This bill, known as the "Pharmacists Fight Back in Medicare and Medicaid Act," aims to significantly regulate Pharmacy Benefit Managers (PBMs) within the Medicare Part D and Medicaid programs. Effective January 1, 2027, it introduces stringent requirements for PBMs and their affiliates to ensure fair pricing, transparency, and prevent anti-competitive behaviors in prescription drug benefits. The legislation seeks to address concerns regarding PBM practices that impact pharmacies, patients, and program costs.

Under Medicare Part D, the bill mandates that PBMs and plan sponsors adhere to specific pharmacy payment requirements. These include reimbursing in-network pharmacies for the ingredient cost of drugs based on the national average drug acquisition cost (NADAC) plus a dispensing fee equal to that paid under the State's Medicaid program. Furthermore, PBMs are prohibited from imposing additional fees that reduce the pharmacy's reimbursement.

A key provision is the rebate pass-through requirement, which compels PBMs to apply manufacturer rebates at the point of sale, reducing the patient's coinsurance or copayment. Any remaining rebate amounts must be remitted to the plan sponsor or the Secretary for subsidy-eligible individuals. PBMs are also required to submit annual reports certifying their compliance with these payment and rebate rules, and that they have not engaged in steering.

The bill broadly defines "steering" to include directing enrollees to specific pharmacies, designing plans that require the use of affiliate pharmacies, or creating pharmacy networks that give preferential treatment, thereby restricting other in-network pharmacies. Similar requirements are extended to Medicaid, where contracts with PBMs or managed care entities must include provisions for fair pharmacy payments, a prohibition on steering, and the remittance of manufacturer rebates to the State.

To enforce these new regulations, the bill establishes significant criminal and civil penalties for PBMs that knowingly and willfully violate the pharmacy payment requirements, engage in steering, or fail to comply with rebate pass-through mandates. Additionally, it enhances prescription drug transparency under Medicaid by expanding the scope of pharmacies required to participate in drug acquisition cost surveys and making this pricing information, including price concessions, publicly available.