text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Generic Drug Pricing Fairness Act''.
  
  SEC. 2. PHARMACY BENEFITS MANAGER STANDARDS UNDER THE MEDICARE PROGRAM.
  
      (a) In General.--Section 1860D-12(b) of the Social Security Act (42 
  U.S.C. 1395w-112(b)) is amended by adding at the end the following new 
  paragraph:
              ``(7) Pharmacy benefits manager transparency 
          requirements.--Each contract entered into with a PDP sponsor 
          under this part with respect to a prescription drug plan 
          offered by such sponsor shall provide that the PDP may not 
          enter into a contract with any pharmacy benefits manager 
          (referred to in this paragraph as a `PBM') to manage the 
          prescription drug coverage provided under such plan, or to 
          control the costs of the prescription drug coverage under such 
          plan, unless the PBM adheres to the following criteria when 
          handling personally identifiable utilization and claims data or 
          other sensitive patient data:
                      ``(A) The PBM may not transmit any personally 
                  identifiable utilization or claims data, with respect 
                  to a plan enrollee, to a pharmacy owned by a PBM if the 
                  plan enrollee has not voluntarily elected in writing or 
                  via secure electronic means to fill that particular 
                  prescription at the PBM-owned pharmacy.
                      ``(B) The PBM may not require that a plan enrollee 
                  use a retail pharmacy, mail order pharmacy, specialty 
                  pharmacy, or other pharmacy entity providing pharmacy 
                  services in which the PBM has an ownership interest or 
                  that has an ownership interest in the PBM or provide an 
                  incentive to a plan enrollee to encourage the enrollee 
                  to use a retail pharmacy, mail order pharmacy, 
                  specialty pharmacy, or other pharmacy entity providing 
                  pharmacy services in which the PBM has an ownership 
                  interest or that has an ownership interest in the PBM, 
                  if the incentive is applicable only to such 
                  pharmacies.''.
      (b) Regular Update of Prescription Drug Pricing Standard.--
  Paragraph (6) of section 1860D-12(b) of the Social Security Act (42 
  U.S.C. 1395w-112(b)) is amended to read as follows:
              ``(6) Regular update of prescription drug pricing 
          standard.--
                      ``(A) In general.--If the PDP sponsor of a 
                  prescription drug plan uses a standard for 
                  reimbursement (as described in subparagraph (B)) of 
                  pharmacies based on the cost of a drug, each contract 
                  entered into with such sponsor under this part with 
                  respect to the plan shall provide that the sponsor 
                  shall--
                              ``(i) update such standard not less 
                          frequently than once every 7 days, beginning 
                          with an initial update on January 1 of each 
                          year, to accurately reflect the market price of 
                          acquiring the drug;
                              ``(ii) disclose to applicable pharmacies 
                          the sources used for making any such update;
                              ``(iii) if the source for such a standard 
                          for reimbursement is not publicly available, 
                          disclose to the applicable pharmacies all 
                          individual drug prices to be so updated in 
                          advance of the use of such prices for the 
                          reimbursement of claims; and
                              ``(iv) establish a process to appeal, 
                          investigate, and resolve disputes regarding 
                          individual drug prices that are less than the 
                          pharmacy acquisition price for such drug.
                      ``(B) Prescription drug pricing standard defined.--
                  For purposes of subparagraph (A), a standard for 
                  reimbursement of a pharmacy is any methodology or 
                  formula for varying the pricing of a drug or drugs 
                  during the term of the pharmacy reimbursement contract 
                  that is based on the cost of the drug involved, 
                  including drug pricing references and amounts that are 
                  based upon average wholesale price, wholesale average 
                  cost, average manufacturer price, average sales price, 
                  maximum allowable cost (MAC), or other costs, whether 
                  publicly available or not.''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to plan years beginning on or after January 1, 2015.
  
  SEC. 3. REGULAR UPDATE OF PRESCRIPTION DRUG PRICING STANDARD UNDER 
                TRICARE RETAIL PHARMACY PROGRAM.
  
      Section 1074g(d) of title 10, United States Code, is amended by 
  adding at the end the following new paragraph:
      ``(3) To the extent practicable, with respect to the TRICARE retail 
  pharmacy program described in subsection (a)(2)(E)(ii), the Secretary 
  shall ensure that a contract entered into with a TRICARE managed care 
  support contractor includes requirements described in section 1860D-
  12(b)(6) of the Social Security Act (42 U.S.C. 1395w-112(b)(6)) to 
  ensure the provision of information regarding the pricing standard for 
  prescription drugs.''.
  
  SEC. 4. PRESCRIPTION DRUG TRANSPARENCY IN THE FEDERAL EMPLOYEE HEALTH 
                BENEFITS PROGRAM.
  
