H.R. 4317: PBM Reform Act of 2025

The bill is a broad PBM crackdown across Medicare, Medicaid, and employer health coverage. In Medicare Part D, starting with plan years beginning on or after January 1, 2029, prescription drug plan sponsors would have to let any pharmacy into the network if it meets the standard contract terms. Before that, the Secretary has to issue a request for information by April 1, 2027 and then set standards for what counts as "reasonable and relevant" contract terms by the first Monday in April 2028. That matters because it could make it harder for plans and PBMs to lock out independent pharmacies.

The bill also creates special visibility for "essential retail pharmacies." That term is tightly defined: a retail pharmacy that is not an affiliate and is located in a medically underserved area, or in a rural area with no other pharmacy within 10 miles, a suburban area with no other pharmacy within 2 miles, or an urban area with no other pharmacy within 1 mile. Starting in 2027, PDP sponsors and Medicare Advantage prescription drug plans would have to submit affiliate lists and incentive payment data to the Secretary, and the Secretary would publish reports every 2 years starting in 2028 and continuing until 2034. Pharmacies also get a formal complaint path by January 1, 2028, with anti-retaliation protections and possible civil monetary penalties against plans.

On the money side, the bill sharply limits how PBMs can get paid in Medicare Part D beginning January 1, 2028. PBMs could only keep bona fide service fees that are flat dollar amounts and reflect fair market value. Rebates and discounts would still be allowed, but only if they are fully passed through to the PDP sponsor, and prohibited remuneration would have to be disgorged back to the sponsor. PBMs would also have to use consistent definitions for terms like generic, brand, specialty, rebate, and discount, file annual reports by July 1 each year, and turn over records within 6 months after an audit starts.

The bill reaches beyond Medicare too. For employer and group health plans, PBMs would have to report to plans at least every 6 months, or every quarter if the plan asks, starting 30 months after enactment. If they refuse, the penalty is $10,000 per day per violation; if they submit false information, it can be up to $100,000 per item. In Medicaid, the bill requires monthly pharmacy price surveys for the National Average Drug Acquisition Cost, with penalties up to $100,000 for pharmacies that do not respond or provide false information, and it bans spread pricing in managed Medicaid by requiring PBMs to pass through 100% of ingredient cost plus the professional dispensing fee to pharmacies in contracts taking effect on or after 18 months after enactment.