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This bill amends the Social Security Act to establish new requirements under Medicare and Medicaid for prescription drug benefits and pharmacy benefit managers (PBMs). It sets pharmacy payment and rebate pass-through rules, prohibits steering, and imposes reporting and penalty requirements for noncompliance, effective for plan years beginning on or after January 1, 2027.
Sec. 2, Establishing certain requirements with respect to PBMs: For Medicare Part D, starting in 2027, contracts must require that PBMs reimburse in-network pharmacies for ingredient cost based on national average drug acquisition cost plus the lesser of 4% or $50, pay a dispensing fee equal to the state Medicaid fee, and not impose fees that reduce pharmacy payments. Rebates from manufacturers must be passed through to reduce enrollee cost-sharing at the point of sale, and PBMs must remit rebate amounts to the plan sponsor. PBMs must report compliance annually and are prohibited from steering enrollees to specific pharmacies. For Medicaid, contracts with states must also prohibit steering, set payment equal to ingredient cost plus dispensing fee, and require that any manufacturer rebates be remitted to the state. These provisions apply to contracts effective on or after January 1, 2027.
Sec. 2(c), Penalties for Noncompliant PBMs: Any person providing PBM services who knowingly and willfully fails to comply with pharmacy payment or rebate pass-through requirements, or engages in steering, is guilty of a felony punishable by a fine of up to $1,000,000, imprisonment for up to 10 years, or both. Civil monetary penalties of up to $1,000,000 per act also apply. These penalties take effect January 1, 2027.
Sec. 3, Improving prescription drug transparency under the Medicaid program: The bill expands the scope of the Medicaid drug acquisition cost survey to include all pharmacies that dispense covered outpatient drugs, not just retail community pharmacies. States must require all such pharmacies to respond to surveys and report their net acquisition prices. The Secretary must make national drug acquisition prices publicly available, including monthly response rates, sampling methodology, and information on price concessions. States are prohibited from using pricing information from non-retail pharmacies to set reimbursement rates for retail pharmacies.
Summary of the bill text as introduced in House (Dec 11, 2025), generated by SecBot from the official bill text; the Library of Congress summary is not yet published.
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Official record from Congress.gov, the House Clerk and the Senate; lobbying from Lobbying Disclosure Act filings. Updated Oct 28, 2026.