HR-2450-119
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Education and Workforce, and 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.
Sponsored by Kristen McDonald Rivet (D-MI)
What it does
This bill would require pharmacy benefit managers (PBMs) — companies that negotiate drug prices and rebates between insurers, drug makers, and pharmacies — to give employer health plans and insurers detailed reports on drug costs, rebates, fees, and pharmacy payments at least twice a year. It would also require plans to give participants who request it a summary of this pricing information and impose civil penalties for noncompliance or false reporting, with the requirements phasing in 30 months after enactment.
Who benefits
Employers and insurers sponsoring group health plans, who would gain visibility into PBM pricing and rebate arrangements; health plan participants and beneficiaries who could access aggregate pricing summaries; independent pharmacies competing against PBM-affiliated pharmacies, who may benefit from disclosure of preferential pricing practices; and federal regulators (HHS, Labor, Treasury) who gain oversight tools.
Who is hurt
Pharmacy benefit managers, who would face new compliance costs, reporting burdens, and reduced ability to keep pricing arrangements confidential; PBM-affiliated or mail-order pharmacies, whose competitive pricing advantages could face more scrutiny; drug manufacturers and group purchasing organizations, whose rebate arrangements would become more visible to plan sponsors; and smaller PBMs or plans that may struggle with the administrative cost of new reporting systems.
Supporters argue
Supporters argue that PBMs currently operate with limited transparency, keeping rebate and pricing arrangements confidential even from the employers and insurers who hire them, making it difficult to know whether savings are passed through to patients. They contend that mandatory, standardized reporting on drug costs, rebates, and pharmacy reimbursement — similar to disclosure already required for group health plan cost-sharing under the Consolidated Appropriations Act, 2021 — would let plan sponsors negotiate better deals and identify practices like steering patients to affiliated pharmacies that may raise costs.
Opponents argue
Opponents argue that the extensive, granular reporting requirements — covering individual drug claims, therapeutic classes, formulary rationales, and affiliated pharmacy pricing — would impose substantial compliance costs on PBMs and plans that could ultimately be passed on to employers and patients through higher administrative fees. They contend that delegating significant definitional authority to the Secretary of Health and Human Services, including defining "remuneration" and creating reporting formats without formal notice-and-comment rulemaking in some instances, raises concerns about inadequate public input and inconsistent implementation.
Constitutional context
Congress is regulating pharmacy benefit managers and group health plans under its Commerce Clause and taxing and spending authority, similar to prior ACA-era reporting mandates upheld under that framework. The bill's provisions allowing HHS to specify certain reporting formats through guidance rather than notice-and-comment rulemaking could face scrutiny post-Loper Bright v. Raimondo (2024), since courts now review agency statutory interpretations independently rather than deferring to the agency.
Checks and balances
The bill expands executive branch authority by giving the HHS Secretary rulemaking and enforcement power, including civil monetary penalties, with courts serving as the primary check on agency overreach or procedural shortcuts in rulemaking.
Historical precedent
The Consolidated Appropriations Act, 2021 already established similar drug pricing and rebate transparency reporting requirements for group health plans (the "RxDC" reporting), which this bill's cross-references to section 2799A-10 suggest it builds upon.