DRUG Act

This bill, the Delinking Revenue from Unfair Gouging Act or DRUG Act, aims to improve services provided by pharmacy benefit managers (PBMs) by prohibiting them from receiving remuneration from entities for prescription drug benefit services, with a narrow exception for flat-dollar, bona fide service fees, and establishes enforcement mechanisms including disgorgement and penalties.

Sec. 2, Improving pharmacy benefit manager services: The bill amends the Public Health Service Act, ERISA, and the Internal Revenue Code to add nearly identical provisions. Starting January 1, 2027, a PBM cannot receive any remuneration from an entity for services related to prescription drug benefits under a group health plan or health insurance coverage, except for a bona fide service fee that is a flat dollar amount and not based on drug prices, discounts, rebates, or other specified amounts. A bona fide service fee is defined as fair market value for an itemized service actually performed that the entity would otherwise do itself, not passed on to a client. A PBM is defined broadly as any entity that negotiates drug prices or manages prescription drug benefits, including creating formularies, processing claims, and contracting with pharmacies.

Enforcement: The Secretaries of Health and Human Services, Labor, and Treasury enforce the provisions. Violating PBMs must disgorge any payments received in violation to the plan or issuer. PBMs face a civil penalty of $10,000 per day for each day of violation. The Secretaries implement the section through interim final regulations. The bill clarifies that it does not prohibit payments for drug ingredient costs or pharmacy dispensing fees, nor does it prohibit rebates or discounts from being fully passed through to lower net drug costs.