This part sets rules for drug middlemen in Medicare plans, starting with plan year 2028. They may take only flat service fees, must report each year on every drug, and must sit for an audit the plan picks. Money taken against the rules must be handed back. Two studies and $134,000,000 go with it.
The document says “shall not”Who acts: pharmacy benefit managersHow: statuteSec. 6224 in the PDF
What the document says
“The pharmacy benefit manager and any affiliate of such pharmacy benefit manager shall not derive any remuneration with respect to any services provided on behalf of any entity or individual, in connection with the utilization of covered part D drugs, from any such entity or individual other than bona fide service fees, subject to clauses (ii) and (iii).”
Subsection (a) of section 6224 adds a new subsection (h) to section 1860D-12 of the Social Security Act. For plan years beginning on or after January 1, 2028, a contract with a sponsor must provide that any pharmacy benefit manager acting for the sponsor has a written agreement to meet the listed requirements. The first is that neither the manager nor its affiliates take any payment for part D work other than bona fide service fees.
What the document actually says
“The pharmacy benefit manager and any affiliate of such pharmacy benefit manager shall not derive any remuneration with respect to any services provided on behalf of any entity or individual, in connection with the utilization of covered part D drugs, from any such entity or individual other than bona fide service fees, subject to clauses (ii) and (iii).”
That sentence, in plain words
The drug middleman and its related firms may take only true service fees. That holds for all work they do on part D drugs.
What this is about
A middleman sits between the plan, the drug maker and the pharmacy. It has been paid in ways tied to a drug's price. This says it may be paid only for work done.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “means”Who acts: Secretary of Health and Human ServicesHow: statuteSec. 6224 in the PDF
What the document says
“shall be deemed a `bona fide service fee' (even if such payment does not otherwise meet the definition of such term under paragraph (7)(B)) if such payment is a flat dollar amount, is consistent with fair market value (as specified by the Secretary), is related to services actually performed by the pharmacy benefit manager”
An incentive payment, as the Secretary determines, made by a sponsor to a manager or its affiliate is treated as a bona fide service fee where it is a flat dollar amount, is consistent with fair market value as the Secretary specifies, relates to services actually performed for the sponsor in connection with part D drugs, and meets any further requirements the Secretary sets.
What the document actually says
“shall be deemed a `bona fide service fee' (even if such payment does not otherwise meet the definition of such term under paragraph (7)(B)) if such payment is a flat dollar amount, is consistent with fair market value (as specified by the Secretary), is related to services actually performed by the pharmacy benefit manager”
That sentence, in plain words
Such a payment counts as a true service fee. It must be a flat sum. It must match a fair market price. It must be for work really done.
What this is about
A flat sum does not move with a drug's price. So it does not push the middleman toward costly drugs. That is the point of the test.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall not”Who acts: pharmacy benefit managersHow: statuteSec. 6224 in the PDF
What the document says
“even if such price concessions are calculated as a percentage of a drug's price, shall not be considered a violation of the requirements of clause (i) if they are fully passed through to a PDP sponsor and are compliant with all regulatory and subregulatory requirements related to direct and indirect remuneration”
Rebates, discounts and other price concessions a manager or affiliate receives from manufacturers do not violate the fee rule, even where they are figured as a percentage of a drug's price, so long as they are fully passed through to the sponsor and comply with the direct and indirect remuneration requirements, including where a sponsor is acting as its own manager.
What the document actually says
“even if such price concessions are calculated as a percentage of a drug's price, shall not be considered a violation of the requirements of clause (i) if they are fully passed through to a PDP sponsor and are compliant with all regulatory and subregulatory requirements related to direct and indirect remuneration”
That sentence, in plain words
A cut of a drug's price does not break the rule above. It must be handed on to the plan in full. It must also follow the other rules.
What this is about
A rebate is money a drug maker gives back. If the middleman keeps it, it is income. If it goes to the plan, the plan can lower costs.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: Secretary of Health and Human Services, Inspector General of the Department of Health and Human ServicesHow: statuteSec. 6224 in the PDF
What the document says
“The Secretary, in consultation with the Office of the Inspector General, shall review whether remuneration under such arrangements is consistent with fair market value (as specified by the Secretary) through reviews and assessments of such remuneration, as determined appropriate.”
Parts of the payment arrangements between managers or their affiliates and other entities in the dispensing or use of part D drugs, including sponsors, manufacturers and pharmacies, are subject to review by the Secretary in consultation with the Office of the Inspector General. The Secretary and that Office must review whether the payments are consistent with fair market value.
