Phair Pricing Act of 2019
This bill requires that certain negotiated prices for covered drugs under the Medicare prescription drug benefit be disclosed at the point-of-sale.
Specifically, negotiated prices offered under a prescription drug plan (PDP) must be disclosed at the point-of-sale; the disclosed price must include specified adjustments, payments, and fees that are negotiated with the pharmacy (e.g., dispensing fees) by the PDP sponsor or pharmacy benefit manager.
Additionally, the Centers for Medicare & Medicaid Services must establish certain quality measures for PDP sponsors to use when determining incentive payments and adjustments (e.g., performance payments) to pharmacies.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1034 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 1034
To amend title XVIII of the Social Security Act to require pharmacy-
negotiated price concessions to be included in negotiated prices at the
point-of-sale under part D of the Medicare program, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 7, 2019
Mr. Collins of Georgia (for himself, Mr. Gonzalez of Texas, Mr. David
P. Roe of Tennessee, Mr. Wittman, Mr. Austin Scott of Georgia, Mr.
Westerman, Mr. Griffith, Mr. Hurd of Texas, Mr. Budd, Mr. Crawford, and
Mr. Carter of Georgia) introduced the following bill; which was
referred to the Committee on Energy and Commerce, and in addition to
the Committee on Ways and Means, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to require pharmacy-
negotiated price concessions to be included in negotiated prices at the
point-of-sale under part D of the Medicare program, and for other
purposes.
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 ``Phair Pricing Act of 2019''.
SEC. 2. REQUIRING PHARMACY-NEGOTIATED PRICE CONCESSIONS AND PHARMACY
INCENTIVE PAYMENTS AND ADJUSTMENTS TO BE INCLUDED IN
NEGOTIATED PRICES AT THE POINT-OF-SALE UNDER PART D OF
THE MEDICARE PROGRAM.
Section 1860D-2(d)(1)(B) of the Social Security Act (42 U.S.C.
1395w-102(d)(1)(B)) is amended--
(1) by striking ``prices.--For purposes'' and inserting
``prices.--
``(i) In general.--For purposes''; and
(2) by adding at the end the following new clauses:
``(ii) Prices negotiated with pharmacy at
point-of-sale.--
``(I) In general.--Subject to
subclause (III), for plan years
beginning on or after January 1, 2020,
negotiated prices for covered part D
drugs described in clause (i) provided
under a prescription drug plan,
including all contingent and
noncontingent concessions, adjustments,
payments, and fees (including
dispensing fees) negotiated with the
pharmacy dispensing such drug, shall be
provided at the point-of-sale of such
drug. Such negotiated price shall not
include any incentive payments and
adjustments or any other contingent
concessions, adjustments, payments, or
fees that increase the amount of such
negotiated price.
``(II) Application of pharmacy
incentive payments and adjustments.--
``(aa) In general.--For
plan years beginning on or
after January 1, 2020, a PDP
sponsor--
``(AA) shall apply
a system under which
incentive payments and
adjustments using only
quality measures
established by the
Secretary under item
(bb) are made to a
pharmacy with respect
to payment for covered
part D drugs dispensed
by such pharmacy; and
``(BB) may not
apply any other
incentive payments and
adjustments with
respect to such payment
outside of such system.
Application of such system may
not result in a decrease in
reimbursement to such pharmacy
for such drug after the point-
of-sale of such drug.
``(bb) Standard pharmacy
quality measures.--The
Secretary shall establish
standard quality measures that
may be used in a system
described in item (aa). Such
measures shall be--
``(AA) focused on
improving patient
health outcomes;
``(BB) standardized
across PDP sponsors;
``(CC) pharmacy-
specific in
application;
``(DD) relevant to
the type of pharmacy
concerned (such as
specialty pharmacies),
taking into account the
items and services
furnished by the
pharmacy and the
patient population
served by the pharmacy;
``(EE) applied only
when relevant to the
specific drug (or drug
class of such drug)
being furnished by the
pharmacy or when
relevant to management
of the condition for
which such drug has
been prescribed; and
``(FF) based on
achievable and proven
criteria measuring
pharmacy performance
over which the pharmacy
has meaningful control
and ability to
influence.
