Monthly PBM Reform Report – July 2026

Monthly Legislative & Lobbying Activity Report for July 2026

Legislative Activity

 

House Committees Advance PBM and 340B Legislation in July

 

July was a relatively quiet month for the introduction of new PBM legislation. However, two House committees advanced measures relevant to independent pharmacies, including a significant bipartisan PBM reform bill addressing the Federal Employees Health Benefits Program (FEHBP) and a broader health care transparency package focused on the 340B Drug Pricing Program.

 

 

The bill would establish a national 340B claims data clearinghouse to process 340B transactions and identify duplicate discounts and overlapping price concessions before they occur. Covered entities and contract pharmacies would be required to submit standardized claims information to the clearinghouse. The stated purpose is to improve program integrity and reduce disputes among manufacturers, covered entities, pharmacies, and other stakeholders over whether a claim is eligible for both a 340B discount and a Medicaid drug rebate or another price concession.

 

Although the clearinghouse would not be directed specifically at PBMs, it could affect organizations that administer pharmacy claims by creating a more uniform process for identifying 340B transactions and preventing duplicate discounts. H.R. 9645 would also expand federal oversight of contract pharmacy arrangements. The bill would require registration of contract pharmacy agreements, public reporting regarding contract pharmacy locations and utilization, standardized contractual requirements, enhanced recordkeeping, and recurring audits. Because PBM-owned and vertically integrated pharmacies frequently participate as 340B contract pharmacies, these provisions could indirectly affect PBM-affiliated pharmacy operations. However, the bill does not establish new PBM reimbursement standards, prohibit patient steering, regulate PBM ownership of pharmacies, or otherwise impose major structural reforms on PBMs. The House Ways and Means Committee approved H.R. 9645 on July 15 by a vote of 25-15.

 

Hearings

 

 

Key issues addressed at the hearing included the following:

 

 

Micah Lansford Testimony

 

Micah Lansford, an APRx Board Member and owner of Roden-Smith Pharmacy near Cannon Air Force Base in Clovis, New Mexico, described how inadequate reimbursement forced his pharmacy to leave the TRICARE network in 2023. Micah reviewed nearly 7,000 prescriptions filled during his pharmacy’s final year of TRICARE participation. He found that the pharmacy was reimbursed an average of 37 cents below the acquisition cost of the medication, before accounting for dispensing costs, employee salaries, utilities, delivery, or other overhead. Under the subsequent contract terms offered to the pharmacy, Micah estimated that Roden-Smith would have lost nearly $9 per prescription before overhead. He explained that no pharmacy could continue participating in a network under terms that require it to lose money each time it provides care.

 

Micah also emphasized the impact on military families, retirees, and caregivers who had relied on Roden-Smith Pharmacy for medication reconciliation, adherence packaging, immunizations, delivery, compounding, and same-day access to medications. He told the Subcommittee, “Prescription care should not be a loss leader. No pharmacy can continue serving patients under a contract that requires it to lose money on the very care that it provides.”

 

Micah further highlighted the conflict created when Express Scripts controls network participation and reimbursement while benefiting financially when beneficiaries move to its affiliated mail-order or specialty pharmacies. As he explained. “No contractor should be allowed to referee a game while also competing in it.”

 

Micah urged Congress to require an independent audit of the TRICARE pharmacy benefit, measure actual patient access rather than relying primarily on network-distance statistics, establish transparent and sustainable reimbursement, protect beneficiary choice, and impose meaningful conflict-of-interest safeguards under future contracts.

 

In closing, he emphasized that community pharmacies want to serve TRICARE beneficiaries and would welcome the opportunity to return to the network under economically sustainable terms, “We just want a fair deal to be able to provide service to these members.”

 

 

Both the House and Senate have now included TRICARE pharmacy audit provisions in their respective FY2027 NDAA bills. While there are differences between the two versions, both would require GAO to undertake a comprehensive review of the TRICARE Pharmacy Benefits Program. The Senate version includes several additional enforcement mechanisms and follow-up requirements, including a second audit after the first new TRICARE pharmacy contract takes effect, provisions treating a contractor’s failure to provide requested information as a material breach, and restrictions on renewing or extending contracts with a noncompliant contractor.

 

Neither NDAA bill advanced in July. The House version, H.R. 8800, remains pending after the House failed on June 30 to adopt the rule governing floor consideration. The Senate version, S. 4784, remains on the Senate Legislative Calendar after the Senate failed on July 14 to invoke cloture on the motion to proceed to the bill.

 

These delays have slowed consideration of the broader NDAA but do not indicate any weakening of congressional support for the TRICARE audit provisions. The relevant House and Senate committees have both approved audit language as part of their respective bills, and the July hearing further strengthened the policy and political case for preserving it. The NDAA has been enacted for 64 consecutive years, making it Congress’s most consistently enacted major authorization measure. As a result, the TRICARE audit language remains in a substantially stronger position than most standalone PBM proposals. At this stage, the principal questions are (1) when will the House and Senate resume consideration of their NDAA bills; and (2) which elements of the two audit provisions will be retained in the final negotiated legislation.