What the document actually says
“The Secretary, in consultation with the Office of the Inspector General, shall review whether remuneration under such arrangements is consistent with fair market value (as specified by the Secretary) through reviews and assessments of such remuneration, as determined appropriate.”
That sentence, in plain words
The health chief must check whether these payments match a fair market price. The department watchdog helps with the check.
What this is about
A fee can be flat and still be far too large. Then it is income by another name. The review is meant to catch that.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: pharmacy benefit managersHow: statuteSec. 6224 in the PDF
What the document says
“The pharmacy benefit manager shall disgorge any remuneration paid to such pharmacy benefit manager or an affiliate of such pharmacy benefit manager in violation of this subparagraph to the PDP sponsor.”
The manager must hand over to the sponsor any payment taken by it or an affiliate in violation of the fee rule. It must also have a written agreement with each affiliate under which the affiliate identifies and hands over such payments, and must attest that it has entered such an agreement.
What the document actually says
“The pharmacy benefit manager shall disgorge any remuneration paid to such pharmacy benefit manager or an affiliate of such pharmacy benefit manager in violation of this subparagraph to the PDP sponsor.”
That sentence, in plain words
The drug middleman must hand back money it took against this rule. It goes to the plan. That covers money taken by its related firms too.
What this is about
To disgorge is to give up money already taken. The plan then passes it on to the government. That is set out further down.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: pharmacy benefit managersHow: statuteSec. 6224 in the PDF
What the document says
“define, interpret, and apply, in a fully transparent and consistent manner for purposes of calculating or otherwise evaluating pharmacy benefit manager performance against pricing guarantees or similar”
The manager must define, interpret and apply terms such as generic drug, brand name drug, specialty drug, rebate and discount in a fully transparent and consistent way when its performance is measured against pricing guarantees, with generic drug and brand name drug consistent with section 423.4 of title 42 of the Code of Federal Regulations. It must identify any drugs, claims or price concessions excluded from a guarantee, and where a guarantee uses a benchmark other than wholesale acquisition cost, must provide an equivalent based on that cost.
What the document actually says
“define, interpret, and apply, in a fully transparent and consistent manner for purposes of calculating or otherwise evaluating pharmacy benefit manager performance against pricing guarantees or similar”
That sentence, in plain words
The middleman must set out what its key words mean. It must use them the same way every time. That matters when its promises on price are scored.
What this is about
A promise to hold down costs turns on how words are read. If the middleman can move a drug from one group to another, the promise means little.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: pharmacy benefit managersHow: statuteSec. 6224 in the PDF
What the document says
“Not later than July 1 of each year, beginning in 2028, the pharmacy benefit manager shall submit to the PDP sponsor, and to the Secretary, a report, in accordance with this subparagraph, and shall make such report available to such sponsor at no cost to such sponsor in a format specified by the Secretary under paragraph (5).”
Each year from 2028, by July 1, the manager must report to the sponsor and the Secretary on the previous plan year, at no cost to the sponsor. The report must list every covered drug dispensed with its names and National Drug Code, counts of enrollees, claims and dosage units, claims by dispensing channel, acquisition cost, wholesale price, enrollee out-of-pocket spending, rebates and other remuneration, average pharmacy reimbursement, the National Average Drug Acquisition Cost, and manufacturer-derived revenue retained. Where the manager owns a pharmacy it must give shares dispensed by affiliates and cost ranges at affiliate and non-affiliate pharmacies. It must set out generics and biosimilars not covered or placed on higher tiers, with a written justification, plus gross and net spending, revenue retained, benefit designs steering enrollees to affiliate pharmacies, broker and consultant compensation, a list of affiliates, and a summary on a standard template.
What the document actually says
“Not later than July 1 of each year, beginning in 2028, the pharmacy benefit manager shall submit to the PDP sponsor, and to the Secretary, a report, in accordance with this subparagraph, and shall make such report available to such sponsor at no cost to such sponsor in a format specified by the Secretary under paragraph (5).”
That sentence, in plain words
Each year by July 1 the middleman must send a report. It goes to the plan and to the health chief. The plan pays nothing for it.
