Monthly PBM Reform Report – December 2025
PDF: PBM & Pharmacy Related Legislative Tracker
Legislative Activity
Legislation
In December, the House narrowly advanced a Republican-led health care package that combined small-business insurance reforms with a broad set of pharmacy benefit manager (PBM) transparency provisions. On December 17, the House voted 216–211 to pass the Lower Health Care Premiums for All Americans Act (H.R. 6703).
The legislation was primarily framed as an effort to expand employer flexibility and reduce health insurance costs for small businesses. Specifically, the bill sought to make it easier for employers to offer coverage by loosening restrictions on association health plans, allowing employers to set aside pre-tax dollars to help employees purchase coverage on the ACA Marketplace through newly created “CHOICE plans,” and permitting employers to purchase stop-loss insurance to protect against unexpectedly high-cost claims.
In addition to these insurance-focused provisions, the House package also included a significant PBM reform component aimed at increasing transparency and oversight in employer-sponsored group health plans. While these PBM provisions did not directly address pharmacy reimbursement levels, they were designed to give plan sponsors greater visibility into PBM pricing practices, rebate flows, and pharmacy network behavior.
Summary of PBM Reform Provisions in H.R. 6703:
- Mandatory PBM reporting to employer plans. PBMs would be required to provide detailed reports to group health plans at least twice per year (or quarterly upon request), in plain-language and machine-readable formats. These reports would have disclosed what plans paid for drugs versus what pharmacies were reimbursed (spread pricing), net drug costs after rebates and fees, total rebates and other remuneration retained by PBMs, utilization by dispensing channel (retail, mail, specialty), patient out-of-pocket spending, and formulary placement rationales—particularly for high-cost drugs.
- Enhanced transparency for PBM-owned or affiliated pharmacies. PBMs with ownership interests in pharmacies would be required to disclose benefit designs that steer patients to affiliated pharmacies, the percentage of prescriptions filled by those pharmacies, price comparisons between affiliated and non-affiliated pharmacies, and the lowest available prices within the network for covered drugs.
- Therapeutic class and high-cost drug reporting. The bill required PBMs to report gross versus net spending by therapeutic class, average net costs for 30- and 90-day supplies, the use of utilization management tools such as prior authorization and step therapy, and enhanced disclosures for the highest-spend drugs and any related formulary changes.
- Plan and patient access to information. Employer plans would receive standardized summary tools to compare PBM pricing models, fee structures, and overall costs. Plan participants would be entitled to request aggregate summaries explaining drug spending and rebates, as well as claim-level information showing the spread applied to their own prescriptions.
- Limits on information blocking and privacy protections. PBMs and other drug supply chain entities would be prohibited from restricting or delaying access to data necessary to produce required reports. All reporting would be subject to HIPAA and federal privacy safeguards, with additional protections to prevent anti-competitive use of disclosed information.
- Enforcement and penalties. The reporting and disclosure requirements would be enforced by HHS, the Department of Labor, or the Treasury, depending on plan type. Civil penalties included $10,000 per day for failure to report or disclose required information and up to $100,000 per instance for knowingly providing false information, with discretion to waive penalties for good-faith compliance efforts.
Despite passage in the House, the broader legislation faced significant political headwinds. Notably, the bill did not include an extension of the enhanced ACA premium tax credits (EPTCs), which were scheduled to expire at the end of the year. The looming expiration of those credits – and the anticipated premium increases for the 2026 plan year – had dominated congressional debate throughout the fall and contributed to a lengthy government shutdown.
Earlier in December, the Senate voted and failed to pass a separate measure extending the credits for an additional three years. After House leaders were unable to reach agreement on an amendment addressing the EPTCs, four House Republicans – Reps. Brian Fitzpatrick (R-PA), Mike Lawler (R-NY), Rob Bresnahan (R-PA), and Ryan Mackenzie (R-PA) – broke with party leadership to support a Democrat-led discharge petition that would force a vote on extending the subsidies. Under House rules, the petition was subject to a mandatory waiting period, delaying any potential vote until January.
Because of the omission of the ACA subsidy extension, the House-passed package was widely viewed as dead on arrival in the Senate. Even Speaker Johnson’s allies privately acknowledged that the vote was more about internal party positioning than advancing legislation with a realistic path to enactment. While PBM reform language did make it into the House bill, the broader intraparty fight over health insurance subsidies ultimately overshadowed those provisions and left the legislation unlikely to move forward.
