Federal Plan PBMs Must Pass Drug Rebates to Patients at Checkout and Face $10,000 Fines for Steering

This bill, titled the Pharmacists Fight Back Act, tackles the opaque world of Pharmacy Benefit Managers (PBMs) by imposing strict new payment and practice rules on those administering prescription drug benefits for federal employee health plans. Specifically, it mandates that PBMs must calculate patient copayments based on the drug’s net cost after manufacturer rebates are applied at the point of sale, effectively lowering what federal employees pay out-of-pocket immediately. It also sets a formula for how PBMs must reimburse in-network pharmacies, requiring them to pay the national average drug acquisition cost plus a small, fixed margin (the lesser of 4% or $50), along with a professional dispensing fee tied to the state’s Medicaid rate.

Your Copay Just Got a Reality Check

The biggest win for federal employees in this bill is the mandated rebate pass-through (SEC. 2). Right now, when you pick up a prescription, your copay or coinsurance is usually based on the drug’s high list price, even though the PBM receives a substantial rebate later from the manufacturer. This bill requires that PBMs apply that rebate before you pay, meaning your coinsurance is based on the drug’s actual cost after the discount. For someone taking an expensive specialty drug—say, a federal worker managing an autoimmune condition—this could mean the difference between a $100 copay and a $25 copay right at the pharmacy counter. This is a crucial change for cash flow, especially for families managing chronic conditions.

Leveling the Playing Field for Local Pharmacies

The legislation also takes aim at PBM practices that critics say harm independent pharmacies. It explicitly bans PBMs from “steering” patients toward specific pharmacies, including their own affiliated mail-order or retail operations (SEC. 2). This means PBMs can’t use subtle tactics—like denying certain delivery options or requiring restrictive accreditation—to funnel business away from your local community pharmacy. For a pharmacist running a small business, these anti-steering provisions offer vital protection against powerful corporate competitors. Furthermore, the mandatory reimbursement floor, which ties payment to the national average acquisition cost plus a set margin and a state Medicaid dispensing fee, provides financial stability, ensuring pharmacies aren't reimbursed at rates below the cost of the drug itself.

The Enforcement Hammer: Fines and Debarment

This bill doesn’t just ask PBMs to behave; it backs up the rules with real consequences. If a PBM violates any of these new requirements—like steering patients or reducing a pharmacy’s claim after it’s been processed (clawbacks)—the Office of Personnel Management (OPM) must impose a $10,000 civil monetary penalty per violation (SEC. 2). Crucially, if a PBM racks up 10 or more penalties within a 10-year period, OPM is required to debar them—meaning that PBM is permanently banned from administering prescription drug benefits for federal employee health plans. This is a major regulatory threat aimed at ensuring compliance.

The Cost Question

While the bill offers clear benefits for patients and community pharmacies, there’s a financial ripple effect to consider. Currently, PBMs often use the massive rebates they negotiate to lower premiums for the health plans they serve. By requiring the rebate to go directly to the patient at the point of sale, the PBMs lose that money. The concern here is that PBMs and health plan carriers might pass these costs back to the federal employee health program—and ultimately, the federal government—by raising administrative fees or demanding higher overall payments to offset the lost rebate revenue. The question is whether the increased transparency and reduced patient costs will justify a potential increase in the overall cost of the federal employee health plan program.