To ensure integrity in the operation of pharmacy benefit managers.

April 14, 2005

Mr. WEINER (for himself and Mr. MORAN of Kansas) introduced the following bill; which was referred to the Committee on Energy and Commerce

To ensure integrity in the operation of pharmacy benefit managers.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Pharmacy Benefit Manager Transparency Act of 2005'.

SEC. 2. REQUIREMENTS RELATING TO PHARMACY BENEFIT MANAGERS.

(a) Prohibition on Cross Ownership-

(1) IN GENERAL- No pharmaceutical drug manufacturer may have a controlling interest in an entity that is a pharmacy benefit manager.

(2) PENALTY- The Secretary of Health and Human Services may issue such civil penalties for a violation of paragraph (1) as the Secretary of Health and Human Services determines necessary.

(b) Drug Interchange-

(1) PROHIBITIONS-

(A) COST INCREASE- A pharmacy benefit manager shall not make any drug interchange proposal for an individual who is served by such manager where the net cost of the drug to which the prescription would be changed exceeds that of the drug from which the prescription would be changed.

(B) DISCLOSURE TO INDIVIDUAL- A pharmacy benefit manager shall not make any drug interchange for an individual who is served by such manager unless the pharmacy benefit manager discloses to the individual, in a clear and conspicuous manner, the savings to the individual associated with such interchange.

(C) GENERICS- A pharmacy benefit manager shall not make any drug interchange proposal for an individual who is served by such manager if the drug from which the prescription would be changed has generic equivalents and the drug to which the prescription would be changed has no generic equivalents, unless the drug to which the prescription would be changed has a lower net cost to the individual than does each of the generic equivalents of the drug from which the prescription would be changed.

(2) PENALTY- A pharmacy benefit manager that violates subparagraph (A), (B), or (C) of paragraph (1) with respect to an individual and presents a claim for payment to the United States Government as reimbursement for services to such individual, shall be considered in violation of section 3729 of title 31, United States Code.

(c) Disclosure of Compensation From Drug Manufacturers-

(1) QUARTERLY AND ANNUAL DISCLOSURES- At the end of each fiscal year quarter, each pharmacy benefit manager shall disclose--

(A) to the client plans of such manager and to the Antitrust Division of the Department of Justice, all compensation and remuneration that the pharmacy benefit manager received during such fiscal year quarter from a pharmaceutical drug manufacturer, including, regardless of how categorized, market share incentives, commissions, mail service purchase discounts, and administrative or management fees; and

(B) to the client plans of such manager, any fees received for sales of utilization data to a pharmaceutical drug manufacturer.

(2) DISCLOSURE AT CONTRACTING STAGE- Each pharmacy benefit manager shall disclose to each client plan and prospective client plan of such manager, in advance of executing an agreement with such plan, information relating to the pharmacy benefit manager's methodology of soliciting and receiving payments from pharmaceutical drug manufacturers.

(d) Definitions- For purposes of this section:

(1) CLIENT PLAN- The term `client plan' means a pharmaceutical plan in which the entity that offers such plan to its beneficiaries contracts directly with a pharmacy benefit manager to provide or administer such plan.

(2) DRUG INTERCHANGE- The term `drug interchange' means any change from one prescription drug to another prescription drug that is intended to address or treat the same illness or condition.

END