Federal PBM Reforms in Consolidated Appropriations Act Signed into Law

On Feb. 3, the U.S. House of Representatives passed the Consolidated Appropriations Act, 2026 (CAA 2026) and President Trump signed it into law shortly thereafter. The legislation includes multiple provisions relating to PBM operations that are expected to impact pharmacy benefits in both the Commercial and Medicare markets. Below are high-level details on notable provisions in the legislation.

Commercial Market – effective August 2028

• 100% rebate pass-through to ERISA clients – Requires PBMs to remit 100% of rebates and fees to plan sponsors. ERISA plan sponsors have 30 months to ensure their contracts are in compliance.
• PBM compensation reporting for ERISA clients – Imposes increased PBM disclosure requirements to ERISA plan sponsors to assist plan sponsors in assessing reasonableness of PBM direct and indirect compensation.  
• Employer-facing commercial transparency on prescription drug spending – Requires PBMs to report detailed data on prescription drug spending at least semi-annually. Such data includes gross and net drug spending, drug rebates, spread pricing arrangements, formulary placement rationale, and information about certain benefit designs.  

Medicare Part D Market

• “Delinking” PBM compensation from list prices – Beginning Jan. 1, 2028, PBMs are prohibited from receiving any financial value linked to the price of a covered Part D drug and instead compensation is limited to flat “bona fide service fees.”
• “Any Willing Pharmacy” network provision – Beginning Jan. 1, 2029, Part D plan (PDP) sponsors are required to contract with any pharmacy that is willing and able to meet standard contract terms and conditions, which must be “reasonable and relevant” as established by the Secretary of Health and Human Services (HHS). To ensure that such contract standards are enforced, the provision would establish a reporting mechanism, allowing pharmacies to notify HHS of any noncompliant PDPs subject to civil monetary penalties.