To: NACDS Chain Members From: Steven C. Anderson, FASAE, CAE, IOM President & Chief Executive Officer Date: February 3, 2026

It is an honor to have this chance to express deep appreciation to the NACDS membership for your success in securing final passage of vital PBM reforms in the U.S. Congress.

Today, the U.S. House of Representatives passed the Consolidated Appropriations Act, 2026 — sending this legislation to President Trump’s desk. The bill was passed by the Senate last week, 71-29. President Trump has indicated that he will sign this legislation into law.

Over the past two weeks, the NACDS membership answered the call yet again, urging their Senators and Representatives to enact PBM reforms. NACDS operated as it should, as an effective and powerful force multiplier for the membership — bringing a truly comprehensive advocacy campaign that has helped to deliver an important and long-fought victory for people and their pharmacies.

About the Reforms

As noted in prior communications to you, the legislation on its way to the President’s desk includes the Medicare reforms for which the pharmacy community has advocated with one powerful voice, and it also includes additional measures. The legislation does not include Medicaid reforms advocated by NACDS and our allies, due to changes in evaluations of those reforms by the Congressional Budget Office that — while questionable — could not be resolved by the House and Senate as they faced the January 30 government-funding deadline. Members of Congress have pledged to confront this issue, as part of their continued work on PBM reform.

The Medicare reforms are nothing short of historic, and truly essential given that Medicare is in the jurisdiction of the federal government and thus reliant on federal action for necessary improvements.

Importantly, pharmacy-priority Medicare reforms have been designed specifically by Congress to have the capability to address always-evolving tactics of PBMs. That is, the reforms create mechanisms that can “have teeth” even as the PBMs morph their practices.

The current legislation includes the following Medicare reforms:

• This bill includes provisions affecting PBM practices in the Medicare Part D program by modifying pharmacy network participation requirements, establishing standards for pharmacy contract terms, and regulating PBM compensation and financial transparency. Sections 6223 and 6224 apply exclusively to Medicare prescription drug plans and Medicare Advantage prescription drug plans.
• Section 6223, titled “Assuring Pharmacy Access and Choice for Medicare Beneficiaries,” requires Medicare Part D plan sponsors to permit any pharmacy willing to accept standard contract terms and conditions to participate in a plan’s pharmacy network. The section applies this requirement to prescription drug plans and Medicare Advantage prescription drug plans.
• Section 6223 further requires that pharmacy contract terms and conditions be reasonable and relevant to the provision of pharmacy services. It directs the Secretary of Health and Human Services to establish standards defining reasonable and relevant contract terms, informed by stakeholder input. These standards may address areas including reimbursement methodologies, dispensing fees, audit practices, performance measures, and network participation requirements.
• Section 6223 establishes a process for pharmacies to submit complaints to the Centers for Medicare & Medicaid Services (CMS) when a plan sponsor or PBM is alleged to be using contract terms that do not comply with the reasonable-and-relevant standards. The section requires CMS to develop a standardized complaint submission process, maintain the confidentiality of submissions, and prohibit retaliation or coercion related to complaint submission. CMS is authorized to review complaints and take enforcement action where appropriate. The section also authorizes CMS to impose civil monetary penalties or other intermediate sanctions on Part D plan sponsors that fail to comply with these requirements.
• Section 6224, titled “Modernizing and Ensuring PBM Accountability,” includes provisions governing PBM compensation and financial arrangements within Medicare Part D. The section requires PBMs to pass through to Medicare Part D plan sponsors all rebates, discounts, and other price concessions received in connection with covered prescription drugs and prohibits PBMs from retaining such amounts.
• Section 6224 permits PBMs to receive bona fide service fees in the form of clearly defined administrative fees paid by plan sponsors, provided those fees reflect legitimate services performed and are not tied to drug list prices, rebates, or other drug-based remuneration. The section prohibits PBMs from retaining drug-related remuneration by recharacterizing such amounts as service or administrative fees.
• Section 6224 also establishes expanded transparency, disclosure, and audit requirements. PBMs must disclose to plan sponsors and the Secretary detailed information regarding rebates, discounts, net drug prices, administrative and service fees, and other compensation, including information necessary to distinguish bona fide service fees from prohibited retained remuneration. The section authorizes audits and enforcement actions, including recovery of improperly retained amounts, for failure to comply with pass-through, disclosure, or compensation requirements.
• CMS is required to publish a biennial report on enforcement and oversight activities related to pharmacy access and PBM accountability, and the bill appropriates $188 million to CMS for program management, oversight, and enforcement.
• Implementation occurs on a phased schedule. For Section 6223, the Secretary must solicit stakeholder input on pharmacy contract standards by April 1, 2027, finalize standards by the first Monday in April 2028, and apply the requirements to Medicare Part D plan years beginning on or after January 1, 2029. CMS must begin publishing biennial enforcement and oversight reports no later than July 1, 2029. The PBM compensation, pass-through, transparency, and bona fide service fee requirements in Section 6224 apply on the same Medicare Part D implementation timeline.

The legislation also includes the following commercial-market reforms:

• Section 6701 adds new federal oversight requirements for pharmacy benefit managers that provide pharmacy benefit management services to group health plans and health insurance issuers in the commercial market, including routine transparency reporting (at least semi-annually, or quarterly if requested) with drug- and payment-level information and restrictions on contract terms that would impede a plan’s access to the information needed to perform oversight.
• Section 6702 establishes that a PBM’s compensation arrangement is treated as unreasonable unless the PBM remits 100% of rebates, fees, discounts, and other remuneration tied to drug utilization or plan spending to the group health plan (or to the issuer on the plan’s behalf), generally on a quarterly schedule, and it also includes disclosure and audit rights and an “innocent plan fiduciary” protection framework when a PBM fails to remit amounts and the fiduciary takes specified corrective actions.
• The commercial market/ERISA PBM reforms in Sections 6701 and 6702 generally take effect for plan years beginning on or after 30 months after enactment.

NACDS’ Statement

You already may have seen my statement about today’s action in the House of Representatives.

It appears here in its entirety:

“Congress and the Trump Administration are delivering a historic win for the American people and for the trusted pharmacies that serve as the face of neighborhood healthcare. These PBM reforms are integral to reducing people’s drug costs and keeping pharmacy care within reach, and they must be implemented swiftly, effectively, and as intended by Congress.

“The abuses of the dominant PBM middlemen are widely recognized, and this landmark federal action reflects the broad, bipartisan commitment to confront and remedy them. This is the most important federal achievement yet for PBM reform, and it will sustain and build momentum for further reforms where needed.

“We are deeply grateful to the bipartisan champions who crafted and advanced these reforms, to the members of Congress who cast decisive votes, and to President Trump for his commitment to rein in middlemen practices that have harmed patients and undermined pharmacy access.”