In establishing such standards,
the Secretary shall consult
with stakeholders, including
PDP sponsors and MA
organizations, pharmacies
across pharmacy practice types,
pharmacy benefit managers,
patient advocacy organizations,
drug manufacturers, appropriate
standard-setting organizations,
and other entities determined
appropriate by the Secretary.
``(III) No increase in cost
sharing.--Subclause (I) shall not apply
in the case where application of such
subclause would increase the amount
owed by an individual in cost sharing
above the amount such individual would
have owed in cost sharing without
application of such subclause.
``(IV) Discrepancies between
negotiated prices and actual
reimbursement.--In the case that the
Secretary determines that the
negotiated price of a PDP sponsor
applied at the point-of-sale with
respect to a covered part D drug for a
year dispensed by a pharmacy was
greater than the total reimbursement
made to such pharmacy for such drug for
such year, such sponsor shall, not
later than 90 days after receiving
notice of such determination, furnish
to the pharmacy that dispensed such
drug and to the Secretary a written
explanation of why such negotiated
price was greater than such
reimbursement.
``(V) Specialty pharmacy.--For
purposes of carrying out this clause
(including subclause (II)(bb)(DD)), the
Secretary shall, not later than
December 31, 2019, define the term
`specialty pharmacy' in consultation
with relevant stakeholders.
``(VI) Definitions.--In this
clause:
``(aa) Incentive payments
and adjustments.--The term
`incentive payments and
adjustments' means, with
respect to payment to a
pharmacy by a PDP sponsor for a
covered part D drug, any
prospective or retrospective
price concessions, rebates,
discounts, fees, reconciliation
adjustments, bonuses,
performance payments,
incentives, and any other
adjustment to such payment
determined through the use of a
quality measure, regardless of
when such payments and
adjustments are applied. Such
term does not include any
manufacturer rebates or
concessions made with respect
to such drug.
``(bb) Quality measure.--
The term `quality measure'
means performance criteria used
by a PDP sponsor (including an
entity that contracts with such
sponsor, such as a pharmacy
benefit manager) to determine
the amount or applicability of
incentive payments and
adjustments.
``(cc) PDP sponsor.--The
term `PDP sponsor' includes an
MA organization offering an MA-
PD plan under part C and an
entity that contracts with such
sponsor or organization, such
as a pharmacy benefit manager.
``(iii) Reasonable reimbursement
requirement.--In no case may a negotiated price
(as described in clause (ii)(I)) for a covered
part D drug furnished by a pharmacy during a
plan year beginning on or after January 1,
2020, be less than such pharmacy's cost of
purchasing and dispensing such drug and
providing such other services associated with
furnishing such drug as may be specified by the
Secretary.
``(iv) Claim reimbursement disclosure
requirements.--With respect to payment made by
a PDP sponsor to a pharmacy for a covered part
D drug furnished by such pharmacy during a plan
year beginning on or after January 1, 2020,
such sponsor shall promptly furnish all pricing
components including the Network Reimbursement
ID used to price the claim, any fees, pharmacy
price concessions, discounts, incentives or any
other forms of remuneration that affect payment
and pricing of the claim as part of the claim
adjudication response at the point-of-sale. All
aforementioned items, including Network
Reimbursement ID, fees, pharmacy price
concessions, discounts, incentives, or any
other forms of remuneration that affect payment
and pricing of the claim shall each be
identified in a predetermined line item in the
remittance advice that is standard across the
industry. The Part D sponsor shall include
suitable claim-level detail on the electronic
remittance advice that accompanies each
payment. This claim-level detail shall include,
in an industry standardized format, all fields
needed to properly identify the claim,
including the Claim Authorization Number, date
of service, date of payment remittance,
ingredient cost reimbursed, dispensing fee
reimbursed, payment amounts including the
Network ID used to price the claim, the
specific dollar amounts and the appropriate
qualifier codes for each payment adjustment
including fees, pharmacy price concessions, or
incentives.
``(v) Violation process.--A PDP sponsor
shall participate in any process established by
the Secretary for purposes of determining
whether such sponsor has violated a provision
of clauses (ii) through (iv).''.
SEC. 3. PHARMACY BENEFIT MANAGER PROVISION OF INFORMATION.
(a) In General.--Section 1150A(b)(2) of the Social Security Act (42
U.S.C. 1320b-23(b)(2)) is amended by striking ``excluding'' and
inserting ``including''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply with respect to contract years beginning on or after January 1,
2020.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Health.
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