The bill mandates that the Medicare Payment Advisory Commission (MedPAC) produce two reports to Congress about agreements between pharmacy benefit managers (PBMs) and entities offering prescription drug plans (Part D) and Medicare Advantage prescription drug (MA–PD) plans. The initial report must describe patterns in the submitted data, analyze how different contract terms affect enrollee out-of-pocket costs and pharmacy reimbursements, and offer recommendations; a follow-up report two years later must document changes over time and provide any further recommendations.
The requirement only becomes operative after the Secretary makes the underlying data available to MedPAC, which means the timing and substance of the analysis will depend on what CMS provides and how it protects confidential commercial information. For stakeholders—Congressional oversight offices, plan sponsors, PBMs, pharmacies, and beneficiary advocates—the statute creates a focused evidence base that could inform future legislative or regulatory decisions about Part D and MA–PD market structure, pricing, and benefit design.
At a Glance
What It Does
It directs MedPAC to submit an initial and a final report to Congress analyzing agreements between PBMs and Part D and MA–PD plans; the initial report must include descriptive statistics, an analysis of how agreement differences affect enrollee costs and pharmacy reimbursement, and recommendations, and the final report must track changes over a subsequent two-year period.
Who It Affects
MedPAC and the Secretary (CMS) are the statutory actors; affected market participants include PBMs, Part D plan sponsors, MA–PD plans, pharmacies, and Medicare beneficiaries whose out-of-pocket costs may be analyzed and highlighted.
Why It Matters
It creates a mandated, publicly delivered evidence product aimed at illuminating PBM contracting practices in Medicare drug coverage—information that has been fragmented and largely proprietary—potentially supplying Congress with the factual basis for future oversight or policy changes.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The statute is short and narrowly targeted: it orders MedPAC to deliver two focused reports to Congress about PBM agreements tied to prescription drug plans and MA–PD plans. The obligation is conditional—MedPAC must wait until the Secretary makes the relevant data available—and the initial report is tied to a specific calendar trigger (the first March 15 after two years from the Secretary’s data release).
The law spells out the kind of content MedPAC should include, but it leaves the document’s exact scope and method to MedPAC’s judgment and capacity.
Practically, the work will require CMS (the Secretary) to furnish contract-related data to MedPAC in a form suitable for statistical and policy analysis. The law does not define the data fields, format, or frequency; it simply contemplates ‘‘information submitted’’ and asks MedPAC to report on trends, averages, totals, and other figures as practicable.
Those open-ended terms mean the analytic value of the reports will hinge on what CMS discloses and what it allows MedPAC to publish, particularly where contracts contain proprietary pricing or rebate terms.The bill asks MedPAC to go beyond description and to analyze how variation in agreements affects enrollees’ out-of-pocket spending and average pharmacy reimbursement. That requires linking contractual terms to financial outcomes, a nontrivial exercise that will likely demand plan-level claims and payment data, careful case-mix adjustments, and methodological choices about causation versus correlation.
The final report, due two years after the initial submission, is explicitly longitudinal: it must characterize changes over time and update recommendations based on observed market developments.Because MedPAC’s reports are advisory, the statute does not impose new duties on PBMs or plans directly, nor does it create enforcement mechanisms; instead it supplies Congress with information that could support oversight, legislation, or regulatory action. The extent to which confidential commercial material appears in the public reports will shape how actionable the findings are for stakeholders who care about pricing, competition, network adequacy, and beneficiary cost exposure.
The Five Things You Need to Know
The bill requires two MedPAC reports: an initial report and a final report delivered two years apart, both to be submitted to Congress.
The initial report is due on the first March 15 occurring after two years from the date the Secretary makes the relevant data available to MedPAC.
The initial report must, as practicable, present descriptive statistics (trends, averages, totals), analyze differences in agreements and their effects on enrollee out-of-pocket spending and average pharmacy reimbursement, and include recommendations.