What this is about
The report is long. It covers every drug the plan paid for. It shows what the drug cost, what people paid, and what the middleman kept.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: pharmacy benefit managersHow: statuteSec. 6224 in the PDF
What the document says
“not later than 30 days after the finalization of any contract or agreement between such pharmacy benefit manager or an affiliate of such pharmacy benefit manager and a manufacturer”
Within 30 days of finalizing an agreement with a manufacturer that makes rebates, discounts, payments or other financial incentives on one drug contingent on coverage, formulary placement or utilization management conditions on other drugs, the manager must give the sponsor a written explanation. It must name the manufacturer and all drugs covered, describe the terms at a high level, and be certified by the manager's Chief Executive Officer, Chief Financial Officer or General Counsel, or by someone reporting directly to one of them.
What the document actually says
“not later than 30 days after the finalization of any contract or agreement between such pharmacy benefit manager or an affiliate of such pharmacy benefit manager and a manufacturer”
That sentence, in plain words
The middleman has 30 days after a deal with a drug maker is signed. Then it must explain that deal in writing.
What this is about
Some deals tie one drug to another. Money on one turns on how the plan treats the rest. The plan needs to know that is happening.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: pharmacy benefit managers, prescription drug plan sponsorsHow: statuteSec. 6224 in the PDF
What the document says
“The PDP sponsor shall have the right to select an auditor. The pharmacy benefit manager shall not impose any limitations on the selection of such auditor.”
At least once a year, at the sponsor's request, the manager must allow an audit of its compliance with the written agreement and the accuracy of what it reported. The sponsor picks the auditor and the manager may not limit that choice. The manager must give the auditor all records, data, contracts and other information needed, within six months of the audit's start, and must answer further requests within 30 days. It is responsible for information held by its affiliates.
What the document actually says
“The PDP sponsor shall have the right to select an auditor. The pharmacy benefit manager shall not impose any limitations on the selection of such auditor.”
That sentence, in plain words
The plan picks who does the audit. The middleman may not put limits on that choice.
What this is about
An audit is only worth as much as the auditor is free. If the middleman picked, it could pick a friendly one. The plan picks instead.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: prescription drug plan sponsorsHow: statuteSec. 6224 in the PDF
What the document says
“disgorge to the Secretary any amounts disgorged to the PDP sponsor by a pharmacy benefit manager under paragraph (1)(A)(v);”
Each sponsor must hand to the Secretary any amounts a manager handed to it, must require in a written agreement that the manager or affiliate reimburse the sponsor for any civil money penalty imposed because the manager failed to meet the requirements, and must require that the manager or affiliate be subject to punitive remedies for breach of contract for such a failure.
What the document actually says
“disgorge to the Secretary any amounts disgorged to the PDP sponsor by a pharmacy benefit manager under paragraph (1)(A)(v);”
That sentence, in plain words
Money the middleman hands to the plan must then go to the health chief. The plan does not keep it.
What this is about
The plan must also make the middleman repay any fine the plan takes for the middleman's fault. The deal must carry that promise.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall not”Who acts: Secretary of Health and Human Services, prescription drug plan sponsorsHow: statuteSec. 6224 in the PDF
What the document says
“The Secretary shall make available and maintain a mechanism for manufacturers, PDP sponsors, pharmacies, and other entities that have contractual relationships with pharmacy benefit managers or affiliates of such pharmacy benefit managers to report, on a confidential basis,”
The Secretary must provide and keep a mechanism through which manufacturers, sponsors, pharmacies and other entities under contract with a manager or affiliate can report alleged violations confidentially. Consistent with applicable federal or state law, a sponsor may not retaliate against anyone for reporting, or coerce, intimidate, threaten or interfere with their ability to report.
What the document actually says
“The Secretary shall make available and maintain a mechanism for manufacturers, PDP sponsors, pharmacies, and other entities that have contractual relationships with pharmacy benefit managers or affiliates of such pharmacy benefit managers to report, on a confidential basis,”
That sentence, in plain words
The health chief must set up and keep a way to report. Drug makers, plans and pharmacies may use it. What they send stays private.
What this is about
These firms all do business with the middleman. Speaking up could cost them that business. Keeping the report private is what makes it possible.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: prescription drug plan sponsorsHow: statuteSec. 6224 in the PDF
What the document says
“Each PDP sponsor shall furnish to the Secretary (at a time and in a manner specified by the Secretary) an annual certification of compliance with this subsection, as well as such information as the Secretary determines necessary to carry out this subsection.”
Each sponsor must give the Secretary an annual certification that it complies with the new subsection, in the time and manner the Secretary specifies, along with any information the Secretary finds necessary. The Secretary may implement this by program instruction or otherwise.
