---
kind: "section"
citation: "42 U.S.C. § 1320b–23"
title: "42"
title_heading: "The Public Health and Welfare"
number: "1320b–23"
heading: "Pharmacy benefit managers transparency requirements"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/1320b-23"
units:
  - "Chapter 7 — Social Security"
  - "Subchapter XI — General Provisions, Peer Review, and Administrative Simplification"
  - "Part A — General Provisions"
---

# §1320b–23. Pharmacy benefit managers transparency requirements

- (a) **Provision of information—** A health benefits plan or any entity that provides pharmacy benefits management services on behalf of a health benefits plan (in this section referred to as a “PBM”) that manages prescription [drug](/usc/42/11851.md?p=4) coverage under a contract with—
  - (1) a [PDP sponsor](/usc/42/1395w–151.md?p=a-13) of a [prescription drug plan](/usc/42/1395w–151.md?p=a-14) or an MA organization offering an [MA–PD plan](/usc/42/1395w–151.md?p=a-9) under part D of subchapter XVIII; or
  - (2) a qualified health benefits plan offered through an exchange established by a [State](/usc/42/619.md?p=5) under [section 18031 of this title](/usc/42/18031.md),

  shall provide the information described in [subsection (b)](#b) to the [Secretary](/usc/42/1301.md?p=a-6) and, in the case of a PBM, to the plan with which the PBM is under contract with, at such times, and in such form and manner, as the [Secretary](/usc/42/1301.md?p=a-6) shall specify.

- (b) **Information described—** The information described in this subsection is the following with respect to services provided by a health benefits plan or PBM for a contract year:
  - (1) The percentage of all prescriptions that were provided through retail pharmacies compared to mail order pharmacies, and the percentage of prescriptions for which a generic [drug](/usc/42/11851.md?p=4) was available and dispensed (generic dispensing rate), by pharmacy type (which [includes](/usc/42/1301.md?p=b) an independent pharmacy, chain pharmacy, supermarket pharmacy, or mass merchandiser pharmacy that is licensed as a pharmacy by the [State](/usc/42/619.md?p=5) and that dispenses medication to the general public), that is paid by the health benefits plan or PBM under the contract.
  - (2) The aggregate amount, and the type of rebates, discounts, or price concessions (excluding bona fide service fees, which include but are not limited to distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative services agreements and patient care programs (such as medication compliance programs and patient education programs)) that the PBM negotiates that are attributable to patient utilization under the plan, and the aggregate amount of the rebates, discounts, or price concessions that are passed through to the plan sponsor, and the total number of prescriptions that were dispensed.
  - (3) The aggregate amount of the difference between the amount the health benefits plan pays the PBM and the amount that the PBM pays retail pharmacies, and mail order pharmacies, and the total number of prescriptions that were dispensed.
- (c) **Confidentiality—** Information disclosed by a health benefits plan or PBM under this section is confidential and shall not be disclosed by the [Secretary](/usc/42/1301.md?p=a-6) or by a plan receiving the information, except that the [Secretary](/usc/42/1301.md?p=a-6) may disclose the information in a form which does not disclose the identity of a specific PBM, plan, or prices charged for [drugs](/usc/42/11851.md?p=4), for the following purposes:
  - (1) As the [Secretary](/usc/42/1301.md?p=a-6) determines to be necessary to carry out this section or part D of subchapter XVIII.
  - (2) To permit the Comptroller General to review the information provided.
  - (3) To permit the [Director](/usc/42/11851.md?p=5) of the Congressional Budget Office to review the information provided.
  - (4) To [States](/usc/42/619.md?p=5) to carry out [section 18031 of this title](/usc/42/18031.md).
- (d) **Penalties—** The provisions of subsection (b)(3)(C) of [section 1396r–8 of this title](/usc/42/1396r–8.md) shall apply to a health benefits plan or PBM that fails to provide information required under [subsection (a)](#a) on a timely basis or that knowingly provides false information in the same manner as such provisions apply to a manufacturer with an agreement under that section.

## Source credit

(Aug. 14, 1935, ch. 531, title XI, § 1150A, as added Pub. L. 111–148, title VI, § 6005, Mar. 23, 2010, 124 Stat. 698.)

## Notes

### Editorial Notes

### Prior Provisions

A prior section 1320b–23 of this title, act Aug. 14, 1935, ch. 531, title XI, § 1150A, as added Pub. L. 106–553, § 1(a)(2) [title VI, § 635(c)(1)], Dec. 21, 2000, 114 Stat. 2762, 2762A–115, which related to prohibition of certain misuses of social security numbers, was repealed by Pub. L. 106–554, § 1(a)(4) [div. A, § 213(a)(6), (b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–180, effective as if included in Pub. L. 106–553 on Dec. 21, 2000.