In committee
PBM Reform Act of 2025
This legislation restricts how pharmacy benefit managers (PBMs)—the corporate middlemen that manage prescription drug benefits—make money across Medicare, Medicaid, and private employer plans. In Medicare Part D, PBMs will be barred from keeping drug manufacturer rebates or taking percentage-based fees, restricting their compensation to flat, transparent service fees while passing all savings to health plans. The bill also bans PBMs from profiting off hidden drug markups in Medicaid, requires fair contract terms for independent pharmacies, and mandates regular disclosures to employers and patients detailing true drug costs, fees, and rebates.
People affected—not determinable from the text provided
Fiscal magnitude$336.0Mprovisional · pending reviewDirect appropriations specified in the text for FY 2025 totaling $336,000,000: $188M to CMS (Sec. 2(f)), $113M to CMS (Sec. 3(a)(4)(A)), $20M to HHS OIG (Sec. 3(a)(4)(B)), $1M to MedPAC (Sec. 3(c)(2)), $5M to HHS OIG (Sec. 5(a)(7)(B)), and $9M for Medicaid surveys (Sec. 5(a)(8)(A), with $9M annually thereafter).
Reach82provisional · pending reviewrigor: heuristic llm
What this bill touches.
Government role in coverage+30Pharmaceutical pricing+55Corporate concentration+45
Who it helps · who it burdens.
Who it helps
- PharmaciesGains the right to participate in Medicare Part D networks under reasonable and relevant contract terms, protections against retaliation when reporting contract violations to HHS, and guaranteed full pass-through of ingredient costs and state-level dispensing fees in Medicaid managed care. (Sec. 2(a), 2(c), 6(a))
- Medicare Part D plan sponsorsReceive 100 percent of manufacturer rebates passed through from pharmacy benefit managers, obtain the right to select independent auditors for annual compliance audits of PBMs, and receive detailed annual drug pricing and cost reports. (Sec. 3(a))
- Commercial group health plans and employersGain the right to receive semiannual or quarterly reports from pharmacy benefit managers detailing prescription drug spending, retained rebates, broker fees, and pricing differences between affiliated and unaffiliated pharmacies. (Sec. 4(a)-(c))
- Group health plan participants and beneficiariesEnrolled participants and beneficiaries gain the right to request and receive summary documents on drug benefits and claim-specific pricing information showing the difference between plan payments and pharmacy reimbursement. (Sec. 4(a)-(c))
Who it burdens
- Pharmacy benefit managersProhibited from retaining manufacturer rebates or using spread pricing in Medicare Part D and Medicaid, restricted to receiving flat fair-market service fees, required to provide comprehensive pricing and broker compensation disclosures, and made subject to annual audits, clawbacks, and civil penalties. (Sec. 2(d), 3(a), 4(a)-(c), 6(a))
- Medicare Part D and Medicare Advantage plan sponsorsMust allow any willing pharmacy to join Part D networks under reasonable and relevant terms, submit annual lists of pharmacy affiliates and incentive fees to HHS, and face civil monetary penalties and intermediate sanctions for noncompliance with contract standards. (Sec. 2(a)-(c))
- Commercial group health plans and plan administratorsRequired to provide summary drug benefit disclosures and claim-specific reimbursement data to participants upon request, provide annual written notices, and face civil monetary penalties of $10,000 per day for reporting failures. (Sec. 4(a)-(c))
- Retail and non-retail pharmacies participating in MedicaidRetail community pharmacies, mail-order pharmacies, and specialty pharmacies dispensing drugs under Medicaid are mandated to participate in federal drug acquisition cost surveys under penalty of civil fines up to $100,000 per violation. (Sec. 5(a))
Who backs it
- Centers for Medicare & Medicaid ServicesAppropriated $188 million for pharmacy access and contracting oversight under Medicare Part D and $113 million for pharmacy benefit manager oversight in fiscal year 2025. (Sec. 2(f), Sec. 3(a)(4)(A))
- Department of Health and Human Services Office of Inspector GeneralAppropriated $20 million in fiscal year 2025 for pharmacy benefit manager oversight and $5 million for periodic studies on Medicaid drug acquisition cost variations and affiliate transfer pricing. (Sec. 3(a)(4)(B), Sec. 5(a)(7)(B))
- Medicare Payment Advisory CommissionAppropriated $1 million in fiscal year 2025 to study and report to Congress on pharmacy benefit manager contracts and agreements in Medicare Part D and Medicare Advantage. (Sec. 3(c)(2))