Impacted: Health plan clients (Commercial and Medicare)

What you need to know

Congress has passed H.R. 7148, The Consolidated Appropriations Act, 2026, which includes significant federal reforms impacting pharmacy benefit managers (PBMs) and prescription drug pricing. The bill has passed both the U.S. House of Representatives and the Senate and has been signed by President Donald Trump as part of a package to help end the partial government shutdown. 

This legislation is separate from other proposed PBM-related regulatory updates, including a Department of Labor (DOL) proposal, which Prime is monitoring independently.

Topic	DOL proposed rule	H.R. 7148
Who it applies to	Self-insured ERISA group health plans only (employer funded plans)	Commercial market broadly + Medicare provisions; not limited to ERISA
Type of change	Disclosure only (no operational or pricing mandates)	Substantive market and compensation reforms, including 100% rebate pass through and new CMS oversight
Regulator	DOL	HHS, CMS, DOL, IRS to implement

 

Overview

Based on the legislative text passed by Congress, the PBM-related provisions from H.R. 7148 fall into three primary areas:

Full rebate and price concession pass-through (commercial and Medicare):

• PBMs, health insurers and third-party administrators (TPAs) would be required to pass though 100% of manufacturer rebates and price concessions to ERISA self-funded group health plans and Medicare plan sponsors.
• Applies to plan years starting on Jan. 1, 2028 (Medicare) and new, renewed or extended contracts for plan years beginning 30 months after enactment (commercial).

Expanded transparency and reporting requirements:

• H.R. 7148 establishes comprehensive statutory reporting and disclosure requirements to plan sponsors and regulators, including:
  • Rebates, discounts, alternative discounts and other remuneration 
  • Spread pricing arrangements
  • Formulary placement rationale
  • Cost and utilization data by national drug code (NDC), therapeutic class, channel and day’s supply

Reporting must be provided in machine-readable formats starting July 1, 2028 for Medicare Part D, and for plan years starting 30 months after enactment for commercial business.

Medicare Part D contracting and compensation standards:

• Requires PBM compensation to be delinked from drug list prices by 2028 (except that rebates and other remuneration based on drug price that are passed through entirely to plan sponsors are acceptable).
• Limits remuneration for covered Part D drugs to bona fide service fees, defined as flat-dollar, fair market value amounts.
• Expands Centers for Medicare and Medicaid Services (CMS) authority to oversee pharmacy network participation and contracting standards, including additional reporting requirements.

Unlike earlier versions of comprehensive PBM reform, this legislation does not include Medicaid changes or Medicaid spread pricing provisions. 

Prime's assessment and actions

With Congressional passage complete, the focus now shifts to regulatory implementation, where PBM provisions are expected to remain consistent with the legislative framework. 

At a high level:

• Prime is assessing potential impacts to contracts, reporting and operations across commercial and Medicare markets.
• We will continue to provide clear and timely updates as agencies begin formal rulemaking.

Federal agencies will initiate rulemaking and sub-regulatory guidance over the next six to 30 months, with staggered effective dates by provision and market segment. Prime is preparing for a transition from legislative monitoring to implementation planning and compliance readiness.

We will continue to engage with policymakers and industry partners, advocate for approaches that protect health plans and employers, and provide guidance as implementation details become clearer. 

Questions

Reach out to your Prime account team representative.