Modernizing and Ensuring PBM Accountability Act

This bill amends the Social Security Act to establish new requirements for pharmacy benefit managers (PBMs) under Medicare and Medicaid, aiming to increase transparency, prevent abusive pricing practices, and improve pharmacy access and oversight. It covers PBM agreements, pharmacy performance measures, transparency, spread pricing, payment accuracy, studies, and reports.

Sec. 2, Arrangements with pharmacy benefit managers: For plan years starting on or after January 1, 2026, contracts between PDP sponsors and PBMs must require that PBMs derive no income other than bona fide service fees, with incentive payments deemed such fees if they are flat dollar amounts.

Sec. 3, Ensuring fair assessment of pharmacy performance: For plan years starting on or after January 1, 2025, PDP sponsors and MA-PD plans must use only standardized pharmacy performance measures established by the Secretary for incentive payments or fees based on pharmacy performance.

Sec. 4, Promoting transparency for pharmacies: For plan years starting on or after January 1, 2025, PDP sponsors and MA-PD plans must promptly provide pharmacies with claim-related information, such as Network Reimbursement ID and fees, in a standardized format upon paying a claim.

Sec. 5, Preventing abusive spread pricing in Medicaid: Contracts between states and PBMs or managed care entities must use a transparent pass-through pricing model, limiting payments to ingredient cost and a professional dispensing fee, with all payments passed through to the pharmacy.

Sec. 6, Ensuring accurate payments to pharmacies under Medicaid: The Secretary must conduct a survey of retail community pharmacy drug prices to determine national average drug acquisition cost, and states must require pharmacies to report certain payment information.

Sec. 7, OIG study on drug price mark-ups in Medicare Part D: The Inspector General must study the impact of related party transactions within vertically integrated entities on negotiated prices for Part D drugs, including acquisition costs and transfer pricing.

Sec. 8, Resolving P&T committee conflicts of interest: For 2025 and subsequent years, any PBM acting under contract with a PDP sponsor must also be subject to the conflict of interest requirements for pharmacy and therapeutic (P&T) committees.

Sec. 9, Enhancing PBM transparency requirements: Health benefits plans, PBMs, and their affiliates must provide specified information to the Secretary and, for PBMs, to the health benefits plan, at times and in a form specified by the Secretary.

Sec. 10, Facilitating midyear formulary changes for biosimilars: For plan year 2025 and later, PDP sponsors may change the preferred or tiered cost-sharing status of a reference biological product if they add a biosimilar at the same or higher preferred status, subject to approval.

Sec. 11, Strengthening pharmacy access for seniors: For plan year 2026 and later, PDP sponsors may not restrict access to covered Part D drugs to a subset of network pharmacies except for limited access drugs, and must document the rationale for such restrictions.

Sec. 12, Beneficiary-focused listening sessions: By December 31, 2024, the Secretary must hold at least one public listening session to receive input on improving prescription drug plan transparency, access, and choice for beneficiaries.

Sec. 13, Reporting on enforcement and oversight: The Secretary must publish a biennial report on enforcement and oversight actions related to pharmacy access requirements under Medicare Part D, without disclosing identifiable information or trade secrets.

Sec. 14, GAO study on price-related compensation: The Comptroller General must study compensation and payment structures related to drug prices in the retail prescription drug supply chain, including among PBMs, plan sponsors, wholesalers, pharmacies, and manufacturers.

Sec. 15, Reports on inappropriate pharmacy rejections: By January 1, 2026, and every 4 years thereafter, the Secretary must post a public report on efforts to prevent, identify, or address inappropriate pharmacy rejections and coverage denials under Medicare Part D.

Sec. 16, GAO study on drug shortages: The Comptroller General must study factors contributing to shortages of covered Part D drugs, including trends, causes, and effects on beneficiaries, and report to Congress within 2 years.

Sec. 17, Report on biosimilar and generic access: The Inspector General must study biosimilar and generic drug access and adoption under Part D, including barriers and spending effects, and publish a report within 1 year.

Sec. 18, Medicare Improvement Fund: The bill amends the Medicare Improvement Fund to add $1,947,000,000 for fiscal year 2028, in addition to the existing $180,000,000 for fiscal year 2022.