Monthly Legislative & Lobbying Activity Report for February 2026
Legislative Activity
Implementation of H.R. 7148, the Consolidated Appropriations Act, 2026
Following enactment of the Consolidated Appropriations Act, 2026 (signed into law on February 3, 2026), February activity shifted quickly from “passage” to implementation, oversight, and positioning for the next phase of PBM reform. While most provisions phase in beginning in 2028–2029, the law’s enactment has already changed the congressional posture: Members and staff are treating the new PBM reforms as a foundation—not an endpoint—and are actively exploring what additional transparency, competition, and pharmacy access policies should follow.
In parallel, several February developments signaled increasing interest in structural solutions to vertical integration and expanded scrutiny of PBM compensation models, particularly where PBM incentives are tied to list price, rebates, and affiliated pharmacy steering.
Additional PBM Legislation Introduced
- PBM Price-Linked Compensation Transparency – S. 3751, the Prescription Drug Supply Chain Pricing Transparency Act (Introduced January 29, 2026). Introduced by Sens Michael Bennet (D-CO) and James Lankford (R-OK), the bill:
- Directs GAO to study compensation and payment structures tied to drug price across the retail drug supply chain—explicitly including PBMs, Part D plan sponsors, rebate aggregators, wholesalers, pharmacies, manufacturers, consultants, and related intermediaries.
- Examines conflicts of interest. Evaluates whether percentage-of-price fees and other price-linked payments create incentives to favor higher-priced drugs and rebate-maximizing formulary decisions—especially in vertically integrated PBM models.
- Requires a GAO report to Congress within two years with recommendations for legislative or administrative action.
- Structural Separation of Insurers, PBMs & Providers – S. 3822, Break Up Big Medicine Act (Introduced February 10, 2026). Introduced by Sens. Elizabeth Warren (D-MA) and Josh Hawley (R-MO), the bill would impose new federal prohibitions on common ownership across the prescription drug and medical services supply chain, targeting vertically integrated platforms that combine insurance, PBMs, and provider assets. Key provisions include:
- Ban on insurer–PBM–provider common ownership. Prohibits a parent company from owning an insurer and PBM while also owning medical providers or management services organizations (MSOs).
- Mandatory divestiture. Requires divestiture of either (i) provider/MSO assets or (ii) insurer/PBM assets within one year.
- Wholesaler separation. Bars drug/device wholesalers from owning providers or MSOs, also subject to a one-year divestiture deadline.
- Enforcement with penalties. Directs FTC/DOJ to set compliance milestones within 30 days; imposes monthly escrow of 10% of profits for missed milestones and authorizes a divestiture trustee if deadlines are not met.
- Expanded enforcement rights. Creates private right of action (treble damages), empowers state AGs, and requires quarterly reporting to Congress.
Hearings
- House Energy & Commerce and Ways & Means Hearings on Health Insurance Affordability (January 22, 2026)
On February 11, the House Energy & Commerce Health Subcommittee held a hearing titled “Lowering Health Care Costs for All Americans: An Examination of the Prescription Drug Supply Chain.” The hearing featured nine witnesses spanning drug manufacturers, PBMs, employers, wholesalers, and independent pharmacy stakeholders, including David Marin (PCMA), James Gelfand (ERIC), and B. Douglas Hoey (NCPA).
PBMs and vertical integration were central themes throughout. Health Subcommittee Chairman Morgan Griffith (R-VA) emphasized supply chain opacity and flagged PBMs as a continuing oversight target even after enactment of the new PBM reforms. Full Committee Chairman Brett Guthrie (R-KY) similarly focused on how supply chain consolidation and contracting practices may disadvantage employers and patients.
Members on both sides directly scrutinized PBM market power and affiliated ownership structures. Rep. Buddy Carter (R-GA) challenged PBM claims that they are the primary drivers of affordability, citing FTC findings regarding PBM markups and reimbursement disparities between affiliated and unaffiliated pharmacies. Democrats, including Rep. Nanette Barragán (D-CA) and Rep. Debbie Dingell (D-MI), raised concerns that PBM incentives can steer patients toward higher-cost drugs and can distort access to lower-cost alternatives.
Independent pharmacy concerns were raised repeatedly, with witnesses and Members highlighting reimbursement pressure, opaque pricing, steering to affiliated pharmacies, claw-backs, and rebate-driven formulary decisions. Employer witnesses pressed for greater PBM transparency and debated whether PBMs should be held to ERISA fiduciary standards, with Members exploring whether fiduciary duties could better align PBM incentives with plan sponsors and patients.
Overall, the hearing reinforced that, even after enactment of the new PBM reforms, PBM oversight remains a top committee priority and Members continue to show bipartisan interest in additional transparency, competition tools, fiduciary concepts, and structural remedies.
Other Lawmaker Activity
Sen. Mike Crapo (R-ID) Op-Ed Signals Continued PBM Reform Momentum (February 23, 2026). On February 23, Senate Finance Committee Chairman Mike Crapo (R-ID) published an op-ed, “A Bipartisan Fix for the Prescription Drug Market,” emphasizing that PBM reform remains one of the few areas of sustained bipartisan agreement in health care policy. He described PBMs as powerful middlemen whose negotiated savings are not consistently passed through to patients and taxpayers and highlighted concerns with opacity, perverse incentives, and preferential treatment for PBM-affiliated pharmacies.
Crapo placed particular emphasis on vertical integration, arguing that common ownership across insurers, PBMs, and pharmacies creates incentives for steering and rebate-driven formulary decisions. Importantly, he framed the recently enacted PBM reforms as a starting point and called them a “foundation” for additional efforts to restore transparency and competition—signaling that Senate Finance intends to keep PBM reform and oversight a priority in 2026.
Federal Regulatory Activity
Department of Labor Proposed PBM Transparency Rule. On January 30, the Department of Labor unveiled a proposed regulation to strengthen PBM transparency for employer-sponsored plans, and the proposal became an active stakeholder and Hill discussion point throughout February. The proposal would:
- Require PBMs (e.g., CVS Caremark, Express Scripts, Optum Rx) to provide semiannual disclosures to employer plan sponsors detailing payments, rebates, incentives, and other compensation tied to formulary placement and drug pricing negotiations.
- Require disclosure of spread-related compensation, including when a plan pays more than the amount reimbursed to the pharmacy.
- Provide annual audit rights for self-insured plans.
- Require an explanation if PBMs exceed projections by 5% or more.
Notably, the rule does not prohibit spread pricing or mandate full rebate pass-through in the commercial market, reinforcing that – absent legislation – administrative action will likely focus first on transparency rather than structural commercial PBM reforms.
Legislative Outlook
February reinforced two parallel realities:
- Political and policy momentum for PBM reform remains strong—as demonstrated by the February 11 hearing, the introduction of structural separation legislation, and Chairman Crapo’s public positioning.
- The limiting factor continues to be legislative opportunity and floor bandwidth. Outside of appropriations, potential vehicles remain narrow, with standalone pathways (House suspension/Senate UC) possible but challenging—particularly in an election year in which control of the House is in play and the legislative calendar is likely to compress significantly by early August.
Accordingly, February efforts focused on reinforcing with allies that PBM reform remains unfinished, while continuing to assess the feasibility of standalone legislative strategies and identifying discrete, high-consensus PBM policies that could advance under expedited procedures.
Prepared by Managing Partner, Steven Irizarry