S 526119th CongressIn Committee

Pharmacy Benefit Manager Transparency Act of 2025

Introduced: Feb 11, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Pharmacy Benefit Manager Transparency Act of 2025 would impose new rules on pharmacy benefit managers (PBMs) and their affiliates to curb unfair and deceptive pricing practices and false information related to prescription drug benefits. It prohibits certain practices where PBMs retain price differences, claw back reimbursements, or increase fees to offset changes required by Federal programs, unless specific pass-through and disclosure conditions are met. The bill also requires detailed annual reporting to the Federal Trade Commission (FTC) and the Department of Health and Human Services (HHS), commissions GAO studies and Congress reports on PBM conduct and formulary practices, and strengthens whistleblower protections. Privacy protections are included, and the act would not override state laws. Overall, the measure aims to increase transparency, curb anti-competitive behavior, and provide greater oversight of PBMs to reduce costs for consumers and payers.

Key Points

1Prohibition on unfair or deceptive pricing practices by PBMs:
2- It is unlawful for a PBM to charge a health plan more for a drug’s ingredient cost or dispensing fee than what the PBM reimburses a pharmacy for those costs, with the PBM retaining the difference.
3- It bans arbitrary or deceptive clawbacks of reimbursements to pharmacies, except in limited cases (fraud, contract misalignment, or services not rendered).
4- It bars increases in fees or decreased reimbursements to offset changes in federal program reimbursements, again with limited exceptions.
5Exceptions and required disclosures:
6- If a PBM passes through 100% of price concessions (rebates, discounts, etc.) to health plans/payors, it is not in violation.
7- Comprehensive disclosure is required of costs, prices, reimbursements, fees/markups/discounts, and aggregate remuneration from drug manufacturers (upon request).
8Prohibition on false information reporting:
9- It is unlawful to report false or misleading PBM information to federal agencies when required by law, if such reporting could affect federal market analyses.
10Transparency and reporting requirements:
11- PBMs must annually report to the FTC and HHS on: (a) aggregate differences between what plans pay and what is paid to pharmacies; (b) specific fees and price concessions; (c) formulary tier changes and justifications for moves that raise consumer costs or lower pharmacy reimbursements; and (d) differences in reimbursements between owned/affiliated vs. non-affiliated pharmacies.
12- The FTC must deliver annual Congress-facing reports on enforcement, investigations, complaints, formulary design practices, and policy recommendations to improve competition and lower costs.
13- Separate reports to Congress on formulary design/placement practices and their impact on revenue, patient access, and potential legislative/action recommendations.
14GAO study:
15- The Comptroller General must study PBMs’ role, competition (including market shares of the top 10 PBMs), rebates/fees, formulary design effects, prior authorization times, step therapy, and price dynamics across payors, with policy recommendations to lower drug costs and improve competition.
16Enforcement and penalties:
17- The FTC would enforce violations as unfair or deceptive practices, with civil penalties up to $1,000,000 per violation, and state attorneys general may sue on behalf of residents.
18- The act preserves other enforcement tools and allows for independent state action, including intervention by the FTC where appropriate.
19Whistleblower protections:
20- Discrimination against individuals who report potential violations or participate in investigations is prohibited, with remedies including reinstatement, back pay with interest, and damages.
21Privacy safeguards:
22- Disclosures must comply with HIPAA privacy/security rules, ensuring patient and provider identifiers are not disclosed.
23State law interaction and definitions:
24- The act does not preempt state laws. It includes detailed definitions for Commission, PBMs, health plans, prescription drugs, and related terms.

Impact Areas

Primary groups/areas affected:- Pharmacy Benefit Managers and their affiliates/subsidiaries: must change pricing practices, increase transparency, and comply with reporting and privacy requirements.- Health plans/payers and their beneficiaries: potential changes in pricing structures, formulary design, and patient cost exposure due to more transparent rebates and concessions.- Pharmacies: protections against unjust clawbacks and more predictable reimbursement practices; must track and report certain financial terms.Secondary groups/areas affected:- Patients and consumer payors: potential long-term effects on drug prices and out-of-pocket costs through greater transparency and competition.- Federal regulators (FTC, HHS) and Congress: expanded enforcement, reporting, and oversight obligations; increased data collection and policy analysis.- Federal and state governments: possible shifts in drug pricing dynamics and intermediation costs; monitoring of competition and potential mergers among PBMs.Additional impacts:- Competition and market structure: GAO study and ongoing reporting could influence policy debates on PBM mergers, formulary practices, and intermediary costs.- Formulary design practices: potential reforms to reduce incentives that favor high-rebate drugs over lower-cost options.- Privacy and data security: heightened focus on protecting patient and provider information in required disclosures.- Compliance costs: PBMs and health plans may incur additional administrative costs to collect, verify, and report required data.

Generated by gpt-5-nano on Nov 19, 2025