Significant Changes in Pharmacy Regulations: Consolidated Appropriations Act 2026

On February 3, 2025, the Consolidated Appropriations Act, 2026, became law, introducing significant changes to the pharmacy sector. The updates directly impact pharmacy contracting, pharmacy benefit managers (PBMs), Medicare Part D sponsors, and ERISA plans. This article explores Sections 6223 and 6224, focused on Medicare Part D, with a separate analysis of ERISA plans forthcoming. Stakeholders are advised to review the full Act to assess its specific implications. The Act seeks to enhance transparency between PBMs, Prescription Drug Plan (PDP) sponsors, and pharmacies. Section 6223 sets requirements for "any willing pharmacy" contracts, differentiating between affiliate and non-affiliate pharmacies, while establishing federal oversight to report contract violations. Section 6224 revises PBM compensation under Medicare Part D, mandating that PBMs receive payment only for bona fide service fees, requiring the transfer of rebates and discounts from drug manufacturers to PDP sponsors. This section also enforces comprehensive PBM reporting, strengthening audit rights and enforcement protocols. Clarifications on "Any Willing Pharmacy" contracts necessitate adherence to standards judged reasonable by the Secretary, who will gather information to develop these standards by January 1, 2029. Definitions for essential retail pharmacies will distinguish them based on geographic factors, altering existing service area standards as outlined by federal regulations. Starting with the 2027 plan year, PDP sponsors must report incentive payments to pharmacies, with detailed systems for information submission. The Act establishes reporting pathways for contract violations, potentially leading to civil penalties for non-compliance, and requires reimbursement agreements between PDP sponsors and PBMs. Sections on the financial relationships between PDP sponsors and PBMs detail requirements for written agreements and define bona fide service fees. The legislation demands transparency in PBM pricing guarantees and performance measures, expands audit rights, and clarifies terms such as “specialty drug” and “rebate.” PBMs are required to provide annual reports detailing drug dispensing and compensation activities, with the inaugural reports due in 2028. These reports aim for clarity in PBM contracts with manufacturers, especially concerning financial incentives. The legislation underscores audit rights for PDP sponsors to verify compliance, intending to boost transparency and accountability. Penalties for non-compliance include financial sanctions and stringent reporting practices, with confidentiality protections for reporting violations. The Act maintains current pharmacy payment models for dispensing fees or rebates, while upcoming reports by the GAO and MedPAC will further evaluate the legislative changes. The Consolidated Appropriations Act of 2026 implements necessary regulatory measures to promote transparency and oversight in the pharmacy and healthcare sectors, encouraging stakeholders to align with new standards and avoid penalties.