      (a) In General.--Section 8902 of title 5, United States Code, is 
  amended by adding at the end the following new subsections:
      ``(p) A contract may not be made or a plan approved under this 
  chapter under which a carrier has an agreement with a pharmacy benefits 
  manager (in this subsection referred to as a `PBM') to manage 
  prescription drug coverage or to control the costs of the prescription 
  drug coverage unless the carrier and PBM adhere to the following 
  criteria:
              ``(1) The PBM may not transmit any personally identifiable 
          utilization or claims data with respect to an individual 
          enrolled under such contract or plan to a pharmacy owned by the 
          PBM if the individual has not voluntarily elected in writing or 
          via secure electronic means to fill that particular 
          prescription at such a pharmacy.
              ``(2) The PBM may not require that an individual enrolled 
          under such contract or plan use a retail pharmacy, mail order 
          pharmacy, specialty pharmacy, or other pharmacy entity 
          providing pharmacy services in which the PBM has an ownership 
          interest or that has an ownership interest in the PBM or 
          provide an incentive to a plan enrollee to encourage the 
          enrollee to use a retail pharmacy, mail order pharmacy, 
          specialty pharmacy, or other pharmacy entity providing pharmacy 
          services in which the PBM has an ownership interest or that has 
          an ownership interest in the PBM, if the incentive is 
          applicable only to such pharmacies.
      ``(q)(1) If a contract made or plan approved under this chapter 
  provides for a standard for reimbursement (as described in paragraph 
  (2)) with respect to a prescription drug plan, such contract or plan 
  shall provide that the applicable carrier--
              ``(A) update such standard not less frequently than once 
          every 7 days, beginning with an initial update on January 1 of 
          each year, to accurately reflect the market price of acquiring 
          the drug;
              ``(B) disclose to applicable pharmacies the sources used 
          for making any such update;
              ``(C) if the source for such a standard for reimbursement 
          is not publicly available, disclose to the applicable 
          pharmacies all individual drug prices to be so updated in 
          advance of the use of such prices for the reimbursement of 
          claims; and
              ``(D) establish a process to appeal, investigate, and 
          resolve disputes regarding individual drug prices that are less 
          than the pharmacy acquisition price for such drug.
      ``(2) For purposes of paragraph (1), a standard for reimbursement 
  of a pharmacy is any methodology or formula for varying the pricing of 
  a drug or drugs during the term of the pharmacy reimbursement contract 
  that is based on the cost of the drug involved, including drug pricing 
  references and amounts that are based upon average wholesale price, 
  wholesale average cost, average manufacturer price, average sales 
  price, maximum allowable cost, or other costs, whether publicly 
  available or not.''.
      (b) Application.--The amendment made by subsection (a) shall apply 
  to any contract entered into under section 8902 of title 5, United 
  States Code, on or after the date of enactment of this section.
target: Generic Drug Pricing Fairness Act - Amends part D (Voluntary Prescription Drug Benefit Program) of title XVIII (Medicare) of the Social Security Act to require each contract entered into with a prescription drug plan (PDP) sponsor with respect to a PDP the sponsor offers to prohibit the PDP from entering into a contract with any pharmacy benefits manager (PBM) to manage the prescription drug coverage provided under such plan, or to control the costs of the prescription drug coverage under it, unless the PBM adheres to specified criteria when handling personally identifiable utilization and claims data or other sensitive patient data. Revises requirements for contracts with PDP sponsors to require that the PDP sponsor disclose to applicable pharmacies the sources used for making any update of the prescription drug pricing standard, and if the source for such a standard is not publicly available, disclose to such pharmacies all individual drug prices to be so updated in advance of their use for the reimbursement of claims. Requires the PDP sponsor, as well, to establish a process to appeal, investigate, and resolve disputes regarding individual drug prices that are less than the pharmacy acquisition price for a drug.  Directs the Secretary of Defense (DOD), with respect to the TRICARE retail pharmacy program, to ensure that a contract entered into with a TRICARE managed care support contractor includes requirements to ensure the provision of information regarding the pricing standard for prescription drugs. Establishes criteria to which a carrier and a PBM must adhere under a contract or an approved plan under which the carrier has an agreement with the PBM to manage prescription drug coverage or to control the costs of such coverage. Prohibits a PBM under such criteria from: (1) transmitting to a pharmacy owned by the PBM any personally identifiable utilization or claims data relating to an enrolled individual who has not voluntarily elected in writing or via secure electronic means to fill that particular prescription at such a pharmacy; or (2) requiring any enrolled individual to use a retail pharmacy, mail order pharmacy, specialty pharmacy, or other pharmacy entity in which the PBM has an ownership interest, or that has an ownership interest in the PBM, or give an incentive to encourage an enrollee to use the pharmacy if the incentive applies only to those pharmacies. Requires any contract or approved plan providing for a reimbursement standard with respect to a PDP to require the carrier to: (1) update the standard at least once every seven days to reflect the market price of a drug accurately; (2) disclose to pharmacies the sources used for making any such update; (3) make advance disclosure to those pharmacies of all individual drug prices to be updated if the source for a standard is not publicly available; and (4) establish a process to appeal, investigate, and resolve disputes regarding individual drug prices less than the pharmacy acquisition price.
feat_title: Generic Drug Pricing Fairness Act