CMS Seeks Input on New Standards for Medicare Part D Pharmacy Contracts to Enhance Access and Fairness
The Centers for Medicare & Medicaid Services (CMS) has initiated a critical process to redefine the landscape of pharmacy participation in Medicare Part D, issuing a Request for Information (RFI) on September 24, 2026. This RFI, designated CMS-4217-NC, is a direct response to Section 6223(a) of the Consolidated Appropriations Act, 2026 (CAA, 2026), which mandates the establishment of 'reasonable and relevant' standards for pharmacy contract terms and conditions under the federal prescription drug benefit program. The goal is to ensure broader pharmacy access and choice for Medicare beneficiaries, a long-standing concern among patient advocacy groups and independent pharmacies. Interested parties have until November 23, 2026, to submit their perspectives, which will inform future rulemaking by the Secretary of Health and Human Services before the standards take effect for plan years beginning January 1, 2029.
Background and Legislative Mandate
Medicare Part D, established by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, relies on private Part D plan sponsors to administer prescription drug benefits. While existing regulations require these sponsors to contract with any pharmacy meeting their standard terms, and that these terms be 'reasonable and relevant,' CMS has historically provided limited specific guidance on what constitutes such reasonableness. The CAA, 2026 addresses this regulatory gap directly, empowering the Secretary of HHS to develop explicit standards. This legislative intervention underscores a growing recognition of the impact that opaque or potentially restrictive contract terms can have on pharmacy networks, particularly smaller or independent pharmacies, and ultimately on beneficiary access to medications.
Key Areas of Inquiry: Reimbursement and Dispensing Fees
The RFI delves deeply into the financial mechanisms underpinning pharmacy participation in Part D. CMS seeks comprehensive data on whether current pharmacy reimbursement rates and dispensing fees adequately cover both ingredient costs and operational expenses. Of particular interest are variations in reimbursement across different pharmacy types (for example, retail, mail order, specialty, long-term care), geographic locations (urban versus rural), and drug categories (brand, generic, high-cost, specialty). The agency is specifically asking for input on how Part D reimbursement compares to pharmacies' actual acquisition costs (AQC) for drugs. This includes examining the methodologies and pricing benchmarks used and exploring the feasibility of pharmacies sharing AQC data directly or via wholesalers to enhance transparency.
Another significant focus is the impact of reimbursement policies on pharmacy stocking decisions, especially concerning high-cost specialty drugs. CMS also questions the frequency and transparency of Maximum Allowable Cost (MAC) pricing list updates, along with existing dispute resolution mechanisms. The document addresses the use of 'lesser of' pricing methodologies, including the definition and application of usual and customary (U&C) pricing. Intriguingly, CMS is also exploring the role of advanced technologies, such as machine learning and artificial intelligence, in estimating acquisition costs, signaling a potential shift towards data-driven reimbursement models.
Beyond Base Reimbursement: Complex Contractual Dynamics
The RFI extends its inquiry to more complex contractual dynamics. It asks about the extent to which negotiated prices reported on pharmacy claim responses accurately reflect final reimbursement, especially when compared to aggregate guarantee methodologies like Generic Effective Rate (GER) and Brand Effective Rate (BER) that reconcile payments post-point-of-sale. CMS is seeking to understand the magnitude of these differences and the negotiability of such guarantee parameters. Furthermore, the agency is investigating whether these aggregate guarantee methodologies influence pharmacies' drug selection decisions, particularly for high-cost specialty generics. Specific questions also address terms and conditions related to dispensing covered Part D drugs to 340B patients, and how Part D plan sponsors determine when a claim involves a 340B patient with a lower acquisition cost.
Broader Implications and Overlaps
Beyond the immediate financial terms, the RFI also touches on the broader societal implications, querying the relationship between Part D reimbursement rates and the prevalence of 'pharmacy deserts' in underserved rural and urban areas. This suggests an awareness that financial viability is directly tied to equitable access. Importantly, CMS has asked for input on how the implementation of these new reasonable and relevant standards might overlap with existing PBM disclosure requirements and remuneration restrictions, as outlined in Section 1860D-12(h) of the Act. This acknowledges the intricate role of pharmacy benefit managers in the drug supply chain and the need for a cohesive regulatory approach.
Call for Detailed Input
CMS encourages commenters to provide detailed submissions, including quantitative data, empirical analyses, de-identified contract language, and information disaggregated by various factors such as pharmacy type and geographic location. The agency explicitly requests evidence regarding Part D enrollee access and outcomes, aiming to ground its future standards in tangible impacts on beneficiaries.
