The drug pricing regulatory and legislative landscape continues to evolve rapidly at both federal and state levels. Below, we highlight significant changes that occurred between December 19, 2025, and February 20, 2026 (per the CarelonRx Q1 2026 State and Federal Regulatory and Legislative Activity Update, dated 2026-03-13). Download the full Q1 2026 Regulatory and Legislative Activity Update .
Federal regulatory activity
Medicare
- Most Favored Nation (MFN) inflation rebate models: (December 19, 2025) Centers for Medicare and Medicaid Services (CMS) proposed two mandatory models — GLOBE (Part B; potential start October 1, 2026) and GUARD (Part D; potential start January 1, 2027) — to test alternative approaches to inflation rebate calculations, with model periods running through 2031.
- BALANCE Model: (December 23, 2025) CMS announced a new program and invited drug companies to apply for the BALANCE Model to expand access to certain GLP-1s and related lifestyle interventions across Medicare and Medicaid. Medicaid coverage could begin May 2026 and the Part D component could launch January 2027.
- Calendar Year 2027 Medicare Advantage and Medicare Part D Advance Notice: (January 26, 2026) CMS outlined potential updates to Medicare payment policies, including changes to how prescription drug costs are reflected in plan payments and how different types of Medicare drug coverage are accounted for.
- Medicare Drug Price Negotiation Program: (January 27, 2026) CMS selected 15 high-cost drugs for the third negotiation cycle, and identified one previously negotiated drug for its first renegotiation. Negotiations occur in 2026, with negotiated prices effective January 1, 2028.
Commerical market
- PBM Fee Disclosure Proposed Rule: (January 29, 2026) The U.S. Department of Labor proposed a rule that would require providers of PBM services and affiliated brokerage/ consulting providers to disclose compensation information to fiduciaries of self-insured Employee Retirement Income Security Act (ERISA) group health plans.
General drug updates
- White House affordability framework: (January 15, 2026) The Administration released a legislative framework focused on affordability and transparency, including proposals to codify pricing, expand access for certain products, enhance transparency, and restrict certain PBM payments to brokers.
- Supply chain and domestic sourcing: (January 26, 2026) CMS proposed options to strengthen American-made supply chains for Personal Protective Equipment (PPE) and essential medicines.
- Direct-to-consumer (DTC) program oversight: (January 27, 2026) The Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a request for information (RFI) on potential updates to Anti-Kickback Statute safe harbors for DTC drug programs and released guidance describing key safeguards.
- TrumpRx: (February 5, 2026) The White House launched TrumpRx, a website linking consumers to manufacturer DTC pricing platforms. It requires a prescription and does not accept insurance.
Tariffs and trade agreements
Supreme Court tariff ruling and pharma Section 232 review (February 20, 2026):
- The U.S. Supreme Court ruled 6–3 that President Donald Trump did not have authority under the International Emergency Economic Powers Act to impose broad “reciprocal” tariffs on imports from most countries; the decision invalidated those global tariffs (10–50%) issued under that emergency law.
- The Administration launched a Section 232 review of pharmaceutical imports (finished drugs and key ingredients).
- On February 20, the President used a different authority under the Trade Act of 1974 to impose a temporary tariff on select imports; pharmaceuticals and pharmaceutical ingredients are exempt.
Congressional activity
Legislation
- Break Up Big Medicine Act: Senators Elizabeth Warren and Josh Hawley introduced bipartisan legislation targeting consolidation and vertical integration across health insurers, PBMs, medical providers, management services organizations, pharmacies, and prescription drug or medical device wholesalers.
- Consolidated Appropriations Act, 2026: (signed February 3, 2026) Establishes new national PBM standards in commercial employer plans and Medicare, including reporting for transparency and 100% pass-through of manufacturer rebates/fees/discounts to ERISA-governed plans.
Medicare Part D provisions
Highlights include:
- Delinking compensation: (effective 2028) Limits PBM compensation to flat, fair-market-value bona fide service fees and prohibits remuneration tied to drug price, rebates, or volume.
- Low-income cost sharing: (effective 2028) Establishes $0 cost sharing for generics for certain low-income beneficiaries.
- Any Willing Pharmacy: (effective 2029) Requires admission of pharmacies meeting “reasonable and relevant” standards established by HHS.
State legislative activity
- Emerging issues: PBM legislative volume (as of February 17, 2026) was 549 PBM-related bills introduced across 45 states, plus approximately 650 bills carried over from 2025 sessions. Key issues and emerging trends include PBM business practice reforms (e.g., limits on vertical integration/steering, spread pricing bans, and rebate pass-through), as well as new proposals to apply broadly defined “cash-pay” prescriptions toward member deductibles and cost-sharing limits.
Pending state activity
- Virginia (HB 830/SB 669): Advancing as part of Governor Spanberger’s healthcare affordability package, this PBM reform proposal would require 100% rebate pass-through, offer a delinked fee-based compensation option upon request, expand reporting and direct a study on PBMs.
- Tennessee (SB 2040): Would prohibit direct or indirect PBM ownership of retail, mail-order, and specialty pharmacies (with limited hospital-affiliated carve-outs) and expand state oversight; similar bills are pending or carried over in AZ (SB 1545), OK (HB 3538), NJ, NY, and PA.
- West Virginia (HB 5430 / HB 907 / HB 5109): HB 5430 and HB 907 would prohibit spread pricing and restrict use of a GPO to avoid PBM requirements, while HB 5109 would broaden the definition of “PBM” to include additional entities involved in PBM services or procurement.
Litigation and enforcement
- Arkansas: AHIP and the Arkansas Chamber of Commerce filed amicus briefs supporting PCMA’s legal challenge to Arkansas’ prohibition on PBMs holding pharmacy licenses.
- Florida: Regulators initiated audits of PBMs under Florida’s 2023 law, requesting claims-level data that includes personally identifiable information (PII), raising operational, legal, and patient privacy concerns.
Conclusion
This summary reflects the dynamic changes in drug pricing and regulatory frameworks at federal and state levels, capturing critical issues under review as of March 2, 2026.
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