Prescription Drug Transparency and Affordability Act
- Bill Number
- H.R. 2450
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Health
- Status
- Introduced
- Latest Action
- 2025-03-27: 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.
- Last Updated
- 2026-04-03T15:39:40Z
AI-Generated Summary
Prescription Drug Transparency and Affordability Act (H.R. 2450)
Purpose
This legislation aims to increase transparency in how pharmacy benefit managers (PBMs)—companies that handle prescription drug benefits for health plans—operate, including their handling of drug prices, rebates, and fees. By requiring detailed reporting, it seeks to help group health plans (employer-sponsored insurance) better understand and control drug costs, ultimately making prescriptions more affordable for participants (employees and their families).
Key Provisions
- Reporting Requirements for PBMs: Starting 30 months after enactment, PBMs must submit reports to group health plans at least every 6 months (or quarterly if requested by the plan). Reports cover drugs dispensed during the period and must be in plain language and a machine-readable format (easy for computers to process).
- For large plans (those with 100+ employees or participants): Detailed data on individual drugs (e.g., payments to PBMs and pharmacies, differences in compensation, out-of-pocket costs, rebates received by the plan and PBM, dispensing channels like retail or mail-order, and wholesale costs).
- For all plans: Aggregate summaries on total drug spending (gross before rebates vs. net after), rebates and fees, broker payments for PBM referrals, and benefit designs that favor affiliated pharmacies (e.g., mail-order programs).
- Additional details on therapeutic classes (groups of similar drugs), high-spend drugs (top 50 or those over $10,000 in spending), formulary placement (how drugs are categorized for coverage), and copayment assistance from manufacturers.
- Contract Restrictions: Plans and PBMs cannot contract with drug makers, wholesalers, or other "applicable entities" unless those entities agree not to block information needed for reports.
- Participant Access: Plans must provide participants a summary document upon request and specific details on their own claims (e.g., payment differences for a drug).
- Privacy Protections: Reports use only anonymized "summary health information" (no personal details) and follow HIPAA rules (federal privacy laws for health data). Plans must notify participants annually about these requirements.
- Regulations and Enforcement: The Secretary of Health and Human Services (HHS) must create a standard report format and other rules within 18 months. Penalties include up to $10,000 per day for failing to report or disclose info, and $100,000 per false item. Waivers possible for good-faith efforts. Applies to group health plans under the Public Health Service Act, ERISA (law governing employee benefits), and the Internal Revenue Code.
- Special Rules: Limited reports for plans linked to drug companies to avoid anti-competitive issues (e.g., sharing trade secrets). Aligns with existing transparency rules.
Significant Changes to Existing Law
- Adds new sections to three major laws: Public Health Service Act (Section 2799A-11), Employee Retirement Income Security Act (ERISA, Section 726), and Internal Revenue Code (Section 9826), creating uniform PBM oversight not previously required at this level.
- Expands beyond current rules (e.g., PHSA Section 2799A-10 on price transparency) by mandating PBM-specific disclosures like rebate flows and affiliated pharmacy incentives, which were often opaque.
- Introduces opt-in for insured large plans to get full detailed reports, and excludes very small self-insured plans from some enforcement but not core reporting.
- Strengthens enforcement by coordinating penalties across HHS, Department of Labor, and Treasury, with no preemption of state laws.
Potential Impacts
- Government Agencies: HHS, Labor, and Treasury gain more data on drug spending to inform future policies; increased workload for rulemaking and audits, but potential for better oversight of the $500+ billion prescription drug market.
- Citizens: Participants may see lower costs through plans negotiating better PBM deals; easier access to info helps understand coverage, though small plans might face higher administrative burdens passed to premiums.
- International Relations: No direct effects; focuses on U.S. domestic health plans and supply chain entities.
Main Stakeholders Affected
- Group Health Plans and Employers: Must receive and act on reports; large employers (100+ workers) get most details, aiding cost control.
- Health Insurance Issuers: Required to ensure PBM compliance for insured plans; may need to adjust contracts.
- PBMs and Applicable Entities: (e.g., drug manufacturers, wholesalers, rebate aggregators) Face new disclosure mandates and contract limits; could reduce profit from hidden rebates.
- Pharmacies: Independent ones benefit from transparency on affiliated pharmacy favoritism; affiliated pharmacies (e.g., PBM-owned mail-order) must report pricing comparisons.
- Participants and Beneficiaries: Gain access to summaries and claim info, empowering better decisions on drugs and appeals.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces HIPAA without altering it; includes safeguards against anti-competitive disclosure (e.g., limited reports for conflicted entities). No impact on state privacy or civil rights laws. Penalties follow existing civil monetary frameworks (e.g., Social Security Act procedures).
- Constitutional: Neutral; promotes transparency in commercial activities without infringing free speech (allows reasonable restrictions on public sharing) or equal protection.
- Political: Bipartisan support (introduced by Democrats and Republicans) addresses public concerns over drug prices amid rising healthcare costs. Could pressure PBM industry (e.g., CVS Caremark, Express Scripts) to reform practices, influencing broader debates on pharma accountability, but may face opposition over compliance costs estimated in billions annually.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. McDonald Rivet, Kristen [D-MI-8]
Cosponsors (3)
Rep. Carter, Earl L. "Buddy" [R-GA-1], Rep. Menendez, Robert [D-NJ-8], Rep. James, John [R-MI-10]
Recent Actions
- 2025-03-27: 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.
- 2025-03-27: 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.
- 2025-03-27: 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.
- 2025-03-27: Introduced in House
- 2025-03-27: Introduced in House
Bill Versions
- Prescription Drug Transparency and Affordability Act — issued 2025-03-27 — PDF (87 pages)