The Centers for Medicare & Medicaid Services (CMS), a division of the Department of Health and Human Services (HHS), has opened a public comment period for a Request for Information (RFI) concerning pharmacy benefit managers (PBMs). Published in the Federal Register on June 18, 2026, this RFI seeks crucial technical input to guide the implementation of new legislative mandates established by the Consolidated Appropriations Act, 2026 (CAA, 2026). Specifically, the agency is preparing to define and enforce restrictions on PBM remuneration and expand data reporting requirements for Medicare Part D drugs, both slated to take effect in calendar year 2028. This move signals a significant step toward enhanced transparency and accountability within the complex ecosystem of prescription drug benefits.
Background to the RFI
The impetus for this RFI stems directly from Section 6224 of the CAA, 2026, which introduces substantial changes to the Social Security Act. This legislation, titled "Modernizing and Ensuring PBM Accountability," aims to reform PBM practices, particularly regarding their financial dealings and data submission obligations in the Medicare Part D program. While the CAA, 2026, also includes provisions related to compliance, enforcement, and pharmacy contracting standards under Section 6223, this specific RFI narrows its focus to the twin pillars of PBM remuneration restrictions and data collection. CMS's solicitation of public comment underscores its commitment to developing clear and effective regulations that align with the legislative intent while considering the practical realities of the pharmaceutical supply chain. Comments are due by July 20, 2026.
Defining Key Entities: Pharmacy Benefit Manager
A central challenge in regulating PBMs lies in their multifaceted roles and the evolving nature of their services. The RFI highlights Section 1860D-12(h)(7)(C) of the Act, which broadly defines a "pharmacy benefit manager." This definition encompasses any person or entity that, directly or through an intermediary, acts as a price negotiator or group purchaser for a prescription drug plan (PDP) or manages its prescription drug benefits. The Act specifies functions such as claims processing, utilization review, prior authorization, appeals adjudication, pharmacy network contracting, and cost control. Notably, the definition applies "irrespective of whether such person or entity calls itself a 'pharmacy benefit manager'."
CMS is asking stakeholders to clarify what "related services" PBMs typically provide that might not be explicitly listed. They also seek to identify additional functions commonly performed by PBMs. Crucially, the RFI inquires about categories of entities that perform PBM-like functions but do not self-identify as PBMs. This line of questioning suggests CMS is looking to ensure comprehensive coverage under the new regulations, preventing potential loopholes where entities might restructure to avoid oversight. Furthermore, the agency wants detailed information on intermediaries, including their ownership, contractual relationships, services performed, types and sources of payments, and how payments vary based on factors like drug utilization, formulary status, and pricing benchmarks. This detailed inquiry aims to map the intricate financial flows within the PBM ecosystem.
Defining Key Entities: Affiliate
The concept of an "affiliate" is equally critical for the forthcoming remuneration restrictions. Section 1860D-12(h)(7)(A) of the Act broadly defines "affiliate" to include any entity that directly or indirectly owns or is owned by, controls or is controlled by, or is otherwise related in any ownership structure to the PBM or PDP sponsor. It also includes entities acting as a contractor, principal, or agent to the PBM or PDP sponsor for performing pharmacy benefit management functions. This expansive definition means that many entities connected to a PBM could be subject to the new bona fide service fee restrictions.
CMS explicitly lists various entities and asks stakeholders whether they qualify as affiliates under this definition, providing a "why or why not" explanation. These entities include affiliated provider groups, data vendors, group purchasing organizations, mail-order pharmacies, payment facilitators, pharmaceutical relabelers, wholesalers, retail pharmacies, and specialty pharmacies. The RFI also invites suggestions for other potential affiliate types. For each identified affiliate type, CMS seeks granular data on ownership, contractual relationships, services performed, payments received, payment sources, and payment variability. This detailed investigation into affiliate relationships reflects a legislative intent to prevent PBMs from circumventing remuneration restrictions through affiliated entities. The RFI also probes for alignment or differences with existing federal or state definitions of "affiliates" in the healthcare sector, aiming to foster regulatory consistency where appropriate.
Defining a Bona Fide Service Fee
At the heart of the remuneration restrictions is the definition of a "bona fide service fee" (BFSF). Section 1860D-12(h)(7)(B) of the Act provides a stringent definition: a BFSF must reflect fair market value for a bona fide, itemized service actually performed on behalf of an entity. This service must be one that the entity would otherwise perform or contract for independently. Crucially, the fee cannot be passed on, in whole or in part, to a client or customer. A BFSF must be a flat dollar amount, and explicitly "shall not be directly or indirectly based on or contingent upon" drug price, rebate amounts, formulary placement decisions, referral volume, or other methodologies prohibited by the Secretary.
CMS is asking for examples of remuneration agreements with PBMs or affiliates that are not tied to an actually performed service. It also seeks examples where a contracting entity pays for a service from a PBM or affiliate that it would not otherwise perform or contract for itself, thus falling outside the BFSF definition. Furthermore, the agency is interested in identifying examples of fees contingent on amounts or methodologies beyond those explicitly listed in the Act, allowing CMS to expand prohibited practices. The RFI also references an exception under Section 1860D-12(h)(1)(A)(ii), where an "incentive payment" from a PDP sponsor to a PBM or affiliate may be deemed a BFSF even if it does not strictly meet the general definition, provided it meets certain requirements. CMS is soliciting input on these incentive payments and any additional requirements the Secretary might define.
Implications for Medicare Part D
The implementation of these new definitions and restrictions will profoundly impact the financial operations of PBMs and the broader Medicare Part D program. The legislative intent behind CAA, 2026, is to increase transparency, reduce drug costs for beneficiaries, and ensure that PBM compensation is tied to actual services rather than drug prices or formulary choices. By scrutinizing complex financial arrangements between PBMs, PDPs, and their affiliates, CMS aims to prevent practices that may artificially inflate drug costs or create conflicts of interest. The outcome of this RFI will directly shape the forthcoming rulemaking process, determining how PBMs are regulated, how their services are compensated, and ultimately, how prescription drug benefits are administered for millions of Medicare beneficiaries.