While the PBM provisions included in H.R. 6703 drew attention given the scale of the underlying bill, they were not the only PBM-related developments in December. Over the course of the month, lawmakers in both parties introduced a series of standalone PBM reform measures targeting reimbursement practices, rebate pass-throughs, and PBM steering – signaling that, even as the House vehicle stalled, momentum around PBM reform continued on multiple fronts. These bills included the following:
- PBM Fiduciary Accountability, Integrity & Reform (FAIR) Act ( 3549/H.R. 6837). Introduced in the Senate by Sen. Roger Marshall (R-KS) and in the House by Rep. Jake Auchincloss (D-MA), the bill would designate PBMs as fiduciaries under the Employee Retirement Income Security Act (ERISA). PBMs performing core functions – such as formulary and network design, rebate negotiation, claims processing, and utilization management – would be legally required to act solely in the best interests of plans and beneficiaries, rather than their own financial interests. The legislation also strengthens transparency by expanding ERISA’s compensation disclosure requirements to explicitly cover PBM and third-party administrative services, including both direct and indirect compensation tied to drug purchasing, rebates, fees, and formulary or network management. To prevent conflicts of interest, the bill generally bars PBMs from serving as the responsible plan fiduciary for disclosure purposes and prohibits contractual provisions that indemnify PBMs for breaches of fiduciary duty. These reforms would take effect beginning with plan years that start at least 12 months after enactment, giving plans and PBMs time to update contracts and compliance practices.
- Pharmacists Fight Back in Medicare & Medicaid Act (R. 6609). Introduced by Rep. Jake Auchincloss (D-MA), the bill would impose sweeping new requirements on PBMs operating in Medicare Part D, Medicare Advantage Prescription Drug (MA-PD) plans, and Medicaid managed care. Beginning in 2027, the bill conditions plan participation on PBM compliance with minimum pharmacy reimbursement standards, requiring payment to in-network pharmacies based on NADAC (or WAC where NADAC is unavailable) plus a professional margin and Medicaid-equivalent dispensing fees, while prohibiting DIR-style clawbacks and post-adjudication fees. The legislation mandates full manufacturer rebate pass-through at the point of sale to reduce beneficiary cost-sharing and bans PBM steering practices that favor affiliate pharmacies, restrict networks, or pressure manufacturers to limit distribution. To ensure oversight, PBMs would be subject to annual reporting and certification requirements, Part D bids would be required to reflect expected rebate remittances, and parallel protections would apply in Medicaid managed care. The bill establishes strong enforcement mechanisms, including felony criminal penalties and significant civil monetary penalties for knowing and willful violations, and expands Medicaid drug price transparency by requiring reporting of net acquisition costs and public release of national pricing data.
- Pharmacists Fight Back in Federal Employee Health Benefit Plans Act (R. 6610). Introduced by Rep. Jake Auchincloss (D-MA), the bill imposes comprehensive PBM reforms to the Federal Employees Health Benefits (FEHB) Program by conditioning Office of Personnel Management (OPM) approval of FEHB plans on PBM compliance with new payment, rebate, and anti-steering requirements. Under the bill, PBMs administering FEHB prescription drug benefits would be required to reimburse in-network pharmacies at NADAC (or WAC where NADAC is unavailable) plus a professional margin, pay Medicaid-equivalent dispensing fees, and pass manufacturer rebates through to beneficiaries at the point of sale to reduce cost-sharing. The legislation prohibits PBM steering, affiliate favoritism, narrow or exclusionary networks, DIR-style clawbacks, and post-adjudication fees that reduce pharmacy reimbursement. To ensure accountability, the bill authorizes OPM to impose civil monetary penalties, require corrective action plans, and ultimately debar repeat-offender PBMs from FEHB participation, while providing due-process protections including notice, hearings, and judicial review. The reforms would take effect one year after enactment.
Hearings
- House Oversight and Government Reform Committee — Members’ Day Hearing (December 17, 2025). During the House Oversight and Government Reform Committee’s Members’ Day hearing on December 17, some Members used their time to directly address concerns related to PBMs, with particularly strong and explicit remarks underscoring the urgency of PBM reform and the need for legislative action.
Rep. Rashida Tlaib (D-MI) delivered the most substantive discussion of PBMs, citing ongoing financial harm to independent pharmacies and the growth of “pharmacy deserts” driven by PBM reimbursement practices. She emphasized that PBMs are exercising unchecked influence over clinical and financial decision-making, often at the expense of patients and community providers. Referencing independent pharmacies in her district, Rep. Tlaib warned that many are operating at unsustainable losses and being forced to close despite serving as trusted health care anchors in underserved communities.
Notably, Tlaib explicitly called for committee action on PBM reform legislation, urging advancement of the Pharmacies Fight Back Act (H.R. 6609/6610). She framed the issue as bipartisan and time-sensitive, stressing that Congress must act to prevent further closures and protect patient access.
