Key Federal Legislation Impacting Managed Care Pharmacy: Geni Tunstall, JD

Managed care pharmacy professionals face a rapidly evolving policy landscape as pharmacy benefit manager (PBM) reforms encourage lower net-cost drug selection, Medicaid cuts threaten coverage for millions, and the Make America Healthy Again (MAHA) initiative intensifies federal pressure on drug pricing and reimbursement, according to Geni Tunstall, JD.

In this Q&A interview, Tunstall, associate vice president of regulatory affairs at the Academy of Managed Care Pharmacy, discusses how these developments may affect formulary strategies, contracting, pharmacy networks, and patient access, and provides guidance on preparing for legislative and regulatory shifts that could reshape the managed care environment.

The American Journal of Managed Care^® (AJMC^®): How might proposed PBM reforms under current legislation impact formulary management and contracting strategies for managed care organizations?

Tunstall: Proposed PBM reforms are set to reshape how managed care organizations approach both formulary management and contracting. Instead of prioritizing drugs with the highest rebates, these reforms will encourage a shift toward selecting medications based on the lowest net cost. New requirements—such as flat, transparent service fees—would require contracting strategies that ensure fair compensation for PBMs without relying on spread pricing. Potential restrictions on steering and network design may prompt organizations to re-examine their pharmacy networks and reimbursement practices, possibly leading to more direct partnerships with preferred pharmacies. Increased oversight and reporting will add administrative complexity, making cost management tools even more important. Ultimately, these changes may lead to innovation in contracting, including greater use of agreements tied to specific indications and patient outcomes, as organizations work to balance pricing, access, and value in a landscape where traditional rebate models are being phased out.

AJMC: What specific changes to Medicaid under the 119th Congress could significantly affect pharmacy benefit coverage or access for patients?

Tunstall: Recent changes to Medicaid could significantly impact pharmacy benefit coverage. New requirements around community engagement, stricter enrollment and eligibility checks, and limits on state funding methods may make it harder for people to keep their coverage, which could reduce access to prescription medications. Legislation like HR 1 will change how states fund medical assistance, with serious consequences for patients, providers, and managed Medicaid plans.¹ Federal spending cuts and changes to provider taxes could result in states losing nearly $370 billion in federal support, forcing tough decisions about whether states will continue funding managed care organizations. While managed care has delivered high-quality, cost-effective coverage, some states may shift to fee-for-service models for more flexibility.

These changes may also lead to higher costs for insured patients, as hospitals pass along the costs of uncompensated care. It is estimated that 17 million people could lose coverage because of the changes to Medicaid and the expiration of enhanced premium tax credits, leading to more emergency room visits from patients who are unable to pay. With the health spending cuts, hospitals and providers may not be able to access public funds to recoup these costs and will instead shift costs to the commercial population.

AJMC: Can you explain how the MAHA initiative’s regulatory actions are expected to influence drug pricing negotiations and pharmacy reimbursement?

Tunstall: Through executive orders and agency rulemaking, the MAHA initiative is expected to increase federal pressure on drug list prices and may impact how discounts and reimbursements flow through the system. This will mean stronger government pressure in price negotiations as the administration pushes for prices that are closer to international benchmarks. Reducing prices in the Medicaid and Medicare markets is also likely to influence commercial negotiation benchmarks as well. Plans and manufacturers will need to factor these downstream impacts into their contracting strategies.

The MAHA initiative will also seek to promote competition through faster generics/biosimilars, importation pathways, and incentives for lower-priced alternatives. Additionally, the administration has signaled its intent to increase direct-to-consumer pharmaceutical sales on TrumpRx but also its intent to exercise greater oversight of direct-to-consumer advertising.

AJMC: Of the health policy provisions in HR 1, which do you anticipate will have the most immediate impact on managed care pharmacy operations?

Tunstall: Medicaid cuts in HR 1 are likely to have an immediate impact. According to government estimates, these cuts could result in 17 million Americans losing their health coverage. Medicaid is a lifeline for families, covering 40% of US children, so these reductions would dramatically limit access to essential health care services for millions.

Beyond the immediate impact on patients, these cuts would drive up costs across the health care system and could even force some hospitals to close, further restricting access to critical care. The changes will increase Medicaid enrollment churn, create instability in risk pools, and reduce revenue for managed care organizations that serve Medicaid patients. Work or “community engagement” requirements, which states must implement by December 31, 2026, will increase the bureaucratic red tape that enrollees must navigate to receive coverage. This is likely to increase both administrative costs and barriers to access, as was seen in the case of the 2023 implementation of Georgia's Pathways to Coverage demonstration.

AJMC: How should managed care pharmacy professionals prepare for potential shifts in executive orders or legislation that aim to lower prescription drug prices?

Tunstall: Managed care pharmacy professionals should prepare for potential changes from initiatives like the Most Favored Nation policy, pharmaceutical import tariffs, and the proposed TrumpRx purchasing platform by being proactive and flexible, monitoring regulations, modeling financial impacts, and preparing operational plans. Ultimately, readiness requires aligning compliance, contracting, and communications functions so that managed care organizations can respond quickly and transparently to any changes in federal drug pricing policy.

REFERENCE

Bonavitacola J. Experts highlight consequences of Medicaid rollbacks due to budget bill. AJMC. July 10, 2025. Accessed October 29, 2025. https://www.ajmc.com/view/experts-highlight-consequences-of-medicaid-rollbacks-due-to-budget-bill