Who is affected and how:

• Pharmacies (retail community and defined non‑retail): Must respond to monthly HHS surveys about drug acquisition costs and provide data. For Medicaid‑covered dispensing pharmacies, they should receive pass‑through payments from PBMs instead of being paid a lower net amount if spread pricing had been used. Compliance creates administrative work and potential penalties for nonresponse.

• Pharmacy Benefit Managers (PBMs) and contracted managed‑care or other entities: Must adopt transparent pass‑through contracts, disclose granular drug‑level costs and administrative fees, and limit administrative fees to fair market value. PBMs will likely lose a source of margin if they previously relied on spread pricing; they will face increased compliance, reporting, and potential revenue impacts.

• State Governments and Medicaid programs: Must revise contracts and oversight to enforce pass‑through pricing and to require pharmacy participation in surveys. States will have new regulatory and administrative duties to implement changes and to collect and submit data; some costs to states may arise unless covered by federal support.

• HHS and HHS Office of Inspector General: Gain new authorities to collect and publish pricing benchmarks, study survey data (with a $5M FY2026 appropriation), and oversee transparency of pricing. HHS is given expedited implementation powers (limited notice‑and‑comment and paperwork exemptions) which accelerate rule implementation but may invite scrutiny.

• Medicaid beneficiaries and patients: Intended long‑term effect is greater price transparency and reduction of hidden middleman charges, which could improve pharmacy access or slow price growth. Short‑term effects depend on how PBMs, pharmacies, and States change contracts; there is a risk of transitional disruption in some local pharmacy networks.

• Private sector implications: PBMs may see lower margins and challenge requirements legally or through contract adjustments; some smaller pharmacies may face reporting burdens but could benefit from more direct reimbursement. Insurers and managed care organizations could face higher visible drug costs on their books if PBM margins are eliminated, altering premium or rate dynamics.

• Fiscal impact: The bill directs $5M to the OIG for FY2026 for the study; it also removes Federal matching funds for spread‑pricing payments, which may reduce some Federal outlays tied to spread pricing but could shift reported Medicaid spending. States will incur administrative costs to update contracts and enforcement procedures.

Potential risks and tradeoffs:

• Legal and industry pushback from PBMs and other affected private parties is likely and could delay or alter implementation.
• Short‑term administrative burdens for pharmacies and States could affect small or rural pharmacies differently than large chains.
• Greater transparency may reduce hidden fees but could also change how payers negotiate discounts, rebates, and fees, with uncertain downstream effects on net drug prices for patients.