Pharmacy benefit managers (PBMs) have a central role in the drug distribution chain and serve as intermediaries in administering the prescription drug benefit on behalf of payers. In recent years, some policymakers and stakeholder groups have identified the role of PBMs in the Medicaid drug distribution chain as a potential driver of increased drug spending. The Consolidated Appropriations Act, 2026 (P.L. 119-75), signed into law on February 3, 2026, included several provisions regulating PBM operations in private insurance and Medicare Part D; however, no Medicaid-specific provisions were included.
Staff presented background information from an upcoming issue brief describing PBMs and their role within Medicaid. The issue brief begins with a summary of clinical and operational services PBMs provide their clients, as well as PBMs’ sources of revenue. The brief then outlines stakeholder concerns associated with PBMs and summarizes recent federal and state policy efforts to manage and oversee PBM activities and address these issues.