Capitals and Washington could mean higher payments to drugstore chains like CVS Health, Walgreens and independent pharmacies across the country. In this photo, a sign is seen outside a Walgreens store in San Pablo, California, U.S., on Tuesday, Oct. 15, 2024. Photographer: David Paul Morris/Bloomberg

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The legislation, which is slowly making its way across states and Washington, could lead to higher payments to drugstore chains like CVS Health, Walgreens, Walmart and independent pharmacies across the country.

Although pharmacies didn’t get what they wanted from Congress in a year-end spending package last week, the door has been opened further for legislation to benefit pharmacies while regulating pharmacy benefit managers (PBMs), even with Republicans in both chambers control Congress and the White House in 2025.

“PBM reform is supported by the majority of both parties, by outgoing President Biden and incoming President Trump,” said B. Douglas Hoey, executive director of the National Community Pharmacists Association, after Congress passed a new brief late last week. Term spending package that did not include PBM reform. “It may be the only issue in Washington on which they agree. Every day they delay reform, another small pharmacy will close or be pushed to the sidelines because of the business practices of large health insurers and their PBM stooges.”

In recent years, pharmacies have closed across the country, which their owners blame in part on reimbursement shortfalls from the PBMs that pay them. PBMs, which act as intermediaries between drug companies and consumers when purchasing drugs, manage drug benefits for employers and government health plans, including Medicaid coverage for poor Americans and Medicare benefits for seniors. In these roles, PBMs decide which pharmacists and pharmacies get paid to dispense prescription medications.

But PBMs have come under fire in recent years as the public, taxpayers and Congress question whether they are passing along as many savings to health plan enrollees as they should. And this increased scrutiny has already led to increasing numbers of state legislatures and increasing payments to pharmacies.

PBM leaders understand that change is coming.

“We’re seeing the regulatory landscape change a lot,” Jason Borschow, CEO of Abarca, an independent pharmacy benefit manager, told healthcare executives at the Forbes Healthcare Summit in New York earlier this month. “It’s already happening with Medicaid, Medicare is on its way and obviously in a free market, kind of commercial space. The individual market sector is likely the last to be regulated, but we expect the regulations to be implemented and PBM business practices to be regulated by the federal government in addition to state governments.”

Among the areas where Democrats and Republicans in Congress have reached agreement are provisions that would require PBMs to charge pharmacies “in addition to the state fee for dispensing services for all Medicaid managed care programs in all 50 states.” to be reimbursed. ” the National Community Pharmacists Association, which represents more than 18,900 pharmacies, has said. “It would eliminate spread pricing and pay PBMs a flat administrative fee across all Medicaid managed care programs. The provision will save taxpayers approximately $1 billion over the next decade.”

Since CVS also owns a PBM, Caremark, it’s unclear how much potential reforms would hurt this company financially.

But other regulations moving forward in states would certainly benefit the thousands of pharmacists and retail pharmacies owned by CVS, as well as other pharmacies.

For example, dozens of states are enacting laws that expand the role of pharmacists in prescribing certain medications. This so-called “test-to-treat” legislation gives pharmacists prescribing status.

At the Forbes Healthcare Summit, Walgreens Chief Pharmacy Officer Rick Gates said pharmacists had already been testing for a range of illnesses, including Covid-19, and then prescribing medications.

“You test positive for Covid, and we can actually prescribe a medication and give you your medication right away when you’re in the store,” Gates said. “The same goes for the flu. It could be urinary tract infections. It could be many other things. But I think that’s exactly the precipice where pharmacy can really have a bigger impact.”