Pharmacies, Supply Chain Entities, and Plan Sponsors Can Shape How PBMs Are Regulated Under Part D Beginning in 2028: Comments Due July 18, 2026
The Centers for Medicare and Medicaid Services (CMS) has issued a Request for Information (RFI) that will shape how pharmacy benefit managers (PBMs) and their vertically integrated affiliates are regulated under Part D beginning in 2028. Comments are due July 18, 2026.
PBMs and their trade associations will submit detailed comments designed to secure the narrowest possible affiliate definitions and the loosest possible compensation standards. Pharmacy Services Administrative Organizations (PSAOs), pharmacies, specialty pharmacies, long-term care pharmacies, hospital pharmacies, wholesalers, and group purchasing organizations (GPOs) that do not respond risk having these rules shaped without their input.
What Is at Stake
Section 6224 of the Consolidated Appropriations Act, 2026 (CAA, 2026), restricts PBMs and their affiliates to receiving only “bona fide service fees” (BFSFs) in connection with covered Part D drugs beginning in 2028.
A BFSF must:
- reflect fair market value for an actual service performed;
- be a flat dollar amount; and
- not be tied to drug price, rebate amounts, formulary placement, or referral volume.
PBMs must also file annual data reports covering drug costs, enrollee out-of-pocket spending, direct and indirect remuneration (DIR), pharmacy reimbursement, and retained PBM revenue. CMS must define the key terms that determine how far these requirements reach.
The Three Definitions PBMs Will Fight to Control
“Affiliate” to Shield Vertical Integration
The statute defines “affiliate” broadly to reach any entity in an ownership or control relationship with a PBM, as well as any entity performing PBM functions contractually. PBMs will likely push for a narrow reading that excludes their owned mail-order and specialty pharmacies, rebate aggregators, and data subsidiaries from the BFSF rules, effectively preserving their ability to route revenue through affiliated entities outside the statute’s reach. Pharmacies and supply chain participants that compete against PBM-owned operations have a direct stake in advocating for a definition that matches the statute’s plain text.
“Fair Market Value” to Preserve Pricing Opacity
PBMs will likely advocate for a self-referential fair market value standard that allows intra-enterprise pricing to serve as its own benchmark. A toothless standard would permit PBMs to charge plan sponsors whatever fee a compliant sponsor will accept and call it fair market value. CMS needs concrete examples of PBM fee arrangements that would not survive arm’s-length scrutiny. Real-world examples and data illustrating where PBM compensation practices warrant greater regulatory oversight can help CMS develop durable and effective reforms.
“Bona Fide Service Fee” to Recharacterize Existing Arrangements
PBMs will likely argue that their existing spread pricing arrangements, administrative fees, and utilization-contingent payments can be recast as flat fees for discrete services. The statute’s requirement that a qualifying fee be for a service the paying entity would otherwise perform or contract for independently is a meaningful constraint, but only if CMS enforces it. Pharmacies and plan sponsors should provide CMS with specific examples of PBM fees that do not correspond to identifiable, arm’s-length services.
Why the Comment Record Matters
The administrative record built during this RFI and any subsequent rulemaking directly constrains what the final rule can say and provides the evidentiary foundation if rules are challenged in court.
An agency that receives detailed, data-supported comments from PBMs and thin responses from pharmacies and supply chain participants will write rules that reflect what it heard. Participating now is also essential for meaningful judicial review later.
How Frier Levitt Can Help
Frier Levitt has represented pharmacies and supply chain entities in CMS comment proceedings and regulatory advocacy across the full range of Part D and PBM-related rulemaking. We understand PBM contracting structures and compensation arrangements because we litigate against them.
We can help your organization:
- Identify which RFI questions most directly implicate your payment arrangements.
- Document PBM compensation practices CMS needs to hear about from the pharmacy side.
- Draft legally rigorous comments advocating for definitions that reflect the statute’s text and purpose.
- Coordinate with other affected stakeholders where a joint submission would strengthen your position.
The July 18, 2026, deadline is unlikely to move, and building an effective submission takes time. If your organization’s payment arrangements could be affected by how CMS defines “affiliate,” “fair market value,” or “bona fide service fee” under Section 6224, contact Frier Levitt today.
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