A Pivotal Moment for Patients and Independent Pharmacies: Congress Acts on PBM Reform with Bipartisan Legislation

For decades, independent pharmacies have stood at the front lines of patient care — dispensing medications, counseling patients, managing chronic conditions and serving as trusted healthcare professionals in rural, suburban and urban communities alike. Yet while pharmacists deliver care directly to patients every day, Pharmacy Benefit Managers (PBMs), which are powerful intermediaries or “middlemen,” have operated with limited oversight and accountability, steering patients and prescriptions, unilaterally controlling reimbursement terms, controlling network participation and, in the process, destroying independent pharmacies throughout the country and directly interfering with patient access to optimal pharmacy care.

The recent release of legislative text for a government funding bill in the U.S. House of Representatives — which includes substantial PBM reform language negotiated with the Senate Finance Committee — represents a critical step forward for patients and independent pharmacies nationwide. The Ranking Member of the Senate Finance Committee, Senator Ron Wyden, stated that the agreement “represents important steps forward on health care priorities like taking on pharmaceutical middlemen,” and highlighted inclusion of significant Medicare PBM policies that prioritize families over corporations.

Within this legislative package, at least two sections stand out as game-changing provisions:

• Sec. 6223: Assuring pharmacy access and choice for Medicare beneficiaries, and
• Sec. 6224: Modernizing and ensuring PBM accountability.

Why do these provisions matter for patients and independent pharmacies?

Background: Why PBM Reform Has Reached a Tipping Point

PBMs manage prescription drug benefits for Medicare Part D plans and private health plans. Originally intended to streamline claims processing and negotiate discounts, PBMs have grown into powerful and highly consolidated corporate behemoths controlling which pharmacies are in network, how much pharmacies are reimbursed for medications, and how rebates and discounts flow through the system.

Over the past several years, as PBMs have become more well known, certain PBM business practices have drawn sustained criticism, including:

Spread pricing, where PBMs charge plans more for a drug than they reimburse pharmacies and keep the difference;
Opaque fee structures, including retroactive fees that reduce reimbursement after the fact;
Network steering, favoring PBM-owned or affiliated pharmacies;
Take-it-or-leave-it contract terms, disproportionately disadvantaging independent pharmacies; and
Lack of transparency, leaving pharmacies, patients and policymakers in the dark about how pricing and reimbursement decisions are made.

These practices have contributed to an alarming wave of independent pharmacy closures, particularly in underserved areas. According to industry data, thousands of community pharmacies have shuttered in recent years, creating “pharmacy deserts” and forcing patients to travel farther for essential medications. Unfortunately, in many cases patients go without necessary care.

Legislative efforts to reform PBM conduct have gained momentum in both the House and Senate, resulting in bipartisan efforts and a corresponding framework that now appears in must-pass funding legislation — a milestone moment.

Sec. 6223: Assuring Pharmacy Access and Choice for Medicare Beneficiaries

At the core of Sec. 6223 is a fundamental principle: Medicare beneficiaries should have real choice in where they fill prescriptions, and independent pharmacies should not be shut out of networks based on arbitrary or unfair contracting practices.

Under the current Medicare Part D network rules, PBMs have broad and often unchecked discretion in deciding which pharmacies participate in a plan’s network, and on what terms. This has allowed practices that undermine independent pharmacies, including narrow pharmacy networks, unreasonably low reimbursement rates and contract terms that fail to cover pharmacies’ actual costs.

The legislation amends Section 1860D–4(b)(1) of the Social Security Act to:

1. Require prescription drug plan sponsors to permit any pharmacy that meets standard contract terms to participate as a network pharmacy. In other words, PBMs and plans can no longer exclude willing pharmacies arbitrarily; participation must be open if the pharmacy meets objective standards.

2. Mandate that contract terms and conditions be “reasonable and relevant,” with the Secretary of Health and Human Services tasked with developing standards that ensure contract terms reflect the real-world costs of operating a pharmacy — including ingredient costs, dispensing fees, and operational expenses, not just revenue extraction.

3. Require a formal request for information from stakeholders to inform those standards — including whether reimbursement and dispensing fees sufficiently cover the actual costs independent pharmacies incur. This provision ensures that the rulemaking process will consider pharmacy business realities, not just insurer preferences.

