PBM Reform Act of 2025
The Pharmacy Benefit Manager Reform Act of 2025 (PBM Reform Act) seeks to drastically change how Medicare prescription drug plans (PDPs) and their pharmacy networks operate, with the goal of improving access, price transparency, and accountability. The bill would require PDP sponsors to allow any willing pharmacy that meets standard contract terms to participate in a plan’s network (starting plan years after 2029) and would set up a Secretary-defined process to ensure contract terms are reasonable and relevant. It also creates a new framework to hold pharmacy benefit managers (PBMs) and sponsors more accountable by adding enforcement mechanisms, mandating extensive PBM transparency, and requiring ongoing data reporting about drug costs, rebates, and network dynamics. In addition, the bill designates “essential retail pharmacies” in underserved areas and obligates public reporting on their participation and cost dynamics. The legislation would be funded through an appropriation to CMS for program implementation and oversight. In short, the bill aims to increase pharmacy participation in PDP networks, curb PBM practices that influence pricing and access, and provide regulators with detailed data to monitor costs and access for Medicare beneficiaries.
Key Points
- 1Guaranteed access to networks: For plan years after January 1, 2029, PDP sponsors must permit any willing pharmacy that meets standard contract terms to participate as a network pharmacy, with the term standards defined and updated by the Secretary.
- 2Standards and information gathering: The Secretary must establish standards for reasonable and relevant contract terms by 2028, and issue a request for information by 2027 to gather input on contracting practices, reimbursements, dispensing fees, utilization management, and related issues.
- 3Essential retail pharmacies: The bill creates a category called “essential retail pharmacies,” with criteria based on underserved, rural, suburban, or urban areas lacking other pharmacies within specified distances. It requires CMS to publish a list of such pharmacies and to collect data from PDP sponsors and MA organizations about incentives, fees, and costs, plus periodic reporting comparing essential vs. non-essential pharmacies.
- 4Enforcement and penalties: The bill adds an enforcement mechanism allowing pharmacies to submit allegations of violations of the reasonable/relevant contract terms, with a structured process, access to relevant documents, standardized filing templates, and penalties or other sanctions for violations.
- 5PBM accountability and transparency: Beginning in 2028, PBMs must have written agreements with PDP sponsors that ensure remuneration is limited to bona fide service fees, with explicit rules around incentive payments, rebates, and disclosures. The statute requires transparent definitions and reporting of pricing terms, channel-specific costs, and pharmacist/provider relationships, plus annual reporting to sponsors and CMS with detailed drug- and cost-level data. It also requires affiliate disclosures, data on rebates/discounts, and mechanisms to disgorge improper remuneration.