; and (ii) be subject to punitive remedies for breach of contract for failure to comply with the requirements applicable under this paragraph. (2) Certification of compliance Each PDP sponsor shall furnish to the Secretary (in a time and manner specified by the Secretary) an annual certification of compliance with this subsection, as well as such information as the Secretary determines necessary to carry out this subsection. (3) Definitions For purposes of this subsection: (A) Affiliate The term affiliate means any entity that is owned by, controlled by, or related under a common ownership structure with a pharmacy benefit manager (including an entity owned or controlled by the PDP sponsor) or that acts as a contractor or agent to such pharmacy benefit manager, insofar as such contractor or agent performs any of the functions described under subparagraph (B). (B) Pharmacy benefit manager The term pharmacy benefit manager means any person or entity that, either directly or through an intermediary, acts as a price negotiator or group purchaser on behalf of a PDP sponsor or prescription drug plan, or manages the prescription drug benefits provided by such sponsor or plan, including the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to the prescription drug benefit, contracting with network pharmacies, controlling the cost of covered part D drugs, or the provision of services related thereto. Such term includes any person or entity that carries out one or more of the activities described in the preceding sentence, irrespective of whether such person or entity calls itself a pharmacy benefit manager . . (2) MA–PD plans Section 1857(f)(3) of the Social Security Act ( 42 U.S.C. 1395w–27(f)(3) ) is amended by adding at the end the following new subparagraph: (F) Pharmacy benefit manager reporting requirements For plan years beginning on or after January 1, 2026,