Why This Matters for Independent Pharmacies

For years, independent pharmacies have faced network exclusion or unworkable contract terms that effectively limit their ability to serve Medicare beneficiaries. Sec. 6223 seeks to:

Increase network access and competition by preventing plans from restricting participation to a narrow set of pharmacies;
Promote fair contracting terms that reflect the true cost of dispensing medications;
Strengthen independent pharmacy viability, especially in rural and medically underserved communities where alternatives are few; and
Empower patients with meaningful choice in where they receive their medications.

From a policy standpoint, this section acknowledges that open, fair pharmacy networks are essential to patient access — and that the federal government has a role in ensuring network rules do not undermine public health goals.

Sec. 6224: Modernizing and Ensuring PBM Accountability

While Sec. 6223 focuses on pharmacy access, Sec. 6224 goes after the practices that have allowed PBMs to operate with little transparency or accountability.

Modernizing PBM accountability involves several interlocking reforms that address core structural issues in how PBMs are compensated and how they interact with pharmacies, plans and taxpayers:

1. Delinking PBM Compensation from Drug List Prices

One of the most troubling incentives in the current system is tying PBM compensation to the list price of drugs — a metric that is often artificial and inflated compared to the net price after rebates and discounts. Delinking PBM compensation from list prices realigns incentives away from promoting higher-priced drugs and toward lowering costs for patients and payers.

2. Enhanced Transparency and Reporting Requirements

Under Sec. 6224, PBMs would be subject to significantly expanded reporting obligations, including disclosures to:

Medicare Part D plan sponsors and the Department of Health and Human Services,
Information about rebates, discounts, net prices paid for drugs and other compensation streams,
Any ownership interests or affiliations with pharmacies that could influence network design or patient steering.

This level of transparency is long overdue. For too long, PBM contracts and pricing arrangements have been opaque, making it difficult for pharmacies, regulators and patients to understand where money flows and how pricing decisions are made.

3. Audits and Accountability Tools for Plan Sponsors

Sec. 6224 empowers plan sponsors to audit PBMs to ensure compliance with contract requirements. This creates a mechanism for detecting abuses and enforcing transparency promises — something that has been lacking in the current regulatory framework.

4. Hard Consequences for Non-Compliance

This section also contemplates punitive measures for PBMs that fail to meet disclosure and accountability obligations, including disgorgement of improperly retained remuneration. These enforcement levers are critical because transparency without teeth is insufficient to change entrenched practices.

Patient Protections and Systemic Benefits

Taken together, Sec. 6223 and Sec. 6224 reflect a broader bipartisan recognition that the prescription drug system must work for patients first, not for intermediaries with conflicting profit incentives. Medicare beneficiaries stand to gain greater access and choice at the pharmacy counter, with open pharmacy networks and reasonable contract terms. Patients may also benefit from more transparent drug pricing, with less opportunity for hidden spread pricing or compensation structures that drive higher out-of-pocket costs and interfere with patients using the pharmacy of their choice. These reforms align with what independent pharmacy advocates have long sought: a system that prioritizes care delivery over revenue extraction.

Implications for Independent Pharmacies

For independent pharmacies — which employ more pharmacists per prescription, provide more patient counseling and often serve communities with fewer health care options — these provisions are transformative. As presented, they could:

Protect independent pharmacies from arbitrary network exclusion;
Rein in PBM practices that squeeze reimbursement margins;
Create predictable, transparent contracting standards; and
Help preserve access to local pharmacy care in areas increasingly at risk of closure.

Looking Ahead

While Sec. 6223 and Sec. 6224 represent major strides, they are the beginning, not the end, of PBM reform. Implementation details, regulatory guidance and enforcement mechanisms will ultimately determine the real-world impact of these reforms.

Yet for independent pharmacies and the patients they serve, this legislative package offers a long-sought acknowledgment from Congress that the status quo has failed too many Americans — and that corrective action is necessary.

With bipartisan support and clear policy direction, this legislation has the potential to reshape the prescription drug landscape in a way that promotes access, fairness and accountability — fundamental goals that independent pharmacies have championed for years.