Chairman James Comer (R-KY) responded forcefully and signaled continued leadership on PBM oversight. He reaffirmed his support for PBM reform and highlighted the Committee’s prior investigative work examining PBM practices. Chairman Comer made clear that voluntary or self-regulatory approaches by PBMs were insufficient and committed to pursuing legislative remedies.
NDAA – TRICARE/PBM Oversight
In December, Congress completed action on the FY 2026 National Defense Authorization Act (NDAA), bringing the annual defense policy bill across the finish line without any meaningful expansion of PBM oversight within the TRICARE pharmacy program. The Senate passed the NDAA on Wednesday, December 17, by a bipartisan vote of 77–10, following House passage earlier in the month on December 10. President Trump signed the legislation into law on December 18.
As anticipated, the final NDAA included only limited pharmacy-related oversight provisions and did not incorporate broader PBM reform or audit authority directed at TRICARE’s pharmacy contractor, Express Scripts. While earlier House and Senate versions had preserved a narrow provision requiring the Department of War to review aspects of its mail-order pharmacy operations, conferees did not expand that language during final negotiations. Proposals to mandate an Express Scripts audit or impose enhanced transparency and reimbursement standards were ultimately left out of the final package.
From an independent pharmacy and TRICARE perspective, the outcome largely mirrored expectations heading into December. Despite sustained bipartisan interest in PBM reform, NDAA leadership made clear throughout conference negotiations that the bill would remain tightly scoped, with controversial PBM provisions deferred to standalone legislation.
Other Activity
On December 16, the GOP Doctors Caucus formally endorsed the PBM Reform Act (H.R. 4317), adding momentum to ongoing bipartisan efforts to rein in PBM practices. In its endorsement, the Caucus highlighted concerns that PBMs have contributed to higher drug costs and reduced patient access through practices such as spread pricing, formulary steering, and inadequate pharmacy reimbursement. As you know, the legislation would ban spread pricing in Medicaid, delink PBM compensation from drug prices, increase transparency around drug pricing, rebates, and formulary decisions, and strengthen federal oversight of PBM activities.
Legislative Outlook
- The consensus among Senate and House staff is that the Pharmacists Fight Back Act faces very long odds. Despite strong support from its sponsors and cosponsors, the bill would need to clear three committees – House Energy & Commerce, House Ways & Means, and House Oversight & Government Reform – which is widely viewed as unrealistic, particularly given the difficulty leadership has faced advancing healthcare legislation more broadly.
By many believe that the policies included in H.R. 4317, the Pharmacy Benefit Manager Reform Act, represent the most viable legislative path forward. Those provisions were painstakingly advanced through all three relevant House committees during the 118th Congress, and Speaker Johnson has made clear that no further committee consideration is required. As a result, the bill is eligible for House floor consideration as though it had already completed regular order – a significant procedural advantage.
This distinction matters because 2026 presents substantial structural and political challenges for any healthcare legislation, including PBM reform. As noted above, in early January the House is expected to vote on legislation extending the enhanced ACA premium tax credits (EPTCs). While such a measure could pass the House, Senate passage remains unlikely, given that the chamber has previously rejected the proposal. EPTC extension has become the Democrats’ top healthcare priority, and Democratic leadership has signaled little willingness to engage on other healthcare issues absent progress on that front.
- The next significant legislative catalyst will be January 30, 2026, when the current continuing resolution (CR) expires. At present, only the Agriculture/FDA, Legislative Branch, and Military Construction/Veterans Affairs appropriations bills are fully funded through FY 2026. As a result, Congress will need to address the remaining spending bills early in the year, creating at least a theoretical opportunity for policy riders – such as PBM reform – to be considered as part of an appropriations package. From a process perspective, this could provide a potential opening for PBM reform language to be included. However, that opportunity is constrained by the broader political environment, particularly Democrats’ insistence that any healthcare-related negotiations prioritize extension of the ACA subsidies.
Beyond appropriations, few other truly must-pass vehicles exist in 2026. Additionally, House leadership has indicated that it does not intend to pursue another budget reconciliation bill. Even if reconciliation were revived, it would likely be of limited utility for PBM reform, as the Senate parliamentarian has already ruled that several core PBM provisions – such as transparency requirements and a Medicaid spread-pricing ban – violate the Byrd Rule and therefore cannot be included.
Given these constraints, PBM reform advocates in the House are actively exploring alternative procedural strategies. These include advancing a stand-alone PBM reform package in the House under suspension of the rules and moving corresponding legislation in the Senate via unanimous consent (“hotlining”). Even so, success is far from assured. Despite broad bipartisan agreement on the substance of PBM reform, several Democratic leaders have increasingly framed PBM legislation as a “Republican” priority and have threatened to oppose such measures unless they are paired with Democratic healthcare priorities, most notably an extension of the ACA premium tax credits.
Prepared by Managing Partner, Steven Irizarry