S. 927: Protecting Pharmacies in Medicaid Act
Sponsor
Peter Welch
Democrat · VT
Bill Progress
Latest Action · Mar 11, 2025
Read twice and Referred to Finance. for review
Pharmacy middlemen pocket the gap between what Medicaid pays and pharmacies get
Why it matters
If this passes, pharmacies—especially rural and independent stores that rely heavily on Medicaid—would have a better shot at getting paid closer to what prescriptions actually cost to dispense. The losers are PBMs and any managed-care middlemen that profit from opaque spread pricing; states could gain cleaner pricing and potentially better oversight, but they may also face tougher contract rules and pushback from an industry with deep lobbying muscle.
S927 Legislative Journey
Committee Action
Mar 11, 2025
Read twice and referred to the Committee on Finance.
About the Sponsor
Peter Welch
Democrat, VT · 19 years in Congress
Committees: Agriculture, Nutrition, and Forestry, Rules and Administration, the Judiciary
View full profile →
Cosponsors (3)
This bill has 3 cosponsors: 1 Democrat, 2 Republicans, reflecting bipartisan support. Cosponsors represent 3 states: Kansas, Louisiana, Virginia.
Committee Sponsors
Finance Committee
3 of 27 committee members cosponsored
11 Democrats across this committee haven't cosponsored yet. Mobilize their constituents
S. 927 Quick Facts
- Committee
- Finance
- Chamber
- Senate
- Policy
- Health
- Introduced
- Mar 11, 2025
Read twice and Referred to Finance. for review
Mar 11, 2025
S. 927 Common Questions
How much is the penalty for a pharmacy that does not respond to the Medicaid drug cost survey?
Under the Protecting Pharmacies in Medicaid Act (Section 2), HHS may impose civil money penalties of up to $100,000 per violation for not responding, submitting false information, or otherwise failing to comply.
Does the bill ban spread pricing in Medicaid PBM contracts?
Yes. Under the Protecting Pharmacies in Medicaid Act (Section 3), amounts a PBM charges above what the pharmacy is paid, after administrative fees, are unallowable for federal matching payments.
Can Medicaid PBMs still use spread pricing and get federal matching funds?
No. According to S927 Section 3, contracts that do not meet the transparent pass-through pricing rules cannot receive federal matching payments.
What are Medicaid pharmacy payments limited to under the Protecting Pharmacies in Medicaid Act?
Under the Protecting Pharmacies in Medicaid Act (Section 3), drug payments are limited to ingredient cost plus a professional dispensing fee that is at least the State’s direct payment rate.
How much money does the bill give HHS to run monthly pharmacy acquisition cost surveys?
According to S927 Section 2, $9,000,000 is appropriated for FY 2026 and each fiscal year after, available until expended, for the survey work.
How much funding does the HHS Inspector General get to study Medicaid pharmacy acquisition costs?
Under the Protecting Pharmacies in Medicaid Act (Section 2), the HHS Inspector General gets $5,000,000 for FY 2026, available until expended, for periodic studies of the survey data.
Do mail-order and specialty pharmacies have to answer the Medicaid NADAC survey?
Yes. Under the Protecting Pharmacies in Medicaid Act (Section 2), applicable non-retail pharmacies, including mail-order and specialty pharmacies, must respond if they receive Medicaid-related payments.
Which pharmacies are excluded from the non-retail Medicaid drug price survey?
According to S927 Section 2, nursing home, long-term care, hospital, clinic, charitable or not-for-profit, government, and low-dispensing pharmacies are excluded from that non-retail survey category.
Can 340B drugs be paid above acquisition cost under this Medicaid pharmacy bill?
Yes. Under the Protecting Pharmacies in Medicaid Act (Section 3), 340B-purchased drugs may be paid above actual acquisition cost in specific cases if the covered entity reports the excess annually.
When would the Medicaid PBM pass-through pricing rules take effect?
According to S927 Section 3, the pass-through pricing requirements apply to State-PBM or managed care contracts with effective dates on or after 18 months after enactment.
Based on S. 927 bill text
S. 927 Bill Text
“To amend title XIX of the Social Security Act to ensure accurate payments to pharmacies under Medicaid and to prevent the use of abusive spread pricing practices under Medicaid.”
Source: U.S. Government Publishing Office
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