What the document actually says
“Each PDP sponsor shall furnish to the Secretary (at a time and in a manner specified by the Secretary) an annual certification of compliance with this subsection, as well as such information as the Secretary determines necessary to carry out this subsection.”
That sentence, in plain words
Each year the plan must certify to the health chief that it follows this part. The chief says when and how.
What this is about
A certification is a signed claim, made under threat of penalty. It puts the plan on record. That gives the agency something to act on.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “may not be construed”Who acts: Secretary of Health and Human ServicesHow: statuteSec. 6224 in the PDF
What the document says
“prohibiting flat dispensing fees or reimbursement or payment for ingredient costs (including customary, industry-standard discounts directly related to drug acquisition that are retained by pharmacies or wholesalers) to entities that acquire or dispense prescription drugs; or”
The new subsection states that nothing in it bars flat dispensing fees or payment for ingredient costs, including customary industry-standard discounts related to drug acquisition kept by pharmacies or wholesalers, and that nothing in it changes regulatory or subregulatory requirements on pharmacy payment, reimbursement or dispensing fees.
What the document actually says
“prohibiting flat dispensing fees or reimbursement or payment for ingredient costs (including customary, industry-standard discounts directly related to drug acquisition that are retained by pharmacies or wholesalers) to entities that acquire or dispense prescription drugs; or”
That sentence, in plain words
Nothing here bars a flat fee for filling a prescription. Nothing here bars paying a pharmacy back for what a drug cost it.
What this is about
The rules above are aimed at the middleman. A pharmacy still has to be paid for its work and its stock. This says so plainly.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: Secretary of Health and Human ServicesHow: statuteSec. 6224 in the PDF
What the document says
“Not later than June 1, 2027, the Secretary shall specify standard, machine-readable formats for pharmacy benefit managers to submit annual reports required under paragraph (1)(C)(i).”
By June 1, 2027 the Secretary must specify standard machine readable formats for the annual reports. The Secretary may implement this by program instruction or otherwise.
What the document actually says
“Not later than June 1, 2027, the Secretary shall specify standard, machine-readable formats for pharmacy benefit managers to submit annual reports required under paragraph (1)(C)(i).”
That sentence, in plain words
By June 1, 2027 the health chief must set the form these reports take. A computer must be able to read them.
What this is about
A report that comes as loose pages cannot be searched or added up. A set form makes the data usable.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall not”Who acts: Secretary of Health and Human Services, prescription drug plan sponsorsHow: statuteSec. 6224 in the PDF
What the document says
“Information disclosed by a pharmacy benefit manager, an affiliate of a pharmacy benefit manager, a PDP sponsor, or a pharmacy under this subsection that is not otherwise publicly available or available for purchase shall not be disclosed by the Secretary or a PDP sponsor receiving the information, except that the Secretary may disclose the information for the following purposes:”
Information disclosed under the new subsection that is not otherwise public or available for purchase may not be released by the Secretary or a sponsor, except as the Secretary finds necessary to carry out part D, or to the Comptroller General, the Director of the Congressional Budget Office, the Executive Director of the Medicare Payment Advisory Commission, the Attorney General for oversight and enforcement, or the Inspector General. Those officials may not report in a way that identifies a specific firm or plan, or that identifies contract prices, rebates or discounts for specific drugs in a way that could identify the parties or the drugs.
What the document actually says
“Information disclosed by a pharmacy benefit manager, an affiliate of a pharmacy benefit manager, a PDP sponsor, or a pharmacy under this subsection that is not otherwise publicly available or available for purchase shall not be disclosed by the Secretary or a PDP sponsor receiving the information, except that the Secretary may disclose the information for the following purposes:”
That sentence, in plain words
What these firms hand over stays private. The health chief and the plan may not give it out. The list that follows sets out the few exceptions.
What this is about
The data holds contract prices that firms guard closely. The named offices may see it to do their work. They may not name names in public.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
“Such term includes any person or entity that carries out one or more of the activities described in the preceding sentence, irrespective of whether such person or entity calls itself a `pharmacy benefit manager'.''.”
The new subsection defines affiliate to cover any entity related in any ownership structure to a manager or sponsor, or acting as its contractor, principal or agent in the listed functions. A bona fide service fee must be a flat dollar amount reflecting fair market value for an itemized service actually performed, not passed on to a client, and not based on drug price, on the amount of rebates or other remuneration, on coverage or formulary placement decisions or referral volume, or on anything else the Secretary bars. A pharmacy benefit manager is any person or entity that negotiates prices or purchases as a group for a sponsor or plan, or manages the drug benefit, whatever it calls itself.
