The “One Big Beautiful Bill Act” (OBBB) currently making its way through congress has garnered a lot of attention, both glowing and scathing. But one important provision has flown under the radar: reforms to how Pharmacy Benefit Managers (PBMs) operate in Medicare Part D. These reforms would introduce much needed transparency into a notoriously opaque market.
This bill requires contracts between PBMs and Medicare Part D Prescription Drug Plan (PDP) Sponsors to include provisions limiting PBM renumeration to bone fide service fees. Rebates, discounts, and other price concessions must be passed through to the PDP sponsor instead of being kept as revenue by the PBM, also known as spread pricing.
While some states have passed legislation to limit spread pricing, the federal proposal goes further. It limits the potential for the use of hidden fees, which have shuttered many independent pharmacies. Requiring savings to be passed through to the PDP sponsors reduces their costs, which can help lower premiums and out-of-pocket expenses for Medicare beneficiaries.
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Justin Leventhal is a senior policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, follow us on X @ConsumerPal.