A Long-Awaited Turning Point: Congress Delivers Landmark PBM Reform

As part of the Consolidated Appropriations Act of 2026, Congress passed meaningful pharmacy benefit manager (PBM) reform – a long-standing priority for FMI and our supermarket pharmacy members.

By Peter Matz, Director, Food, Pharmacy & Health Policy, FMI

On Tuesday, Congress delivered the most consequential pharmacy benefit manager (PBM) reforms to date with passage of the Consolidated Appropriations Act of 2026, a major bipartisan government funding package that was signed into law by President Trump on Feb. 3. For supermarket pharmacies and the communities they serve, as well as employers that sponsor health plans, this marks a major and long-awaited step forward.

This outcome reflects years of sustained advocacy by FMI and our members, alongside our many allies, to elevate PBM reform as a bipartisan priority. What began as a focused effort to prohibit retroactive pharmacy “DIR” fees evolved into a broader campaign to address the full range of PBM contracting and reimbursement practices that have increasingly undermined pharmacy viability and patient access. Early on, few policymakers fully understood how PBMs operate, let alone the extent to which their vertical integration and opaque, take-it-or-leave-it contracts distort the system. Progress was incremental and often difficult amid a challenging political environment, but momentum steadily built as these practices came under greater scrutiny from Congress, federal regulators, and the media.

At the center of the PBM overhaul is a landmark Medicare Part D provision directing the Centers for Medicare & Medicaid Services (CMS) to define and enforce what constitutes “reasonable and relevant” PBM contract terms for pharmacies, and to establish a formal appeals process for pharmacies to challenge unfair or non-compliant terms. For the first time, this creates a clear enforcement mechanism to address PBMs’ predatory, take-it-or-leave-it contracting practices that have left pharmacies with no realistic ability to negotiate or dispute egregious contract terms.

For supermarket pharmacies, this reform is a true game-changer. Pharmacies inside grocery stores are among the most accessible and frequently used health care touchpoints in many communities – open nights and weekends, staffed by trusted professionals, and located in stores families rely on every day. In some underserved areas, they are the only access point for vaccinations, medication counseling, or basic preventive care. That’s why their economic viability is not just a business concern; it is central to community health.

Yet, the financial strain facing pharmacy operators underscores why reform could not wait. FMI survey data show that nearly three-quarters of pharmacy businesses are not very profitable or not profitable at all, even as prescription volume continues to rise. Many operators have already reduced hours, cut staffing, or closed locations altogether. These pressures are not the result of inefficiency – they are the predictable outcome of PBM reimbursement and contract structures that no pharmacy, large or small, can sustainably absorb.

In addition to the Medicare Part D reforms, the package includes broader PBM transparency and compensation provisions that will benefit FMI members as employers and health plan sponsors. By increasing visibility into PBM revenue streams, rebate practices, and payment structures, these reforms help ensure PBMs are operating to support lower costs for patients and employers – not simply maximizing their own profits.

While this represents a historic milestone, effective implementation will be critical. FMI looks forward to working with CMS during the regulatory process to help ensure these reforms deliver meaningful, real-world improvements for pharmacies and the patients they serve. And while additional work remains, this week’s action establishes a strong foundation for continued bipartisan progress. FMI remains committed to working with policymakers to build on this momentum and advance further PBM reforms that strengthen pharmacy sustainability, patient access, and community health.