What does Preamble of Pharmacy Benefit Manager Transparency Act of 2025 do?

This bill, formally titled 'To prevent unfair and deceptive acts or practices and the dissemination of false information related to pharmacy benefit management services for prescription drugs, and for other purposes,' aims to address practices related to pharmacy benefit management (PBM) services for prescription drugs.

What does SHORT TITLE. of Pharmacy Benefit Manager Transparency Act of 2025 do?

This bill is formally titled the Pharmacy Benefit Manager Transparency Act of 2025.

What does PROHIBITION ON UNFAIR OR DECEPTIVE PRESCRIPTION DRUG PRICING of Pharmacy Benefit Manager Transparency Act of 2025 do?

This section prohibits pharmacy benefit managers (PBMs) and their affiliates from engaging in certain pricing practices related to prescription drugs. It is unlawful for a PBM to charge a health plan a different amount for a drug's ingredient cost or dispensing fee than what they reimburse pharmacies, if the PBM retains the difference. PBMs are restricted from arbitrarily reducing or rescinding reimbursement payments to pharmacies unless specific conditions are met (fraudulent claims, inconsistent payments, or unrendered services). PBMs cannot increase fees or lower reimbursements to pharmacies to offset changes mandated by the Federal Government for health plans funded by the Federal Government. Exceptions to these prohibitions exist if the PBM passes along 100% of price concessions or provides full and complete disclosure of costs, fees, markups, discounts, and remuneration from drug manufacturers. Disclosure requirements include providing information to health plans, payers, and pharmacies regarding drug costs, fees, and manufacturer payments.

What does PROHIBITION ON FALSE INFORMATION. of Pharmacy Benefit Manager Transparency Act of 2025 do?

This section prohibits individuals from reporting false or misleading information related to pharmacy benefit management services to a federal department or agency. To be unlawful, the reported information must be required by law, and the person must have known or reasonably should have known it was false or misleading. The false or misleading information must also affect analysis or information compiled by the federal department or agency for statistical or analytical purposes concerning the pharmacy benefit management market.

What does TRANSPARENCY. of Pharmacy Benefit Manager Transparency Act of 2025 do?

This section mandates that pharmacy benefit managers (PBMs) report specific financial information annually to the Commission and the Secretary of Health and Human Services. The required reports include the difference between PBM payments to health plans and payments to pharmacies, as well as details on fees and clawbacks. PBMs must also explain formulary tier changes that impact consumer costs or pharmacy reimbursements. The Commission is required to submit annual reports to Congress detailing enforcement actions, investigations, complaints, and an anonymized summary of PBM reports. Congress is also directed to receive a report from the Commission addressing formulary design and placement practices of PBMs. The Comptroller General of the United States must submit a report to Congress analyzing PBMs' role in the pharmaceutical supply chain, competition, rebate practices, and related factors. Information provided under this section must adhere to privacy regulations under HIPAA. The Commission is prohibited from disclosing trade secrets or confidential information except when necessary to enforce this Act.

What does WHISTLEBLOWER PROTECTIONS. of Pharmacy Benefit Manager Transparency Act of 2025 do?

This section establishes whistleblower protections for individuals reporting potential violations of the Act. Covered entities include pharmacy benefit managers, health plans, pharmaceutical manufacturers, pharmacies, and their affiliates, subsidiaries, or agents. Adverse actions prohibited include discharge, demotion, suspension, benefit reduction, threats, harassment, and discrimination. Protection extends to individuals assisting others who take lawful actions related to reporting violations. Individuals can seek relief, including temporary relief, reinstatement, back pay (doubled with interest), and compensatory damages, in district court. Predispute arbitration agreements are invalid if they require arbitration of disputes arising under this section. The rights and remedies provided in this section cannot be waived by employment policies or agreements.

What does ENFORCEMENT. of Pharmacy Benefit Manager Transparency Act of 2025 do?

This section outlines enforcement mechanisms for the Act, primarily leveraging the Federal Trade Commission (FTC) Act. Violations of this Act are treated as violations of unfair or deceptive acts or practices under the FTC Act. The Commission is authorized to enforce this Act in the same manner as the FTC Act, with certain exceptions for nonprofit organizations and insurance businesses. A civil penalty of up to $1,000,000 may be imposed for each violation, with courts considering factors like the seriousness of the violation and efforts to remedy harm. State attorneys general can bring civil actions on behalf of state residents if they believe state interests are threatened. State attorneys general must notify the Commission before initiating a civil action, unless it is not feasible. The Commission can intervene in state-led civil actions and appeal decisions. Defendants can raise an affirmative defense arguing that the conduct was reasonably necessary to prevent a violation of law, protect patient safety, or protect patient access.

What does PROTECTION OF PERSONAL HEALTH INFORMATION. of Pharmacy Benefit Manager Transparency Act of 2025 do?

This section concerns the protection of personal health information. Pharmacy benefit managers are restricted from disclosing or reporting information that would identify a patient. Pharmacy benefit managers are also restricted from disclosing or reporting information that would identify a provider who issued a prescription.

What does EFFECT ON STATE LAWS. of Pharmacy Benefit Manager Transparency Act of 2025 do?

This section clarifies that the Act does not intend to override or replace existing state laws. State laws, rules, regulations, and requirements, along with their enforcement, are protected from preemption by this Act.

What does DEFINITIONS. of Pharmacy Benefit Manager Transparency Act of 2025 do?

This section defines key terms used throughout the Act. The term 'Commission' is defined as the Federal Trade Commission. A 'covered individual' includes current or former employees, contractors, or agents of various entities including pharmacy benefit managers and pharmaceutical manufacturers. A 'health plan' encompasses group or individual health insurance plans, including those sponsored or funded by federal or state governments. A 'pharmacy benefit manager' is defined as an entity providing pharmacy benefit management services on behalf of a health plan or payer. Pharmacy benefit management services include negotiating prescription drug terms and conditions and managing prescription drug benefits, which may include formulary management and claims processing. A 'prescription drug' is defined as a drug approved by the FDA, a biological product, or a biosimilar/interchangeable product.

Back to bills

Pharmacy Benefit Manager Transparency Act of 2025

Last updated: 2/11/2025 · Introduced: 2/11/2025

Author: Chuck Grassley (R-IA)

TL;DR (AI)

The bill prohibits pharmacy benefit managers (PBMs) from retaining the difference between drug ingredient costs and pharmacy reimbursements, unless specific disclosures are made or concessions are passed along.
PBMs are restricted from reporting false or misleading information to federal agencies concerning the pharmacy benefit management market.
PBMs must annually report detailed financial information, including payment differences and formulary changes, to the Federal Trade Commission (FTC) and the Secretary of Health and Human Services.
The bill establishes whistleblower protections for individuals reporting potential violations, prohibiting adverse employment actions and allowing for legal remedies.
Violations of the Act are enforced through the FTC Act, potentially resulting in civil penalties of up to $1,000,000 per violation, and state attorneys general can also pursue legal action.

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