Q&A: Overlapping PBM, 340B Reform Create Uncertainty for Pharmacies

Federal pharmacy benefit manager (PBM) reform, Federal Trade Commission (FTC) settlements with the largest PBMs, and a growing patchwork of state laws are all aiming at the same pricing practices. Pharmacies, however, according to experts, may soon be navigating a confusing landscape where those rules overlap and conflict.

In part 2 of our interview discussion, Allison Schneider, MPH, director at ADVI Health, continues to provide expert insights on the expanding Medicare Drug Price Negotiation Program (MDPNP). Moving aside from the parameters of the initiative, Schneider shares her perspective on how 2026 developments in the PBM and 340B spaces will create further uncertainty for the financial viability of community pharmacies.

Read through the second part of our chat with Schneider and stay tuned for the full conversation on the Over the Counter podcast this Thursday afternoon.

READ MORE: Future IRA Drug Negotiations Expected to Compound Pharmacy Burden

Drug Topics: As Medicare and Medicaid initiatives like the MDPNP continue to roll out in 2026 and beyond, how are state and federal PBM reform measures compounding pharmacies’ reimbursement disruptions? In other words, is this reform complementing or taking away from Medicare and Inflation Reduction Act initiatives?

Allison Schneider: I would say there’s a lot going on in the policy space that could impact pharmacies. Medicare negotiation is a big part of that, but as you noted, we have a range of different types of PBM reforms that are happening. This is an area where we’ve seen states be really active for quite a while. All states have some type of PBM reform in place, although that varies considerably. We did see earlier this year the federal government enact pretty comprehensive PBM reform legislation that will apply nationally. That will impact pharmacies in different ways, and it includes different requirements based on the market that we’re talking about, largely looking at Medicare Part D and commercial.

Just a few of those reforms that I’ll hit on that will be going into effect in the coming years: There were changes to how PBMs are reimbursed by plan sponsors. Those requirements differ between commercial plans and Part D plans. Really impactful for pharmacies, though, there are also some additional requirements around pharmacy networks that PBMs are using, particularly in the Medicare Part D space. The Centers for Medicare & Medicaid Services (CMS) right now is in the process of developing new standards for what constitutes reasonable and relevant pharmacy contracting for Part D plans, and those standards will take [place] a little bit down the road; not until [2029]. But they are working on revamping that right now and looking for input on how to make sure that pharmacies are not unfairly advantaged. I think that’s a positive but will potentially be a change that will be coming for pharmacies.

There have also been a number of settlements over the past year with major PBMs and the FTC. Those include some kind of transparency and compensation reform, but they do also include provisions around [anticompetitive] steering practices, preventing those PBMs from steering patients to affiliated or owned pharmacies. Some of that is [going to] be competing, for lack of a better word, with the legislative reforms that we saw passed. There’s some overlap there. It’ll just be something that will have to be worked out in terms of implementation, how those are all applied.

And then on the state side, like I said, we’ve seen states be very active in the PBM space. One kind of reform that we’ve been watching in recent years that’s a bit more novel is around PBM pharmacy ownership. We’ve seen a few states, Arkansas and Tennessee, that have enacted laws that are restricting PBM ownership of pharmacies in the state. Those are both subject to lawsuits right now, and those are ongoing. We’re closely watching those to see how they play out. They could have implications for similar laws being enacted or not moving forward in other states nationally.

Drug Topics: How does the expansion of Medicare Maximum Fair Prices intersect with 340B contract pharmacy programs and the developments that have surrounded them as of late?

Allison Schneider: 340B, I would say, is also an area where there’s a lot of activity right now, particularly at the federal level. In terms of looking at the interaction between Medicare maximum fair prices and 340B, the core issue there is really de-duplication. Manufacturers are required to provide the lower of the Medicare negotiated price, that maximum fair price that we were discussing, [or] the 340B ceiling price, but not both. What we’ve seen play out over the last few years is back-and-forth on [what] does that look like on the ground? What’s the implementation approach?

We just recently saw the federal government approve for the second time manufacturer plans to use a rebate model for negotiated drugs but specifically within the 340B program. [Similar] with how that rebate works for negotiated prices, manufacturers would be providing a rebate to effectuate the 340B ceiling price, whichever one was lower. We just saw a new lawsuit launched against the second approval, so we’ll see if we ultimately see implementation in January of next year. But there is that interplay going on right now.

Many manufacturers have implemented contract pharmacy requirements over the last few years. One recent trend I would highlight—which goes hand in hand with the interplay with Medicare negotiation, and we’ve seen a few manufacturers note that [as] part of the reason why they’ve expanded their policies—is expanding their existing contract pharmacy policies to in-house pharmacies within covered entities so they have greater control of 340B claims. A lot [is] going on. I think [there will] likely be more information on that ahead of [2027], when we’ll see those plans going into effect for drugs that are currently subject to negotiation, as well as drugs that will be having negotiated prices going into effect [January 1] of next year.

READ MORE: Law and Regulations Resource Center