p]son has ! mean+ giv5 ! t]m 9 section  
#h ( ! ,%]man ,act 7#ae ,u4,s4,c4 #g74  
7#e7 ,ph>macy b5efit manag] ,! t]m      
ph>macy b5efit manag] means any p]son1  

bus9ess1 or o!r entity1 su* z a         
?ird-p>ty adm9i/rator1 reg>dless ( :e!r 
su* p]son1 bus9ess1 or entity id5tifies 
itself z a ph>macy b5efit manag]1 t1    
ei!r directly or indirectly ?r\gh an    
int]m$i>y 7includ+ an affiliate1        
subsidi>y1 or ag5t7 or an arrangem5t ) a
 ?ird p>ty-- 7,a7 acts z a negotiator ( 
prices1 rebates1 fees1 or disc\nts =    
prescription drugs on behalf ( a heal?  
plan or heal? plan sponsor2  7,b7       
contracts ) ph>macies to create ph>macy 
networks & designs & manages su*        
networks2 or  7,c7 manages or adm9i/]s !
 prescription drug b5efits provid$ by a 
heal? plan1 includ+ ! process+ & paym5t 
( claims = prescription drugs1 arrang+  
alt]native access to or fund+ =         
prescription drugs1 ! p]=mance (        
utilization managem5t s]vices1 includ+  
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]$ prescription drugs1 or ! 
provision ( relat$ s]vices4  7#f7       
,prescription drug ,! t]m prescription  
drug means a drug approv$ "u section    
#eje ( ! ,f$]al ,food1 ,drug1 &         
,cosmetic ,act 7#ba ,u4,s4,c4 #cee7 t is
 subject to section #ejc7;b77#a7 ( su*  
,act 7#ba ,u4,s4,c4 #cec7;b77#a774  7#g7
 ,prescription drug or m$ical device    
:olesal] ,! t]m prescription drug or    
m$ical device :olesal]-- 7,a7 means a   
p]son engag$ 9 :olesale di/ribution ( a 
prescription drug or a device2 &  7,b7  
includes a p>5t 7direct or indirect7 (1 
a subsidi>y 7direct or indirect1 &      
p>tial or complete7 (1 & any entity "u !
 common control or own]%ip ( a p]son    
describ$ 9 subp>agraph 7,a74  7#h7      
,provid] ,! t]m provid] means a         
practition] or entity ! ,national       
,provid] ,in/itute regi/ration ( :i* has
 #a or m taxonomy codes "u ! ,national  
,uni=m ,claim ,committee 7or subsequ5t  
organization71 includ+ any 9-pati5t or  
outpati5t ph>macy1 physician practice1  

ambulatory surg]y c5t]1 urg5t c>e c5t]1 
po/-acute c>e facility1 home-heal?      
provid]1 or hospital4  7#i7 ,:olesale   
di/ribution ,! t]m :olesale             
di/ribution-- 7,a7 means a p]son engag$ 
9 ! sale1 pur*ase1 trade1 deliv]y1 h&l+1
 /orage or receipt ( a drug or device by
 a p]son o!r ?an ! consum] or pati5t2 & 
7,b7 does n include-- 7i7 disp5s+ ( a   
drug or device to a consum] or pati5t by
 a p]son hav+ a valid lic5se "u ,/ate   
law to d s2  7ii7 pur*ase1 h&l+1 /orage1
 receipt1 or o!r acquisition ( a drug or
 device by a p]son hav+ a valid lic5se  
"u ,/ate law to disp5se or adm9i/] drugs
 or devices or1 a hospital1 ph>macy1 or 
o!r heal? c>e entity1 = use by su*      
p]son1 hospital1 ph>macy1 or o!r heal?  
c>e entity2  7iii7 sale1 pur*ase1 trade1
 deliv]y1 h&l+1 /orage1 or receipt ( a  
drug or device by a p]son hold+ an      
application approv$ "u section #eje or  
#eae ( ! ,f$]al ,food1 ,drug1 &         
,cosmetic ,act 7#ba ,u4,s4,c4 #cee1     
#cfj;e7 or section #cea ( ! ,public     

,heal? ,s]vice ,act 7#db ,u4,s4,c4 #bfb7
 = su* drug or device1 a co-lic5s$ p>tn]
 ( any p]son describ$ 9 ?is clause1 or  
an affiliate ( any p]son describ$ 9 ?is 
clause2  7iv7 possession by1 receipt by1
 or transf] to a--  7,i7 ?ird-p>ty      
logi/ics provid] t provides or          
coord9ates w>eh\s+ or o!r logi/ics      
s]vices 9 int]/ate comm]ce2 or  7,,ii7  
repackag] :o owns or op]ates an         
e/abli%m5t t repacks & relabels drugs or
 devices = fur!r sale or di/ribution1   
provid$ t su* ?ird-p>ty logi/ics provid]
 or repackag] does n take own]%ip ( !   
drug or device2  7v7 possession by1     
receipt by1 or transf] to a common c>ri]
 t transports a drug or device1 provid$ 
t ! common c>ri] does n take own]%ip ( !
 drug2  7vi7 intracompany transf] ( any 
drug or device by an entity describ$ 9  
clause 7i71 7ii71 or 7iii71 includ+     
transf]s betwe5 affiliates !re(1 or     
w>eh\s+ by su* p]son incid5tal to su*   
intracompany transf]2 or  7vii7 returns 
or rev]se di/ribution by any p]son      

describ$ 9 clause 7i71 7ii71 7iii71     
7iv71 or 7v74