Sponsors (4)
The bill increases transparency and redirects Medicaid drug payments to better match actual pharmacy acquisition costs—reducing waste and improving provider payment—but does so with new reporting requirements, waived procedural safeguards, potential disclosure of proprietary pricing, and risks of funding disruptions or cost shifts to states and beneficiaries.
Medicaid beneficiaries, states, and taxpayers will get more accurate, drug-level payment transparency so Medicaid payments better reflect real pharmacy acquisition costs.
Dispensing pharmacies and hospital pharmacies will be paid the full drug amounts at the point of care (subject to anti‑fraud reductions), increasing revenue retained by providers that dispense medications.
Limits on administrative fees and a prohibition on spread pricing reduce Medicaid overpayments and waste, lowering program costs for states and taxpayers.
States that fail to update contracts risk withholding of Federal Medicaid payments, which could disrupt Medicaid funding and services for beneficiaries.
PBMs and managed-care entities will lose spread-pricing revenue and may respond by raising other fees or reducing services, shifting costs to states, plans, or beneficiaries.
Retail and non‑retail pharmacies face new recurring survey requirements and civil money penalties (up to $100,000) for noncompliance or false data, increasing administrative burden and compliance risk for small pharmacies and health systems.
Based on analysis of 3 sections of legislative text.
Requires monthly HHS pharmacy price surveys and mandates PBM pass‑through pricing, transparency, and drug‑level reporting; noncompliant state contracts risk withheld federal Medicaid funds.
Introduced March 11, 2025 by Peter Welch · Last progress March 11, 2025
Directs HHS to run monthly surveys that set national average drug acquisition cost benchmarks and forces greater transparency and pass-through pricing in Medicaid drug payment contracts. States must require pharmacies to respond to price surveys, PBMs and other entities must pass drug payments through in full to dispensing pharmacies (except reductions for fraud or waste) and supply detailed drug-level cost and payment data to states and HHS, and federal Medicaid matching can be withheld from states whose contracts don’t comply. Also creates a statutory definition of “pharmacy benefit manager,” requires HHS to publish annual deidentified summaries by 340B entity categories, allows HHS to contract with vendors to run surveys, and applies the new contract rules to contracts with effective dates beginning 18 months after enactment (with HHS allowed to implement by program instruction).