US Federal Senate Bill SB927

US Federal 2025-2026 Regular Session

• Introduced: 3/11/25
• Refer: 3/11/25

Caption

Protecting Pharmacies in Medicaid Act

Impact

Should SB927 be enacted, it will fundamentally alter how pharmacies are compensated under Medicaid, promoting transparency in the pricing of drugs and related administrative costs. The bill places restrictions on pharmacy benefit managers (PBMs), limiting their ability to employ spread pricing, which allows them to charge a higher price for a drug than what they reimburse the pharmacy. By mandating that payments be based solely on ingredient costs and professional dispensing fees that accurately reflect pharmacy costs, the law seeks to protect pharmacy interests and ensure fair financial returns.

Summary

SB927, titled the 'Protecting Pharmacies in Medicaid Act', proposes significant amendments to Title XIX of the Social Security Act. The primary aim of the bill is to ensure accurate payment systems for pharmacies within the Medicaid framework and to safeguard against abusive spread pricing practices. The legislation mandates that the Secretary of Health and Human Services conducts regular surveys of retail and non-retail pharmacy drug prices, establishing national average drug acquisition cost benchmarks. This is intended to create a more equitable environment for pharmacies participating in Medicaid.

Contention

One of the notable points of contention surrounding SB927 involves the balance between state regulations and the operational flexibility of PBMs. Proponents argue that this law will protect smaller pharmacies from unfair pricing practices and ensure Medicare beneficiaries have better access to medications at reasonable prices. However, critics are concerned about the possible increased administrative burden on pharmacies due to required compliance with new pricing transparency measures, and the challenges that could arise in the implementation of these surveys by pharmacies, particularly non-retail ones. The bill establishes penalties for non-compliance with survey requests, which could create additional financial pressure on pharmacies.

Implementation

The amendments proposed in this bill are set to apply to contracts between states and managed care entities or PBMs with an effective date starting 18 months post-enactment. The Secretary has the authority to implement these changes through program instructions, effectively bypassing the typical administrative procedures. This has raised eyebrows among those concerned with the potential for rapid implementation without thorough oversight.