Congress Takes Major Steps Towards PBM Reform in New Spending Package

In a significant move for the pharmacy sector, Congress has included crucial reforms aimed at pharmacy benefit managers (PBMs) in the end-of-year spending package. This outcome follows vigorous advocacy from the American Pharmacists Association (APhA) as they rallied support from numerous members, urging Congress to address long-standing issues associated with PBMs' practices that adversely affect pharmacies and patients alike.

For years, APhA has spotlighted how many independent pharmacies have shut down due to the abusive and unchecked strategies employed by PBMs, creating what has been termed ‘pharmacy deserts’ in underserved rural and urban areas across the country. This crisis has substantially restricted access to essential health services for many communities that primarily relied on local pharmacies for their healthcare needs.

Michael D. Hogue, the executive vice president and CEO of APhA, expressed gratitude towards congressional advocates for recognizing the urgent need for reform. He stated, "Pharmacy is united in standing up for our patients to reform the broken PBM marketplace. APhA has fought for these overdue changes to put an end to the harmful practices of PBMs that have deprived communities of the healthcare services they depend on. We appreciate our congressional champions, as there is still more work to be accomplished. APhA, along with our partners, will continue our efforts to secure significant PBM reforms and bring transparency and accountability to the healthcare market."

The newly introduced PBM reforms highlighted in the spending package include several key measures:

1. Ensuring Accurate Medicaid Payments to Pharmacies: This section mandates a comprehensive survey of retail community pharmacy drug prices, establishing benchmarks for Medicaid reimbursement. This is designed to ensure that pharmacies receive fair compensation, particularly within Medicaid-managed care and commercial markets.

2. Preventing Abusive Spread Pricing: A revolutionary ban has been instituted against PBMs utilizing spread pricing in Medicaid-managed care. This practice, which has allowed PBMs to profit by overcharging Medicaid while underpaying pharmacies, will cease starting mid-2026.

3. Enhancing Pharmacy Access in Medicare: Another pivotal reform requires the Centers for Medicare and Medicaid Services (CMS) to enforce reasonable and relevant terms for Medicare Part D contracts, beginning in early 2028. This change is aimed at allowing any willing pharmacy to participate, enhancing patient choice.

4. Modernizing PBM Accountability: Future provisions will aim to decouple PBM profits from inflated list prices for prescription drugs, effective after January 1, 2028.

5. Implementation of PBM Transparency Measures: Over two years after the package’s enactment, PBMs will be required to unveil clear information regarding drug pricing, rebates, and discounts to enhance transparency in the commercial marketplace.

6. Full Rebate Pass-Through: Furthermore, PBMs must fully pass 100% of drug rebates and discounts directly to the respective health plan or employer, solidifying financial fairness in pharmacy benefits.

As APhA continues to work towards the implementation of these reforms, the overarching goal remains focused on protecting pharmacies, ensuring they remain open to serve their communities, and restoring the integrity of the healthcare marketplace. The changes represent a monumental step in altering the relationship between pharmacies and PBMs, promoting an environment where pharmacies can thrive and, most importantly, patients can receive the care they deserve.

The collective efforts from APhA members and their allies in Congress underscore a growing commitment to confront the challenges posed by PBMs and safeguard pharmacy services nationwide. As stakeholders look to the future, the spirit of collaboration among pharmacists, legislators, and advocates serves as a beacon of hope for an equitable and accessible healthcare system.