Impacted: All clients across all lines of business

What you need to know

A House reconciliation bill, H.R. 7148, The Consolidated Appropriations Act, 2026, was released Tuesday morning. It contains several provisions concerning pharmacy benefit management (PBM) and prescription drug pricing. The bill passed in the House today by a vote of 341 to 88 with 2 not voting. It’s expected to be voted on by the Senate next week and must be signed by the President by Jan. 30 to avoid a partial government shutdown. 

This legislation is progressing rapidly and may still change. As is often the case with large, complicated bills, some sections lack clear definitions and are being interpreted differently by policymakers, stakeholders and media outlets. Much will also depend on how regulators — the Department of Health and Human Services (HHS), the Centers for Medicare & Medicaid Services (CMS), the Department of Labor (DOL) and the Internal Revenue Service (IRS) — interpret its provisions in future required rule making and guidance. 

Prime Therapeutics’ (Prime) goal is to serve as a reliable source of fact-based guidance as this process unfolds. We remain dedicated to supporting clients by actively advocating for beneficial legislative changes, with clear updates and practical guidance throughout the process as new developments occur. 

Overview

Based on the legislative text as released, the PBM-related provisions fall into several main categories: 

Rebate Pass-Through Requirements (Commercial and Medicare) 

• PBMs would be required to pass on all manufacturer rebates and fees directly to health plans and employers, without keeping any part of these rebates as revenue. 
• We believe that requiring a full rebate pass-through will affect carriers offering carved-in PBM services to self-insured employers, potentially necessitating financial adjustments.

New Transparency and Reporting Requirements

• Requirements include detailed reporting to regulators (and plan sponsors) on total rebates and price concessions received, amounts passed through to plans and employers, amounts retained by the PBM and other extensive elements of drug spending broken down in multiple ways. 
• We believe transparency requirements are likely to involve considerable administrative complexity, as they require creating machine-readable files with many data elements, such as detailed narrative descriptions of formularies. Producing and standardizing these narratives may be difficult, which could make implementation more challenging for regulatory authorities. 

PBM Compensation and Fee Structure Provisions 

• The bill broadens CMS's authority to review and regulate PBM compensation, extending oversight beyond traditional bona fide service fees. 
• The bill also includes rebate aggregators and GPOs, but only with respect to rebates — not fees. For other sections of the bill, both rebates and fees are addressed. This distinction could influence how compensation for these groups is regulated. 

Medicare Part D Contracting and Pharmacy Standards 

• The bill expands CMS’s authority to audit and oversee contracts between PBMs and pharmacies. 
• It establishes a framework that enables CMS to implement the “delinking” of PBM compensation from drug pricing. 
• The legislation also directs CMS to examine network participation and, if appropriate, regulate standards for pharmacy contracting and specified reimbursement methodologies, including formulas based on Average Wholesale Price (AWP). 
• Notably, this bill does not include Medicaid spread pricing provisions. 

Key Areas Requiring Further Clarity 

Before the full impact can be determined, these areas need clarification: the definitions of “PBM,” “affiliate,” and “compensation”; the scope of new audit, reporting, and disclosure requirements; and the effective dates and implementation timelines. 

Prime’s Assessment and Actions 

Prime is actively involved in advocating for changes to the legislation to protect our clients from unintended consequences, by working with Pharmaceutical Care Management Association (PCMA) and other partners to try to remove or limit certain commercial market provisions, which has been the focus of PCMA and larger PBM advocacy. However, if the bill moves forward in the Senate, it will likely stay the way it is now, with most PBM-related provisions remaining. 

At a high level: 

• We are actively assessing potential impacts to contracts, reporting and operations under multiple scenarios. 
• We are diligently monitoring the legislation to distinguish verified information from speculation. It is noteworthy that reporting on this legislation has not always been accurate or comprehensive. We will continue to provide clear and timely updates as developments occur. 

Other Legislative and Regulatory Vehicles 

H.R. 7418 is currently the most viable near-term legislative vehicle, but we are also monitoring other policy and regulatory actions. This includes the recently released Trump “The Great Health Care Plan” which we communicated on earlier this week, as well as a pending Department of Labor rulemaking proposal on new potential mandated PBM-to-fiduciary disclosures and other proposed PBM reform bills. 

Ongoing Commitment and Communication 

Our commitment to you remains strong. As legislative and regulatory issues arise, we will continue to engage directly with policymakers and industry partners, advocate for changes that protect health plans and employers, and provide practical guidance as the process unfolds. We will also share additional analysis whenever there are material developments. 

Questions

Please contact your Prime account team representative with any questions or support needs.