HR2450-119

What This Bill Does

The Prescription Drug Transparency and Affordability Act creates parallel oversight rules for PBMs under the Public Health Service Act, ERISA, and the Internal Revenue Code. For plan years beginning 30 months after enactment, entities providing pharmacy benefit management services must report to group health plans, with broader reporting for specified large employers and large plans. Reports include drugs covered, formularies, total gross and net spending, rebates, fees, alternative discounts, remuneration from drug manufacturers and other entities, compensation to brokers and consultants for referrals or retention, network pharmacies, lowest cost per dosage unit and 30- or 90-day supply, net acquisition cost when maximum price discounts apply, participant and beneficiary cost information, mail-order or specialty pharmacy steering tied to PBM affiliates, and summary documents for plans and participants. Reports must contain only summary health information, comply with HIPAA and civil rights privacy laws, preserve federal agency access, allow participant requests for summary and claims-level information, and require rulemaking within 18 months on standard formats and implementation, including limited reports for plans affiliated with drug manufacturers, wholesalers, or other direct supply-chain participants.

Who Benefits and How

Group health plan sponsors benefit from detailed PBM reports on net drug spending, rebates, fees, network prices, and affiliated pharmacy steering. Plan participants and beneficiaries benefit from summary documents and requested claims-level information about prescription drug benefits. Employer benefits managers benefit from visibility into broker, consultant, and PBM compensation arrangements. Federal health, labor, and tax regulators benefit from access to PBM reports and compliance information. Independent pharmacies may benefit if reporting exposes steering toward PBM-affiliated mail, specialty, or retail pharmacies.

Who Bears the Burden and How

Pharmacy benefit managers must generate detailed annual reports, participant summaries, privacy-compliant data, and claims-level information. Health insurance issuers and group health plans must manage report receipt, disclosures, participant notices, and privacy restrictions. PBM-affiliated pharmacy networks face scrutiny of benefit designs that encourage mandatory mail, specialty delivery, auto-refill, or affiliated pharmacy use. Drug supply-chain affiliates must operate under limited-report rules when plan sponsors are affiliated with manufacturers, wholesalers, or other direct participants. HHS, Labor, and Treasury rulemaking staff must issue standard formats and implementation regulations within 18 months.

Key Provisions

• Requires PBMs to report gross and net prescription drug spending, rebates, fees, discounts, remuneration, network costs, and acquisition costs to group health plans.
• Requires summary documents for plans and participants and claims-level information upon participant or beneficiary request.
• Requires reporting on broker and consultant compensation for referral, consideration, or retention of PBM business.
• Requires explanations of benefit designs steering participants to PBM-affiliated mail, specialty, retail, or auto-refill pharmacies.
• Protects HIPAA and civil rights privacy rules while preserving HHS, Labor, and Treasury access to reports and compliance information.
• Requires standard format and implementation rulemaking within 18 months across PHSA, ERISA, and tax-code frameworks.