This bill, called the PBM Price Transparency and Accountability Act, tackles problems with how pharmacies are paid under Medicaid and Medicare, particularly focusing on unfair pricing practices by pharmacy benefit managers (PBMs)—the middlemen who handle prescription drug benefits.

For Medicaid, the bill requires the government to conduct monthly surveys of pharmacy drug prices to establish fair pricing benchmarks. Pharmacies must participate in these surveys and provide accurate pricing information, or face penalties up to $100,000 per violation. The bill also cracks down on "spread pricing," a controversial practice where PBMs charge states more for drugs than they actually pay pharmacies, pocketing the difference. Going forward, Medicaid payments must be transparent—showing exactly what goes to ingredient costs, dispensing fees, and administrative charges, with no hidden markups allowed. States must also require that PBMs and insurance companies managing drug benefits follow these same transparent pricing rules.

For Medicare, the bill protects patient access to local pharmacies by requiring drug plans to accept any pharmacy meeting reasonable contract standards, preventing plans from unfairly excluding pharmacies. The government must establish clear, fair standards for what contract terms are reasonable by April 2027. The bill also creates a process for pharmacies to report violations if drug plans impose unreasonable contract terms. Additionally, the government will publish regular reports tracking whether essential retail pharmacies—particularly those in rural and underserved areas—are being fairly treated and paid compared to other pharmacies.

Overall, this legislation aims to increase transparency in drug pricing, prevent middlemen from taking excessive cuts, ensure pharmacies are paid fairly for their services, and protect patient access to neighborhood pharmacies.