EPOCH TIMES: Congress Reforms Prescription Drug Supply Change: What to Know

Congress has passed a series of reforms intended to lower prescription drug prices, though some industry analysts say the impact may be less than expected.

The reforms affect the operation of pharmacy benefit managers, companies that negotiate prescription drug prices for health insurers, and employer-sponsored health plans.

Independent pharmacists and some members of Congress had long sought these reforms but were unable to get them through both houses of Congress.

The changes were finally passed as part of the Consolidated Appropriations Act of 2026, which was signed by President Donald Trump on Feb. 3.

"This was a win for the patient. This was a win for all Americans. It was a win for health care," Rep. Buddy Carter (R-Ga.), a pharmacist and advocate for reform, told reporters on Feb. 4.

Brendan Buck, chief communications officer for Pharmaceutical Care Management Association, the trade group for pharmacy benefit managers, called it a win for pharmaceutical companies.

"It is the culmination of a years-long effort by drugmakers to convince Congress that [pharmaceutical benefit managers] are the problem with high drug costs," Buck said in a Feb. 4 statement, predicting that the changes would increase prices.

Here's what you need to know about pharmaceutical benefit managers and the reforms affecting drug prices.

Pricing Reforms

Drug makers and independent pharmacists have long criticized what they call opaque pricing strategies used by pharmacy benefit managers.

Sen. Marsha Blackburn (R-Tenn.) said pharmacy benefit managers should be removed from the prescription drug supply chain. "They do not add value for the patient," Blackburn said on Feb. 4. She said the intermediary "increases the cost and limits the options for the patients."

Others dispute the characterization, saying that pharmacy benefit managers are effective in reducing consumer costs.

Rep. Eric Burlison (R-Mo.) said pharmacy benefit managers help consumers leverage their collective buying power. "If you join Sam's Club or Costco, you're joining with others, and you're able to bulk purchase and drive down costs," Burlison said in a Jan. 26 forum with the Competitive Enterprise Institute.

Pharmacy benefit managers have made money in two ways. One is by negotiating discounts or rebates with drug makers on behalf of their clients, a portion of which they retain.

"We don't know where the rebates go," Rep. Diana Harshbarger (R-Tenn.), who is a pharmacist, told reporters on Feb. 4.

The second practice is spread pricing, in which the pharmacy benefit manager will charge the insurance company or other party a higher price for the drug than it pays the pharmacy, keeping the "spread" for itself.

Under the new law, pharmacy benefit managers contracting with Medicare Part D plans and employer group health plans must pass 100 percent of the rebates, fees, and other remuneration they receive to their clients, insurance companies, or other payers.

Pharmacy benefit managers will be paid through flat-rate service fees rather than a percentage of a drug's value, eliminating an incentive to profit from higher drug prices, Harshbarger said.

Increased Transparency

The three largest pharmacy benefit managers-Optum Rx, Express Scripts, and CVS Caremark-managed nearly 80 percent of prescription drug claims for some 270 million people as of 2023, according to health industry research group KFF.

The three are owned by UnitedHealth Group, Cigna, and CVS Health, respectively. All three parent companies also own physician practices. CVS Health also owns Aetna.

"When the insurance company owns the physicians, the pharmacy, the specialty pharmacy, the clearinghouse, and the pharmacy benefit manager; that stifles competition," Harshbarger said.

Carter referred to such arrangements as monopolies, saying the companies obscure what's happening in the marketplace. "They just make it so difficult to understand," the representative said. "It's just like squeezing a balloon. When you squeeze it in one area, it comes out in another area."

Under the new law, pharmacy benefit managers will be required to report financial data twice a year, including prescription drug spending, rebates, pricing arrangements, and incentives to encourage consumers to use particular pharmacies, according to the American Journal of Managed Care.

That will allow the Centers for Medicare and Medicaid Services to track financial transactions between pharmacy benefit managers and pharmacies, payers, and drug manufacturers.

Another provision allows the federal government to review contracts between pharmacy benefit managers that do business with Medicare Part D and pharmacies to ensure the contracts are reasonable and relevant.

Uncertain Impact

Patient advocates hailed the reforms, saying they would benefit patients.

Andy Mangione of The Association of Mature American Citizens called it a satisfying victory and said it should benefit millions of Medicare Part D beneficiaries in a Feb. 4 statement.

Yet some industry analysts were less certain about the impact. "I think the effects will be muted and potentially counterproductive." Jeremy Nighohossian of the Competitive Institute told The Epoch Times.

Drug prices have been rising more slowly than those in other market segments over the last decade, Nighohossian said. "I think a lot of that is driven by the pharmacy benefit manager driving hard bargains with manufacturers and pharmacies."

Some pharmacy benefit managers began offering insurers and employers contracts with greater transparency in anticipation of this legislation, Charles White, a pharmacist and a professor at the University of Connecticut, told The Epoch Times.

ExpressScripts, owned by Cigna, announced in October that it would end its rebate program.

Optum Rx, owned by UnitedHealth Group, revised its reimbursement plan for independent pharmacies, increasing payment for brand-name drugs.

"While [this law] delivers on more transparency, the costs of other functions are being increased, so it is uncertain if the legislation will truly provide lower healthcare costs in the short to medium term," White said.