Bipartisan Senate Finance Committee leaders, Chairman Mike Crapo and Ranking Member Ron Wyden introduced the PBM Price Transparency and Accountability Act (the “Act”) in a major effort to rein in murky and anticompetitive practices utilized by pharmacy benefit managers (PBMs) in Medicare and Medicaid that have long frustrated independent and community pharmacies. If enacted, the Act would add clarity, oversight, and accountability to a segment of the healthcare industry that has historically operated with limited transparency and a complex patchwork of state regulation.
Key Provisions of the Act
While this Act is detailed, technical, and complex, several provisions stand out as particularly consequential for pharmacies:
- Delinking PBM Compensation from Rebates. If enacted, the Act would prohibit PBM compensation tied directly to manufacturer rebates, which aims to reduce incentives to favor higher-priced drugs with larger rebate pools. Under many current contracts, PBMs receive a portion of rebates for steering plans toward drugs with higher list prices and larger rebate pools. This structure creates incentives that drive up overall drug costs while offering little benefit to patients or pharmacies.
- Enhanced Reporting Requirements and Audit Rights. The Act would require PBMs to provide more detailed reporting to Medicare Part D plan sponsors and the Department of Health and Human Services (HHS). Furthermore, plan sponsors gain stronger audit rights to police contractual compliance. These disclosures are designed to give fiduciaries a clearer line of sight into fees, price concessions, formulary placement rationales, and the net flows associated with manufacturer payments—areas that have historically been obscured behind confidentiality clauses and aggregator structures.
- Strengthening “Any Willing Pharmacy” Protections. The Act would reinforce requirements for plan sponsors to include pharmacies that meet standard contract terms into their networks. Supporting the protections of “Any Willing Pharmacy” laws will help protect rural and independent pharmacies from exclusion from PBM networks for arbitrary or discriminatory reasons.
- Medicaid Pass-Through and NADAC Participation. Retail pharmacies would participate in the National Average Drug Acquisition Cost (NADAC) survey to help states set accurate acquisition-cost-based rates. The Act would also mandate pass-through payment to pharmacies in Medicaid, eliminating abusive spread pricing that has led to substantial overcharges and enforcement actions across multiple states. This change would clarify cost flows that are often opaque and intentionally designed to benefit PBMs to the detriment of pharmacies.
Collectively, these provisions aim to reduce obscure financial flows, better align PBM incentives with patients and pharmacies, and address gaps that have historically advantaged PBMs over independent pharmacy sustainability.
Why This Matters Now
PBMs sit at the center of the drug supply chain, negotiating with manufacturers and insurers while managing pharmacy networks and formularies. Stakeholders—including pharmacies, employers, and patient advocates—have increasingly scrutinized pricing incentives, vertical integration, and the impacts on reimbursement and network access for independent pharmacies. For retailers, these dynamics translate into lower reimbursements relative to acquisition costs, unpredictable retrospective fees, and steering that can shift patients to PBM-affiliated retail pharmacies or mail‑order pharmacies. The dominance of PBMs has attracted scrutiny, not just from pharmacies, but also from employers, regulators, and patient advocacy groups.
Who’s Behind the Act?
The Act was introduced by Senator Mike Crapo (R‑Idaho) and Senator Ron Wyden (D‑Oregon), with a bipartisan slate of cosponsors that includes Senators John Barrasso (R‑Wyoming), Michael Bennet (D‑Colorado), Marsha Blackburn (R‑Tennessee), Catherine Cortez Masto (D‑Nevada), Bill Cassidy (R‑Louisiana), Maggie Hassan (D‑New Hampshire), Chuck Grassley (R‑Iowa), Mark Warner (D‑Virginia), and Raphael Warnock (D‑Georgia), among others. The breadth of sponsorship suggests cross‑ideological and cross‑regional support for federal PBM reforms—a trend observable through the widespread acceptance of progressive PBM regulation in both blue and red states.
Federal Action Amid Robust State Regulation
While federal PBM reform has been elusive, states have been active in regulating PBMs. According to the National Academy for State Health Policy, all 50 states have passed at least some form of PBM legislation, though the scope and strength of these laws vary significantly.
Some states, like Arkansas and California, have enacted aggressive reforms—including Arkansas’s ban on PBM ownership of pharmacies and California’s expansive PBM regulatory framework under Senate Bill 41. Others have focused on licensure, reporting requirements, prohibitions on spread pricing, or protections for pharmacy reimbursement.
These state laws have given pharmacy owners important tools, but their effectiveness can be blunted by federal law, particularly ERISA preemption, which has limited states’ ability to regulate PBM practices tied to employer-sponsored group health plans.
As a result, many pharmacy owners have viewed federal action as a necessary complement to state efforts—one that could unify regulatory expectations for all stakeholders.
The Act’s bipartisan support indicates an appetite for structural PBM reforms. As with any significant health policy legislation, its path would typically include committee consideration, potential amendments, scoring, and floor time, alongside stakeholder engagement. And while outcomes are always uncertain, the alignment between federal attention, bipartisan support, and widespread adoption of similar restraints at the state level suggest that the political resolve to pass this federal legislation may finally exist.
What Pharmacy Owners Should Do Next
For independent pharmacy owners, the introduction of the PBM Price Transparency and Accountability Act is a call to action. All pharmacies should be following this legislation, petitioning their federal representatives to support this bill, and proactively engaging with the Act’s provisions to be best situated to benefit if enacted. Steps pharmacies can take now include:
- Engage with your members of Congress to express support for transparency, fair reimbursement, and accountability.
- Review your PBM contracts in light of potential federal changes; provisions tied to rebates, audit rights, and reimbursement practices may be scrutinized or redefined under emerging law.
- Monitor state and federal developments to align compliance, reimbursement planning, and strategy.
For community pharmacies operating on thin margins amid unpredictable PBM practices, this Act offers a potential path toward a more transparent and sustainable future.
How Frier Levitt Can Help
Frier Levitt is uniquely positioned to counsel pharmacies seeking to prepare for the enactment of this Act, advise on the interplay between federal law and state-specific regulations, and develop strategies to ensure pharmacies are optimally positioned to combat any unjust PBM conduct.
Frier Levitt is actively monitoring this Act for developments and will be happy to discuss strategic planning with any interested pharmacies and providers.
Frier Levitt provides strategic, industry-focused legal counsel tailored to your needs. Contact our team today to learn how we can help you.
