The White House announced that congressional bill H.R. 7148 has been signed into law, which includes reforms targeting pharmacy benefit manager (PBM) practices by shifting compensation away from rebate-linked incentives and expanding transparency requirements, an issue gaining attention in Pennsylvania.
According to AJMC, the spending law introduces Medicare Part D PBM reforms designed to reduce incentives tied to higher list prices. The policy “delinks” PBM compensation from rebates and list prices by moving PBMs toward flat administrative fees, a change supporters say can weaken “rebate maximization” and steer plans away from higher-priced drugs that generate bigger rebates.
Under the new provisions described in coverage of the law, PBMs would be required to pass through 100% of rebates, fees, and other remuneration to the payer, with Centers for Medicare & Medicaid Services (CMS) monetary penalties available for noncompliance. The goal, as reported by AJMC, is to ensure rebate dollars do not remain with middlemen and to improve accountability for how savings are handled.
PBMs sit between insurers/payers, drug manufacturers, and pharmacies—negotiating rebates and building formularies and pharmacy networks that shape what patients pay and where they can fill prescriptions. Federal scrutiny has intensified: the FTC’s interim staff report on “prescription drug middlemen” argues PBM concentration and vertical integration can disadvantage patients and independent pharmacies without sufficient transparency.
A Pennsylvania Auditor General performance audit found PBM “spread pricing” in Medicaid led taxpayers to pay $7 million more in 2022 than they should have. The audit described evidence of overcharging tied to PBMs billing the state more than what pharmacies were reimbursed, highlighting how PBM pricing mechanics can inflate public spending.
The White House serves as the executive branch office supporting the President and communicates official administration actions through its public “Briefings & Statements” releases. These postings serve as the government’s on-the-record record for presidential actions and policy announcements, archived for public access on WhiteHouse.gov.
