S.526 - Pharmacy Benefit Manager Transparency Act of 2025 (119th Congress)
Summary
The Pharmacy Benefit Manager Transparency Act of 2025, or S.526, aims to regulate pharmacy benefit managers (PBMs) by preventing unfair and deceptive practices related to prescription drug pricing. It prohibits PBMs from charging health plans different amounts than they reimburse pharmacies, clawing back reimbursements unfairly, or increasing fees to offset federal reimbursement changes. The bill also mandates transparency through reporting requirements to the Federal Trade Commission (FTC) and the Department of Health and Human Services (HHS), and includes whistleblower protections.
Expected Effects
The Act seeks to lower prescription drug costs for consumers and payers by increasing transparency and preventing deceptive practices by PBMs. It is intended to foster more competition within the pharmaceutical supply chain. The Act also empowers the FTC and state attorneys general to enforce these regulations, potentially leading to investigations and penalties for non-compliant PBMs.
Potential Benefits
- Increased transparency in PBM operations, allowing health plans and payers to better understand drug pricing.
- Prevention of unfair and deceptive practices, potentially leading to lower prescription drug costs for consumers.
- Protection for whistleblowers who report violations of the Act, encouraging greater accountability.
- Enhanced enforcement capabilities for the FTC and state attorneys general.
- Studies and reports to Congress providing insights into PBM practices and recommendations for further legislative action.
Potential Disadvantages
- Potential for increased administrative burden and compliance costs for PBMs, which could be passed on to consumers or health plans.
- Possible legal challenges from PBMs regarding the interpretation and enforcement of the Act.
- The act may not fully address all factors contributing to high drug prices, such as pharmaceutical company pricing strategies.
- The effectiveness of the Act depends on the rigor of enforcement by the FTC and state attorneys general.
- Potential for unintended consequences, such as PBMs consolidating or altering their business practices in ways that reduce competition.
Constitutional Alignment
The Act aligns with the general welfare clause of the Constitution (Preamble), as it aims to improve healthcare affordability and access. Congress's authority to regulate interstate commerce (Article I, Section 8, Clause 3) provides a basis for federal regulation of PBMs, which operate across state lines. The reporting requirements and enforcement mechanisms are consistent with Congress's power to enact laws necessary and proper for carrying out its enumerated powers (Article I, Section 8, Clause 18).
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).