 

Federal Regulatory Activity

 

 

The proposed settlement would require Caremark to transition to a fee-based compensation model that is not tied to drug list prices or the amount of manufacturer rebates. It would also require Caremark to offer commercial clients the option of passing rebates through at the point of sale, allowing patients to receive the benefit of rebate savings directly at the pharmacy counter. The settlement would also impose additional transparency requirements concerning PBM pricing, manufacturer rebates, and pharmacy reimbursement practices. Finally, it would require purchases made through the Administration’s TrumpRx program to count toward patients’ deductibles and annual out-of-pocket maximums once the program is implemented.

 

Caremark is the second of the “Big Three” PBMs to settle the FTC’s insulin pricing litigation, following the earlier settlement with Express Scripts. The FTC’s case against Optum Rx remains pending. The Caremark agreement continues the FTC’s focus on the relationship between PBM compensation, manufacturer rebates, formulary placement, and higher drug list prices. The settlement is also notable because the agency is pursuing changes to PBM incentive structures rather than relying solely on financial penalties.

 

 

The proposal is not yet effective. Public comments are due by September 21, 2026. Although the rule does not directly regulate PBMs, it is part of EBSA’s broader work governing ERISA-covered health plans.

 

Legislative Outlook

 

Bipartisan congressional interest in PBM reform remains strong, as demonstrated by the 40-2 Committee vote for H.R. 6610, the July 15 TRICARE hearing, and continued regulatory scrutiny of the largest PBMs. That said, there are few realistic opportunities to enact standalone PBM legislation before the end of the current Congress.

 

The principal reason is the legislative calendar. Congress left Washington for the August recess with a substantial amount of unfinished work and only a limited number of legislative days remaining before the midterm elections. When lawmakers return, House and Senate leadership will be focused primarily on government funding, the NDAA, other expiring authorities, and election-related priorities.

In that environment, even strongly bipartisan PBM legislation may struggle to receive floor time. The challenge is not necessarily a lack of support for the policy. Rather, it is the difficulty of moving standalone health care legislation through both chambers amid competing must-pass obligations and an increasingly partisan political environment.

 

The clearest exception remains the TRICARE pharmacy audit language contained in the FY2027 NDAA. As discussed more fully above, similar provisions are now included in both the House and Senate bills, and the July Personnel Subcommittee hearing provided additional bipartisan support for an independent examination of Express Scripts’ reimbursement practices, mail-order costs, network adequacy, and potential conflicts of interest. Presently, the broader NDAA process has been delayed in both chambers. The House has not returned to H.R. 8800 since the rule governing floor consideration failed on June 30, and the Senate did not invoke cloture on the motion to proceed to S. 4784 on July 14. Those procedural setbacks affect the timing of the legislation but do not materially undermine the audit provisions themselves.

 

H.R. 6610 also represents an important achievement despite the limited likelihood of enactment during the current Congress. A 40-2 committee vote provides strong evidence that fair reimbursement and anti-steering protections can command support across party lines. The vote places the proposal in a favorable position for renewed consideration next year and provides a foundation for developing a Senate companion.

 

Other targeted PBM proposals also remain useful even where near-term passage is unlikely. Legislation addressing PBM ownership of pharmacies, fiduciary duties, consultant compensation, reimbursement standards, and patient steering helps establish the terms of the policy debate and identifies specific reforms that can be pursued in the next Congress or attached to future legislative vehicles.

For the remainder of this year, however, the strongest opportunities for measurable progress will continue to come through regulatory implementation and congressional oversight. The Department of Labor, EBSA, CMS, FTC, and other federal agencies are now responsible for implementing, enforcing, or building upon the PBM reforms enacted in the Consolidated Appropriations Act, 2026.

 

Congressional letters, hearings, requests for information, and agency engagement can help ensure that the enacted provisions are not weakened through guidance or undermined by inadequate enforcement. Sustained engagement with regulators and congressional offices will be essential to ensure that implementation reflects congressional intent and the practical experience of independent pharmacies.

 

Budget Reconciliation Outlook

 

In the June report, we concluded that a third budget reconciliation package was increasingly unlikely to advance. Since then, congressional leadership has revived the effort, and both the House and Senate are proceeding with a highly limited reconciliation proposal.

 

The current package is expected to be one of the smallest reconciliation measures considered in recent history. Unlike earlier reconciliation efforts, it is narrowly focused on a limited group of fiscal and policy matters, including government funding rescissions, immigration and border-related funding, and selected tax and spending provisions.

 

Unfortunately, the package does not contain health care or PBM-related provisions, so the revival of reconciliation does not create a meaningful new legislative vehicle for PBM reform priorities. We will continue monitoring the process for unexpected changes, but reconciliation should not currently be treated as a likely path for advancing PBM or independent-pharmacy legislation.

 

 

Prepared by Steven Irizarry, Managing Partner, and Casey Davison, Partner.