What the document actually says
“Such term includes any person or entity that carries out one or more of the activities described in the preceding sentence, irrespective of whether such person or entity calls itself a `pharmacy benefit manager'.''.”
That sentence, in plain words
The term covers anyone who does one or more of the things named above. It does not matter what the firm calls itself.
What this is about
A rule aimed at a job title is easy to slip. A firm just picks a new name. This one is aimed at what the firm actually does.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: Centers for Medicare & Medicaid Services, Inspector General of the Department of Health and Human ServicesHow: statuteSec. 6224 in the PDF
What the document says
“``(G) Requirements relating to pharmacy benefit managers.--For plan years beginning on or after January 1, 2028, section 1860D-12(h).''.”
Section 6224 applies the new subsection to MA-PD plans through section 1857(f)(3) of the Social Security Act, for plan years beginning on or after January 1, 2028, and provides that chapter 35 of title 44 does not apply to its implementation. It appropriates $113,000,000 to the Centers for Medicare and Medicaid Services Program Management Account and $20,000,000 to the Inspector General of the Department of Health and Human Services, each for fiscal year 2026 and to remain available until expended.
What the document actually says
“``(G) Requirements relating to pharmacy benefit managers.--For plan years beginning on or after January 1, 2028, section 1860D-12(h).''.”
That sentence, in plain words
For plan years that start on or after January 1, 2028, one more rule applies. It is the one set out above.
What this is about
The rules first covered stand-alone drug plans. This brings in the bigger plans that include drug coverage. Money for the work is set out too.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: Comptroller General of the United StatesHow: statuteSec. 6224 in the PDF
What the document says
“Not later than 2 years after the date of enactment of this section, the Comptroller General shall submit to Congress a report containing the results of the study conducted under paragraph (1), together with recommendations for such legislation and administrative action as the Comptroller General determines appropriate.”
Subsection (b) of section 6224 requires the Comptroller General to study compensation and payment structures tied to a drug's price across the retail prescription drug supply chain in part D, covering their type, size and prevalence among managers, plans, wholesalers, pharmacies, manufacturers, brokers and others, business models, differences between affiliated and unaffiliated firms, potential conflicts of interest, changes over time and across market segments, and the effects on federal health programs and beneficiaries. The report is due to Congress within two years of enactment.
What the document actually says
“Not later than 2 years after the date of enactment of this section, the Comptroller General shall submit to Congress a report containing the results of the study conducted under paragraph (1), together with recommendations for such legislation and administrative action as the Comptroller General determines appropriate.”
That sentence, in plain words
Within two years a watchdog office must send Congress a report on the study. It must add what it thinks Congress or the agency should do.
What this is about
Fees set as a share of a drug's price run through the whole chain. The study maps where they are and what they do.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall”Who acts: Medicare Payment Advisory CommissionHow: statuteSec. 6224 in the PDF
What the document says
“The Medicare Payment Advisory Commission shall submit to Congress the following reports:”
Subsection (c) of section 6224 requires the Medicare Payment Advisory Commission to submit an initial report to Congress on agreements with pharmacy benefit managers, by the first March 15 falling after two years from the date the Secretary makes the data available, describing trends and patterns, differences between agreements and their effects on enrollee out-of-pocket spending and pharmacy reimbursement, and any recommendations. A final report on changes over time is due two years after the initial one. It appropriates $1,000,000 for fiscal year 2026 for the work.
What the document actually says
“The Medicare Payment Advisory Commission shall submit to Congress the following reports:”
That sentence, in plain words
An advisory group must send Congress the reports named next.
What this is about
The group advises Congress on this program. It gets the new data. The first report comes about two years after the data arrives.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The main things the section does: bar income other than bona fide service fees with its exceptions, require disgorgement and affiliate agreements, require transparency about pricing guarantees, require an annual report to the sponsor and the Secretary, require written explanations of manufacturer agreements, grant audit rights, set enforcement duties and an anti-retaliation rule, require annual certification, state rules of construction, require standard formats, set confidentiality limits, define the key terms, apply the rules to MA-PD plans, appropriate funding, and require a GAO study and two MedPAC reports.
The contents of the annual report, item by item. Subclauses (I) through (XI) run to many dozens of data points and are recorded in summary.
The section amends the Social Security Act and points at the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act and several regulations. None is indexed here.
