What new PBM reforms mean for pharma

After years of failed attempts, Congress has passed the first significant set of reforms for PBMs.

The new rules were included in a government funding bill signed into law on Feb. 3, ending a partial government shutdown and funding most government agencies through September.

Starting in 2028, PBMs must meet new requirements including passing through 100% of the rebates they get from drugmakers on to insurers and sending biannual reports to insurers with data on a range of things from the net prices they pay for drugs to how much they reimburse pharmacies.

The reforms were “a long time coming,” according to Dima Qato, a senior fellow at the University of Southern California (USC) Schaeffer Center for Health Policy and Economics. “It’s a start to improve transparency, but I think we need to ensure that [they’re] enforced.”

A quick overview. The Consolidated Appropriations Act of 2026 has a number of new regulations for PBMs, including:

• Delinking PBM compensation in Medicare Part D from drug list prices
• Requiring PBMs to offer “reasonable and relevant” Medicare Part D contracts to all pharmacies
• Banning spread pricing, a practice in which PBMs charge insurers a higher price for a drug than it pays pharmacies
• Requiring PBMs to reimburse all pharmacies the same rates for drugs rather than giving better rates to their affiliated pharmacies
• Allowing the Centers for Medicare and Medicaid Services (CMS) to investigate any complaints pharmacies lodge against PBMs

The law also gives $188 million to CMS to increase oversight of PBMs and make sure they’re complying with the new rules. 

And it includes provisions that support independent pharmacies, Qato added. Nearly one-third of independent pharmacies shut down between 2010 and 2021, according to data from USC.

An “essential pharmacy designation” declares any independent pharmacy that’s not affiliated with a PBM and is the only pharmacy within a certain distance—one mile for urban areas, two miles for suburban areas, and 10 miles for rural areas—as “essential,” meaning PBMs have to keep them in network for Medicare Part D plans.

“That’s a good step in terms of protecting pharmacies and ensuring access to pharmacies, particularly within Medicare,” Qato said.

The financial impact. While it’s hard to tell how exactly PBMs will be affected by the reforms, Qato said it’s likely they’ll “make less money.” If PBMs have to reimburse all pharmacies the same, for instance, they’ll either have to pay other pharmacies more or their own pharmacies less.

“I think, in general, [PBMs] will probably not make the exorbitant amount of dollars they’ve been making at the expense of patient access and affordability,” Qato said.

PBMs profited $60.6 billion in 2022, according to a study conducted by Eastern Research Group and published by the Office of the Assistant Secretary for Planning and Evaluation in January 2025.

Industry reactions. As you can imagine, PBMs aren’t thrilled with the reforms. The Pharmaceutical Care Management Association, the industry’s leading trade group, released a scathing statement the day the bill was signed into law, saying the rules will raise drug costs and claiming drugmakers are the real culprits when it comes to high drug prices.

“It is long past time for lawmakers to look into the ways the pharmaceutical industry games the system to block competition and artificially keep drug prices high,” the statement reads. “PBMs have adapted on their own to respond to the market and policymakers. They have also now been regulated. The bad news for pharma is it can no longer credibly run this game of distraction.”

The drugmakers were, perhaps understandably, happier with the new law.

“These reforms are a win for patients, pharmacists, providers, and employers who have urged Washington to hold PBMs accountable,” Stephen Ubl, president and CEO of the drug industry trade group PhRMA, said in a Feb. 3 statement. “For too long, PBMs have profited from medicines with little transparency or accountability. That starts to change today.”

Pharmacies are also pleased with the outcome, with the National Community Pharmacists Association’s CEO Douglas Hoey saying in a statement that the group is “grateful” for its “champions in Congress and to the president for seeing these provisions across the finish line in the face of tremendous pressure by PBM–insurers to maintain the status quo.”