Pharmacy benefit manager (PBM) reform included in government funding package
Pharmacy benefit manager reform, along with other health care measures, was part of legislation signed by President Donald Trump this week, ending a partial government shutdown.
The funding bill, the Consolidated Appropriations Act 2026, includes transparency requirements for PBMs. Provisions in the bill include:
- Prohibit PBM compensation in Medicare Part D from being tied to the manufacturer’s list price of a drug – a policy known as “delinking - in an effort to reduce drug prices and save money for taxpayers. Instead, intermediaries negotiating on behalf of the program would be paid a fee that reflects the fair market value of their services.
- Promote price transparency for prescription drugs purchased by employer health plans by ensuring PBMs provide group health plans and issuers with detailed data on prescription drug spending at least semiannually. Such data includes gross and net drug spending, drug rebates, spread pricing arrangements, formulary placement rationale, and information about benefit designs that encourage the use of pharmacies affiliated with PBMs. This also ensures that health plans and individuals can receive a summary document regarding information about the plan’s prescription drug spending.
- Require the Centers for Medicare & Medicaid Services to define and enforce “reasonable and relevant” Medicare Part D contract terms, including information about reimbursement and dispensing fees. The bill also establishes an appeals process for pharmacies to dispute terms that do not follow the reasonable and relevant standards. CMS also has enforcement authority to impose monetary penalties, and CMS will receive $188 million for implementation.
- Promote transparency by allowing CMS to track payment trends to pharmacies and pharmacy inclusion in PBM networks, including a designation of essential retail pharmacies.
PBMs under scrutiny in Washington
Regulators and lawmakers have increasingly criticized PBMs, arguing that the middlemen drive up the cost of drugs and steer patients toward affiliated pharmacies at the expense of independently owned drugstores.
The three largest PBM companies, owned by insurers, account for 80% of the market. They are Cigna subsidiary Express Scripts, United Health’s Optum Rx and CVS Caremark. Critics argue their effective monopoly discourages inclusion of independent pharmacies as preferred providers.
However, the Pharmaceutical Care Management Association, which represents PBMs, said the reforms won’t lower drug prices and argued lawmakers should now target pharmaceutical manufactures for their role in rising medication costs.
In addition to PBM reform, the bill extends some pandemic-era health care policies. Expanded Medicare reimbursement for telehealth was funded through 2027. In addition, the Acute Hospital Care at Home Program, an initiative that allows approved hospitals to deliver inpatient care in patients’ homes, has been extended through Sept. 30, 2030.
© Entire contents copyright 2026 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.


More shopping, less switching and a new kind of buyer
Equitable reports mixed results but looks ahead to a stronger 2026
Advisor News
- How advisors can help frugal retirees finally enjoy their savings
- Wealth planning vs. estate planning: Honoring your client’s wishes
- What to discuss during the first retirement planning meeting
- Inflation, competing priorities and uncertainty erode retirement security
- As health premiums rise, 1 in 8 workers cut retirement savings
More Advisor NewsAnnuity News
- Jackson Announces New Annuity Offering for AARP Members
- National Life Group expands annuity portfolio
- AM Best to Join Life/Annuity Insurance-Focused Panel Discussion at Capitol Forum Event
- USAA Earns No. 1 Ranking in JD Power Individual Annuity Study for the Third Consecutive Year
- How flexible annuities fit today’s retirement portfolios
More Annuity NewsHealth/Employee Benefits News
- Anthem Blue Cross and Blue Shield Announces Agreement with Brokers Holding Group to Expand Reach in Georgia’s Small and Mid-Markets
- New Findings from Bar Ilan University Describe Advances in Mental Health Diseases and Conditions (Did Nationwide Mental Health Insurance Reform In Israel Increase Access To Community-based Care? a Population-based Retrospective Cohort Study): Mental Health Diseases and Conditions
- The closing argument for Republicans
- NYC public hospitals brace for coverage crisis as federal Medicaid work requirements loom
- MDHS announces open enrollment assistance for eligible families through SHIP
More Health/Employee Benefits NewsLife Insurance News
- Corebridge Financial Announces Third Quarter 2026 Results
- MassMutual announces record $3.3 billion policyowner dividend for 2027
- Protective Completes Acquisition of Obsidian, Establishing Specialty Property and Casualty Business Line
- Jackson Announces New Annuity Offering for AARP Members
- Open Enrollment Starts November 1: Tampa Broker Ryan Michalek Urges Families and the Self-Employed to Check 2027 Costs Before They Auto-Renew
More Life Insurance News