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LUGPA Policy Brief - The PBM Reform Act of 2025

On July 10, 2025, Representative Earl L. “Buddy” Carter (R-GA), joined by 11 bipartisan cosponsors, introduced the PBM Reform Act, a comprehensive legislative proposal aimed at reining in the anticompetitive and opaque practices of pharmacy benefit managers (PBMs). This bill is a significant step toward restoring fairness and transparency in the prescription drug supply chain, impacting independent physician practices, pharmacies, and, most importantly, patients.

Key Provisions of the PBM Reform Act
The PBM Reform Act implements several essential reforms to increase transparency, reduce costs, and improve patient access:

  • Ban on Spread Pricing in Medicaid
    Eliminates spread pricing in Medicaid and replaces it with a transparent reimbursement model, ensuring fair compensation for pharmacies serving Medicaid beneficiaries.
  • Reforms to Medicare Part D
    Delinks PBM compensation from drug costs and imposes new transparency requirements on PBM operations within Medicare Part D.
  • Increased Transparency in Drug Pricing
    Requires PBMs to provide semi-annual reports detailing drug spending, rebates, and formulary decisions to employers and patients, enabling more informed decision-making.
  • Federal Contract Oversight
    Directs the Centers for Medicare & Medicaid Services (CMS) to define and enforce “reasonable and relevant” contract terms in Medicare Part D pharmacy contracts and strengthen oversight of violations.

Bipartisan Support
The PBM Reform Act is backed by a bipartisan coalition of lawmakers, including:
Debbie Dingell (D-MI), Greg Murphy (R-NC), Deborah Ross (D-NC), Jodey Arrington (R-TX), Diana Harshbarger (R-TN), Vicente Gonzalez (D-TX), Rick Allen (R-GA), Raja Krishnamoorthi (D-IL), John Rose (R-TN), Derek Tran (D-CA), and Nicole Malliotakis (R-NY). This broad support reflects growing concern across the political spectrum about PBM practices that restrict access and increase drug costs for patients.

Background: FTC Report on PBM Market Practices
In January 2025, the Federal Trade Commission (FTC) released its second Interim Staff Report, “Specialty Generic Drugs: A Growing Profit Center for Vertically Integrated PBMs,” revealing the extent of PBM-driven market manipulation:

  • Excessive Markups: Between 2017 and 2022, the three largest PBMs—CVS Caremark, Optum Rx, and Express Scripts—imposed markups of hundreds to thousands of percent on specialty generic drugs, including treatments for cancer, heart disease, and HIV.
  • Market Consolidation: PBMs steered the most profitable prescriptions toward their affiliated pharmacies, sidelining independent community pharmacies.
  • Revenue Disparities: These three PBMs generated more than $7.3 billion in dispensing revenue above the National Average Drug Acquisition Cost (NADAC).
  • Abusive Spread Pricing: PBMs charged plan sponsors more than they reimbursed pharmacies, pocketing the difference.
  • Rising Patient Costs: Out-of-pocket costs and plan sponsor expenditures on specialty generics rose at double-digit compound annual growth rates.

Implications for Urologists and Patients
PBM practices significantly affect urology practices by increasing the cost and reducing the accessibility of essential medications, particularly for patients with chronic or life-threatening conditions. Independent pharmacies are disproportionately affected, resulting in closures that limit patient access and increase out-of-pocket expenses. The PBM Reform Act offers much-needed corrective action by restoring fairness and patient choice in the healthcare system.

LUGPA’s Advocacy Priorities
LUGPA strongly supports the PBM Reform Act and continues to advocate for policies that:

  • Promote transparency and accountability in drug pricing.
  • Prevent anticompetitive behavior by vertically integrated PBMs.
  • Support the viability of independent practices and pharmacies.

These efforts are crucial to maintaining patient access, reducing drug costs, and ensuring the sustainability of community-based care. LUGPA will continue to monitor this issue and advocate for meaningful reforms that prioritize patient access and affordability over corporate profit.