LUGPA Policy Update - Legislative Efforts to Reform PBM Practices and Enhance Pharmacy Access

May 2025 

Pharmacy Benefit Managers (PBMs) manage prescription drug benefits for Medicare Part D, Medicare Advantage Prescription Drug (MA–PD) plans, and other payers, determining coverage, patient costs, and pharmacy reimbursements. Originally designed to control drug costs, PBMs now often tie compensation to drug list prices, incentivizing higher-cost medications and increasing patient expenses.

Current regulations allow Part D plan sponsors to favor preferred pharmacy networks, frequently excluding independent pharmacies, particularly in rural and underserved areas, limiting access to critical urologic medications. Additionally, PBM market consolidation and opaque practices, such as spread pricing and patient steering, raise concerns about anticompetitive behavior, further driving up costs and restricting patient choice. These issues directly impact independent urology practices, affecting patient access to medications, practice sustainability, and clinical decision-making.

Three bipartisan legislative proposals introduced in 2025 address PBM practices and pharmacy access in Medicare Part D and beyond, offering significant implications for LUGPA members:

1. S. 882: Patients Before Middlemen Act – Introduced March 6, 2025, by Senators Blackburn (R-TN), Hassan (D-NH), Lankford (R-OK), Warner (D-VA), Marshall (R-KS), and Welch (D-VT), referred to the Senate Finance Committee.
2. H.R. 950: Saving Seniors Money on Prescriptions Act – Introduced by Representatives Landsman (D-OH) and Harshbarger (R-TN).
3. S. 527: Prescription Pricing for the People Act of 2025 – A bipartisan effort to investigate PBM practices via the Federal Trade Commission (FTC).

These bills collectively aim to enhance transparency, ensure fair pharmacy access, and curb PBM practices that inflate drug costs, aligning with LUGPA’s mission to deliver high-quality, accessible, and affordable urologic care.

Key Provisions and Relevance to Independent Urology

1. S. 882 – Patients Before Middlemen Act

Enhancing Pharmacy Access

• Any Willing Pharmacy: Beginning January 1, 2028, Medicare Part D plans must allow any pharmacy that meets standard terms to participate. “Reasonable and relevant” contract standards must be defined by the Secretary by April 2027.
• Essential Retail Pharmacies: Independent pharmacies in underserved areas are designated as “essential.” HHS must publish biennial reports (2028–2034, then periodically) on pharmacy costs and dispensing trends, plus an annual public list of these pharmacies.
• Enforcement: By 2028, pharmacies may report violations, with penalties imposed on non-compliant plans and anti-retaliation protections in place.
• Relevance: Supports local pharmacy inclusion in networks, improving access to key urologic treatments (e.g., hormone therapies, BPH generics), especially in rural communities.

Reforming PBM Practices

• PBM Compensation Restrictions: From 2028, PBMs may only receive flat, fair-market service fees. Payment based on drug prices or rebates is prohibited; non-compliant funds are returned to plan sponsors and HHS.
• Transparency Requirements: Beginning July 2028, PBMs must submit annual reports on drug pricing, rebates, and affiliate data using a standard format (set by June 2027), and disclose manufacturer agreements.
• Audits and Oversight: Plan sponsors gain annual audit authority. Confidential channels will be available for reporting violations, and PBMs must certify compliance.
• Data Protections: Proprietary information is safeguarded, with limited disclosure only for oversight purposes.
• Relevance: Reduces PBM influence on drug costs and improves access to affordable urologic medications, benefiting both patients and independent practice sustainability.

2. H.R. 950 – Saving Seniors Money on Prescriptions Act

PBM Transparency and Accountability

• Requires PBMs to submit detailed, machine-readable annual reports to Part D sponsors, including data on dispensed drugs, prices, rebates, and pharmacy reimbursements.
• Mandates written agreements between PBMs and plan sponsors, covering rebates, discounts, and pricing guarantees.
• Authorizes annual audits of PBMs by plan sponsors; civil penalties apply for non-compliance.
• Directs the GAO to evaluate federal and state PBM reporting laws to streamline and unify regulatory requirements.
• Relevance: Greater transparency could help LUGPA practices better understand and manage drug costs. Enhanced oversight may mitigate PBM practices that negatively impact in-office dispensing and reimbursement, while streamlined rules ease administrative burdens.

3. S. 527 – Prescription Pricing for the People Act of 2025

FTC Investigation of PBM Practices

• Directs the FTC to examine PBM business practices, including potential anticompetitive behaviors such as:
• Charging higher prices to payers than reimbursed to pharmacies.
• Preferential rates for PBM-owned pharmacies.
• Steering patients to affiliated pharmacies.
• Using unaffiliated pharmacies’ data for competitive advantage.
• Designing formularies that favor high-rebate over low-cost drugs.
• The FTC will assess legal barriers to enforcement and recommend policies to improve competition and transparency.
• Relevance: Could expose PBM tactics that inflate drug costs and limit patient access, paving the way for reforms that ensure fair reimbursement, protect independent pharmacies, and support evidence-based prescribing.

Summary of Benefits for LUGPA Members
These legislative efforts would strengthen access to urologic medications, particularly in underserved areas, and address harmful PBM practices. Key benefits include:

• Improved Patient Access: Patients can more easily obtain critical medications, including for prostate cancer, ED, and incontinence, without geographic or financial obstacles.
• Lower Costs: PBM reforms may reduce drug prices, easing the financial burden on patients and lowering practice costs related to in-office dispensing.
• Practice Sustainability: Fairer reimbursement and streamlined administration enhance the viability of independent urology practices.
• Health Equity: Prioritizing access in underserved areas aligns with LUGPA’s mission of equitable care.
• Clinical Autonomy: Transparent formularies support physician decision-making based on clinical evidence rather than rebate-driven incentives.

These bills would address systemic barriers to affordable urologic care by ensuring fair treatment of pharmacies, increasing PBM transparency, and investigating anticompetitive behaviors. LUGPA commends the bipartisan leadership behind these efforts and urges swift passage to benefit independent urology practices and their patients. By prioritizing patients over intermediaries, these reforms empower LUGPA members to deliver high-quality, accessible, and equitable care.