PBM Price Transparency and Accountability Act

Summary#

This bill (the PBM Price Transparency and Accountability Act) changes rules for how Medicaid and Medicare pay for drugs. It requires new pharmacy price surveys for Medicaid, bans certain “spread pricing” practices by pharmacy benefit managers (PBMs) in Medicaid contracts, and adds reporting, audit, and transparency rules for PBMs in Medicare Part D. The broad goal is to make drug payments more accurate and more transparent, and to protect pharmacy access for patients.

Key changes:

• Medicaid drug cost surveys: The Health and Human Services (HHS) Secretary must run monthly surveys to set national average drug acquisition cost benchmarks (similar to NADAC). States must require pharmacies to respond. Penalties are allowed for non‑response or false answers.
• Ban on abusive spread pricing in Medicaid: State contracts with PBMs or managed care entities that cover drugs must use a pass‑through pricing model (ingredient cost + dispensing fee) and report detailed drug-level costs. Amounts above what is paid to pharmacies (spread) cannot be claimed for federal matching funds.
• Medicare pharmacy access: Part D plans must allow any pharmacy that meets reasonable contract terms to join networks (any‑willing‑pharmacy). The Secretary must set standards for what “reasonable and relevant” contract terms mean by April 2027. The bill creates a list and reporting for “essential retail pharmacies” (those with no nearby alternatives).
• PBM accountability in Part D: PBMs must enter written agreements with Part D sponsors, limit income to bona fide service fees (with some exceptions), provide annual, machine‑readable reports to sponsors and HHS with detailed drug‑level data, allow audits, and disgorge improper remuneration. New confidentiality rules limit public disclosure of sensitive data.
• Studies and oversight: The bill funds Inspector General studies, a GAO study on price‑related compensation across the supply chain, and MedPAC reports using the new data.

What it means for you#

• Retail and non‑retail pharmacies

  • Must respond to monthly federal surveys (retail starts sooner; non‑retail starts later).
  • Could face civil money penalties for refusing surveys or giving false information (up to $100,000 per violation, subject to HHS determination).
  • May get clearer rules on joining Medicare Part D networks if they meet reasonable contract terms.
  • Some pharmacies will be listed as “essential retail pharmacies,” which the government will publish.

• Pharmacy benefit managers (PBMs)

  • Must use pass‑through pricing in Medicaid contracts (pay ingredient cost and a dispensing fee and pass them to pharmacies).
  • In Medicare Part D, must sign written agreements with plan sponsors and limit remuneration to bona fide service fees, report detailed drug‑level data annually, allow audits, and disgorge amounts if rules are violated.
  • Must provide written explanations for manufacturer contracts that affect coverage or formulary placement.

• State Medicaid agencies and managed care entities

  • Must include pass‑through pricing and transparency requirements in PBM contracts that cover drugs, for contracts effective 18 months after enactment.
  • Must require pharmacies to respond to HHS surveys.

• Medicare Part D sponsors and MA organizations

  • Must allow any pharmacy meeting the new reasonable and relevant contract standards to participate.
  • Must include new audit and accountability provisions in contracts with PBMs.
  • Must submit lists of affiliated pharmacies and report certain payments and fees to HHS.

• Medicare beneficiaries

  • The bill could increase choice of network pharmacies (any willing pharmacy rule) and produce government reports on pharmacy access and price trends. The bill does not directly set beneficiary prices or cost sharing.

• Federal agencies and oversight bodies

  • HHS, CMS, the Inspector General, GAO, MedPAC, and the Congressional Budget Office will receive new data and have new responsibilities to study and report on pricing and contracts.

Expenses#

Estimated public cost: The bill includes several specific appropriations totaling several hundred million dollars for fiscal year 2026 and ongoing funding.

• $5,000,000 appropriated to the HHS Inspector General for certain Medicaid survey studies (one‑time FY2026, available until expended).
• An increase of $9,000,000 specified annually beginning in FY2026 for the program that supports national acquisition cost benchmarks (amounts remain available until expended).
• $188,000,000 appropriated to the Centers for Medicare & Medicaid Services Program Management Account for FY2026 to carry out the Medicare pharmacy access provisions (available until expended).
• $113,000,000 appropriated to CMS Program Management Account for FY2026 to implement PBM accountability rules (available until expended).
• $20,000,000 appropriated to the HHS Inspector General for FY2026 for PBM‑related work (available until expended).
• $1,000,000 appropriated to MedPAC for FY2026 to support reporting.
• Additional administrative and compliance costs for states, plans, PBMs, and pharmacies are likely but not estimated in the bill text.

If no other fiscal notes are provided: No publicly available information on long‑term cost estimates beyond the appropriations listed.

Proponents' View#

The bill appears intended to address several problems described in the text and title:

• Improve accuracy of pharmacy payment benchmarks by requiring monthly surveys and wider pharmacy participation. This could mean reimbursements reflect actual acquisition costs more closely.
• Prevent PBMs from using opaque “spread pricing” in Medicaid by requiring pass‑through pricing and detailed cost reporting, which could stop states from paying federal matching funds on amounts above pharmacy payments.
• Increase pharmacy access and choice for Medicare beneficiaries by enforcing an any‑willing‑pharmacy rule and creating standards for contract terms between Part D plans and pharmacies.
• Increase PBM transparency and accountability in Part D through annual, machine‑readable reports, audit rights, disgorgement of improper remuneration, and limits on non‑service income.
• Provide oversight and study data (OIG, GAO, MedPAC) to inform future policy and detect unusual pricing or related‑party pricing practices.

Opponents' View#

One concern is that the bill creates new reporting and compliance burdens:

• The monthly Medicaid survey and detailed Part D reporting will require time and systems work by pharmacies, PBMs, and plans. The bill exempts some data collections from the Paperwork Reduction Act, which removes a standard public review step.
• The penalty regime for failing to respond to Medicaid surveys allows high civil money penalties (up to $100,000 per violation). How penalties will be applied across chains or multiple violations is left to HHS discretion.
• Many technical terms and thresholds (for example, “bona fide service fee,” “fair market value,” and specific definitions of non‑retail pharmacy types) are to be set by the Secretary. It is therefore unclear exactly how strict or flexible enforcement and exemptions will be.
• The bill exempts some implementations from the Administrative Procedure Act, which may limit public rulemaking and comment before major changes take effect.
• Confidentiality rules restrict public disclosure of certain PBM data. While intended to protect trade secrets, these limits may still leave open questions about how much useful information will be shared publicly.
• The bill does not provide detailed estimates of the ongoing administrative costs for states, PBMs, plans, and pharmacies beyond the federal appropriations.

What is unclear:

• How HHS will define and apply “reasonable and relevant” contract-term standards for pharmacy participation.
• Exact methods HHS will use to calculate fair market value and bona fide service fees.
• How the new Medicaid pass‑through requirement will interact with existing state payment systems and 340B purchase rules in practice.