Protecting Pharmacies in Medicaid Act

This bill aims to make Medicaid pay pharmacies more fairly and stop “spread pricing” by pharmacy benefit managers (PBMs). It requires the government to run monthly surveys of what pharmacies actually pay for drugs, for both local retail pharmacies and certain non‑retail types like mail‑order or specialty. Pharmacies must answer these surveys, the results will be shared publicly, and the Health Department’s Inspector General will study the data to spot problems. Pharmacies that refuse or lie can face fines up to $100,000 per violation . The Inspector General also gets dedicated funding to do this oversight .

The bill also changes how states can pay PBMs and managed care plans for Medicaid prescriptions. Payments must “pass through” to the dispensing pharmacy and be limited to the drug’s ingredient cost plus a fair dispensing fee. Extra markups and spread pricing are not allowed for federal matching funds. PBM admin fees must reflect fair market value, and PBMs must share detailed cost and payment data with states. There are special reporting and transparency rules for drugs bought under the 340B program, including public reports that group data by state and type of covered entity .

Key points

• Who is affected: Medicaid patients; local pharmacies and non‑retail pharmacies; PBMs and managed care plans that handle Medicaid prescriptions .
• What changes: Monthly price surveys; public reporting; fines for non‑compliance; PBM payments must fully pass through to pharmacies; spread pricing is barred; PBM fees must be reasonable; broad data sharing to states; added transparency for 340B drug payments .
• When: Survey rules start 6 months after enactment for retail pharmacies and 18 months for non‑retail pharmacies; the PBM/managed care contract rules apply to contracts taking effect 18 months after enactment; HHS must define non‑retail pharmacy types by January 1, 2027 .