President Trump Signs Sweeping, Unprecedented Federal PBM Reform

President Donald Trump signed into law a sweeping federal funding package that includes the first significant reforms to pharmacy benefit managers (PBMs) in decades, according to a news release from the National Community Pharmacists Association (NCPA).¹ This move aims to disrupt the traditional middleman model in the pharmaceutical supply chain and give the Centers for Medicare and Medicaid Services (CMS) more authority in managing PBM-pharmacy relationships.

“Let's talk about what the biggest part of this bill is, what it does in Medicare Part D contracts,” Anne Cassity, senior vice president of government affairs at NCPA, told Drug Topics. “The legislation would require CMS to define and also enforce reasonable and relevant contract terms in Part D contracts. The reason that’s important right now is—I call it kind of like the Wild Wild West in contracting with Part D—there's really no parameters there; take it or leave the contract.”

The legislation, embedded within a broader bill funding the Department of Health and Human Services (HHS), targets the opaque business practices of PBMs that have long been a point of contention for local pharmacies and pharmacists. For independent community and long-term care pharmacists, the enactment of these provisions represents a hard-won victory and a fundamental shift in the pharmacy payment landscape.¹

READ MORE: What the Newest Landmark PBM Reform Means for the Pharmacy Industry

A cornerstone of the new reform is the mandate for CMS to define and enforce “reasonable and relevant” contract terms within Medicare Part D plans. This provision is specifically designed to address long-standing concerns from pharmacists regarding underwater reimbursements and predatory contracting practices that have threatened the survival of independent pharmacies, forcing unprecedented closure rates in recent history.

By empowering CMS to oversee these contractual obligations, the law aims to ensure that pharmacy payments are fair and that the terms of participation in federal programs are not dictated solely by the interests of large PBMs.

“I talked to a lot of our members; they are accidentally thrown into these contracts where they may not see the contract, and so they didn't opt out, and the next thing they know, they're stuck in these contracts for 2 years,” continued Cassity. “It's little things like that, not just the reimbursements, that are so problematic.”

Beyond contract enforcement, the legislation introduces new transparency measures that allow CMS to track payment trends and monitor pharmacy inclusion in PBM networks. For rural and underserved areas, the law establishes a new designation of essential retail pharmacies, ensuring that vital community health care hubs are protected from exclusion by PBM-controlled networks.²

These oversight mechanisms are intended to provide a clearer picture of how money flows through the drug supply chain, preventing PBMs from unfairly squeezing independent providers out of their market. However, there is some speculation—similar to all the provisions under the new law—that experts are uncertain about based on previous history.

“We've had problems with enforcement of PBM reforms in the states, and we've seen that states pass very important, really good, and significant substance with PBM laws,” Cassity said. “It's a great opportunity; there's a lot that can be done. We just ought to make sure that CMS does it in the right way.”

In a direct hit to the current PBM profit model, the law prohibits PBM compensation in Medicare Part D from being tied to the manufacturer’s list price of a drug.² This delinking of fees is intended to remove the incentive for PBMs to favor high-cost medications over more affordable alternatives, a practice that advocates say has historically driven up costs for both taxpayers and patients. By restructuring how these entities are paid, the reform aims to lower drug prices and refocus the industry on clinical value rather than rebate maximization.¹

The passage of these reforms follows years of intensive advocacy by NCPA and a slew of other pharmacy-focused organizations, marking the first major change to Medicare Part D in 20 years.

The NCPA’s “Finish the Fight” campaign was a primary driver behind the legislative momentum, mobilizing patients to send nearly 100,000 letters to Congress demanding PBM accountability. NCPA CEO Douglas Hoey characterized the signing as a milestone achieved in the face of immense pressure from the PBM industry to maintain the status quo, noting that while the pharmacy payment model is changing, the fight to secure the future of independent pharmacies remains ongoing.

“PBMs have been stealing hope and health from the American people for decades, inflating prescription drug costs, forcing pharmacy closures, and blocking access to medications. To that I say: Not on my watch,” concluded PBM reform advocate and Congressman Buddy Carter, according to a press release.³ “The PBM mafia has officially been put on notice. I’m excited to continue working with President Trump [to] help build a quality, accessible, and affordable health care system for patients.”

READ MORE: Medicare Reforms Aim to Pay Pharmacists for Clinical Care

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REFERENCES

1. NCPA cheers as Trump signs first major PBM reform in decades. NCPA. News Release. February 4, 2026. Accessed February 6, 2026. https://ncpa.org/newsroom/qam/2026/02/04/ncpa-cheers-trump-signs-first-major-pbm-reform-decades

2. Gallagher J. Funding package extends Medicare telehealth, enacts PBM reforms, and updates hospital oversight. First Report Managed Care. February 5, 2026. Accessed February 6, 2026. https://www.hmpgloballearningnetwork.com/site/frmc/blog/funding-package-extends-medicare-telehealth-enacts-pbm-reforms-and-updates-hospital

3. A new era for patients: Carter celebrates President Trump signing PBM reforms into law. United States Representative Buddy Carter Georgia’s 1st District. News Release. February 3, 2026. Accessed February 6, 2026. https://buddycarter.house.gov/news/documentsingle.aspx?DocumentID=16308