FAQs About New Legislation on PBM Reform, How It Affects Patients

The Consolidated Appropriations Act of 2026 became law on February 3, 2026,¹ and notably included some changes to the way that pharmacy benefit managers (PBMs) are allowed to operate in the US. With this law having heavy implications on how PBMs will function in Medicare starting in 2028, here are some frequently asked questions about what this law means and how it will affect patients, pharmacies, and doctors.

What are the core changes for PBMs?

The core changes to PBMs included in this bill, said Jesse Dresser, Esq, partner in Friar Levitt’s Life Sciences Department, are that they change how PBMs are able to be compensated in Medicare Part D.² In an interview with The American Journal of Managed Care^®, Dresser explained that PBMs had historically received compensation through rebates that were eventually passed on to plan sponsors, and rebate money was being taken at the group purchasing organization level. Now a PBM’s compensation will not be tied to the list price of the drug, including percentage-based arrangements around compensation.

Another part of the bill introduces CMS as the middleman between PBMs and network pharmacies, allowing for network pharmacies to bring up disputes if they feel that they are not getting terms and conditions that are reasonable and relevant. CMS will now be the decider of any disputes that were a part of the Any Willing Provider Law that allowed for any pharmacy to participate in the plan as long as it was willing and able to participate in the terms and conditions applicable to all.

When do these changes take effect?

These changes will primarily take effect for the 2028 plan year for most provisions and in 2029 for those with calendar year plans.³ The 2028 effective date will be August 3, 2028. This gives all parties time to transition to the new method of PBMs functioning within the US and also helps CMS to expand its role in that time.

What new reporting requirements exist for PBMs?

Detailed reports will be required from all PBMs starting in 2028, with group plans receiving these at least twice per year. According to SentinelGroup,³ gross and net prescription drug spending, manufacturer rebates and fees, and spread pricing arrangements will all be featured in these reports for plans serving fewer than 100 employees. Large employers of 100 or more employees will also receive drug-level details in the report they receive.

How does this affect employer-sponsored health plans?

This bill applies to all employer-sponsored group health plans, which includes both fully insured and self-funded plans.⁵ The bill will require that all PBMs pass all of the rebates to group health plans. This includes manufacturer rebates, alternative discounts, price concessions, and fees and other payments that are tied to drug utilization. It also means that PBMs will not be adding additional fees or markups to the cost of the medication, and the employer will receive the full benefit. This could potentially benefit patients who take drugs with high rebates, as they would see lower out-of-pocket costs on their medications. However, there is a possibility that higher premiums for all plan enrollees will occur if rebates are not being used to reduce a plan’s overall drug benefit cost.⁶ This could also affect Medicaid programs that utilize PBMs.

Plan sponsors are able to dispute a PBM’s plan if it’s not reasonable or relevant, directly through CMS. Should PBMs refuse to provide 100% pass-through, the contract will no longer be reasonable. This could result in transaction penalties.

What are the penalties for noncompliance?

Any PBM or plan sponsor that does not comply with this new law will be facing up to $10,000 in fines per day for not providing information.³ Any PBM or plan sponsor that knowingly submits false information could also face up to $100,000 in fines. This fee is meant to incentivize compliance across the board, but will need to be enforced to be effective.

References

1. McCrear S. PBM reforms signed into law, reshaping Medicare Part D drug pricing transparency. AJMC^®. February 3, 2026. Accessed March 13, 2026. https://www.ajmc.com/view/pbm-reforms-signed-into-law-reshaping-medicare-part-d-drug-pricing-transparency
2. Bonavitacola J, Dresser J. New regulations on PBMs become law: what this means for pharmacies nationwide—a Q&A with Jesse Dresser, Esq. AJMC. February 4, 2026. Accessed March 13, 2026. https://www.ajmc.com/view/new-regulations-on-pbms-become-law-what-this-means-for-pharmacies-nationwide-a-q-a-with-jesse-dresser-esq
3. Congress passes landmark PBM reform in Consolidated Appropriations Act, 2026. Sentinel Group. February 10, 2026. Accessed March 13, 2026. https://www.sentinelgroup.com/resource-center/2026/congress-passes-pbm-reform-caa-2026
4. Ferguson LL, Hanna D, Elliott G. House passes HR 7148, advancing new PBM transparency and compensation rules. Troutman Pepper Locke. January 28, 2026. Accessed March 13, 2026. https://www.troutman.com/insights/house-passes-hr-7148-advancing-new-pbm-transparency-and-compensation-rules/
5. Stanton TJ, Kadevari RB, Adebayo OO. PBM reforms may open a new era for goup health plan sponsors. Ogletree Deakins. March 5, 2026. Accessed March 13, 2026. https://ogletree.com/insights-resources/blog-posts/pbm-reforms-may-open-a-new-era-for-group-health-plan-sponsors/
6. Freed M, Cubanski J, Williams E, Pestaina K. What to know about pharmacy benefit managers (PBMs) and federal efforts at regulation. KFF. February 9, 2026. Accessed March 13, 2026. https://www.kff.org/other-health/what-to-know-about-pharmacy-benefit-managers-pbms-and-federal-efforts-at-regulation/