The final report must be submitted not later than two years after the initial report and must describe changes over time in the items covered by the first report and include any further recommendations.
The reporting obligation is contingent on the Secretary first providing the data to MedPAC; the bill does not itself mandate disclosure from PBMs or plans to CMS.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title
Establishes the Act’s name as the 'PBM Reporting Transparency Act.' This is purely nominal but signals the law’s narrow transparency purpose rather than regulatory intervention.
MedPAC must analyze PBM agreements and impacts
Directs MedPAC to prepare an initial report focused on agreements between PBMs and prescription drug plans and MA–PD plans. The provision specifies content areas—descriptive trends and patterns, an analysis of contract differences and their effects on enrollee out-of-pocket spending and average pharmacy reimbursement, and recommendations—but does not enumerate data elements or methodologies. Practically, the section creates a deliverable tied to a timing formula dependent on when the Secretary makes the underlying data available, not on a fixed date from enactment.
Two-year follow-up to track changes and update recommendations
Requires a second report from MedPAC two years after the initial submission that documents changes over time in the items analyzed in the first report and provides any additional recommendations. The follow-up emphasizes longitudinal monitoring and signals that Congress expects to see market evolution, but, like the initial report, it leaves analytic choices and the handling of confidential material to MedPAC and the data custodian (the Secretary).
This bill is one of many.
Codify tracks hundreds of bills on Healthcare across all five countries.
Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Congressional committees and oversight staff — they gain a mandated, expert analysis unit (MedPAC) focused on PBM contracting practices tied specifically to Part D and MA–PD, improving the factual record available for legislative or oversight action.
- Medicare beneficiaries and consumer advocates — if MedPAC’s analysis exposes common contract features that increase enrollee out-of-pocket costs, advocates can use the findings to push for reforms or targeted oversight.
- Researchers and policy analysts — the reports should consolidate and summarize otherwise fragmented data, creating a publicly accessible baseline for further academic and policy work.
Who Bears the Cost
- Centers for Medicare & Medicaid Services (the Secretary) — CMS will likely need to identify, prepare, and transmit contract and plan data to MedPAC and may need to invest staff time or systems to protect confidential information while enabling analysis.
- PBMs and plan sponsors — while the law does not compel data disclosure directly from private parties, increased visibility into contracting practices raises reputational and legislative risk and may prompt voluntary or compelled disclosures; they may also face more scrutiny in subsequent oversight or rulemaking.
- MedPAC — the Commission assumes analytic responsibility and associated resource needs (data handling, econometric analysis, redaction procedures), which could require additional funding or reallocation of staff to meet the bill’s expectations.
Key Issues
The Core Tension
The central dilemma is between the public interest in illuminating how PBM contracts influence beneficiary costs and pharmacy payments, and private/commercial interests in keeping contractual and pricing details confidential; the bill pushes for transparency but depends on CMS and MedPAC to navigate legal, practical, and methodological limits that could blunt the reports’ informativeness.
The statute is intentionally procedural and avoids defining the underlying data elements, confidentiality protections, or the Secretary’s obligations for data release. That creates immediate implementation questions: what exactly will CMS provide to MedPAC, in what format, and under what nondisclosure or redaction rules?
Contract terms between PBMs and plans are frequently labeled proprietary; CMS may face legal and operational constraints before transferring granular pricing or rebate information to an external advisory body. Those constraints will directly affect the usefulness and granularity of MedPAC’s findings.
Methodologically, linking contract features to enrollee out-of-pocket spending and pharmacy reimbursement is complex. Plans vary in benefit design, formularies, utilization management, and network arrangements; isolating the effect of PBM contract terms will require access to claims-level data, careful case-mix adjustment, and transparent assumptions about causality.
Finally, because MedPAC’s recommendations are advisory, the statute leaves a gap between analysis and action: Congress or the administration must decide whether and how to act on any findings, and any subsequent policy steps could trigger further stakeholder pushback or litigation over confidentiality and competitive harm.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.