This bill, titled the "PBM Price Transparency and Accountability Act," introduces significant reforms to Medicaid and Medicare programs concerning pharmacy payments and Pharmacy Benefit Manager (PBM) practices. For Medicaid, it mandates the Secretary of Health and Human Services to conduct monthly surveys of retail and applicable non-retail pharmacy drug prices to determine national average drug acquisition cost benchmarks, net of all discounts and rebates. These surveys will differentiate between pharmacy types, and the collected information will be made publicly available, with penalties for non-compliant pharmacies. Furthermore, the bill prohibits the use of non-retail pharmacy pricing information to develop payment methodologies for retail community pharmacies. It also tasks the Inspector General with periodically studying survey data, particularly regarding cost variations and the influence of affiliates or related party transactions. These measures are designed to ensure more accurate and equitable reimbursement for pharmacies. To combat abusive spread pricing in Medicaid, the legislation requires contracts with PBMs or managed care entities to implement a transparent prescription drug pass-through pricing model . Under this model, payments to pharmacies must be limited to ingredient cost and a professional dispensing fee, passed through entirely, and any form of spread pricing by PBMs will not be allowable for federal matching payments. PBMs must also provide detailed cost and payment information to the State and Secretary upon request. For Medicare beneficiaries, the bill aims to assure pharmacy access and choice by requiring Medicare Part D plans to permit any willing pharmacy that meets standard contract terms to participate in their networks. The Secretary will establish standards for what constitutes reasonable and relevant contract terms and conditions, with an enforcement process for pharmacies to report violations, potentially leading to civil monetary penalties for plan sponsors. The legislation also mandates regular reports on essential retail pharmacies , defined by their location in underserved areas and non-affiliation with PBMs, to track trends in reimbursement, network participation, and cost-sharing. This includes publishing a list of these pharmacies and requiring plan sponsors to submit information on their affiliated pharmacies and incentive payments. A core component of the bill is modernizing and ensuring PBM accountability under Medicare. PBMs acting on behalf of Part D plans will be restricted to earning only bona fide service fees , with rebates and discounts required to be fully passed through to plan sponsors. PBMs must disgorge any non-compliant remuneration. New transparency requirements compel PBMs to define and apply terms consistently for pricing guarantees and to submit detailed annual reports to plan sponsors and the Secretary. These reports must include comprehensive data on drug costs, dispensing channels, PBM revenue, and comparisons of costs between affiliated and non-affiliated pharmacies. PBMs must also provide written explanations of contracts with manufacturers that link rebates to formulary placement. To ensure compliance, the bill grants PDP sponsors annual audit rights over PBMs, requiring PBMs to provide all necessary records and data. It also establishes mechanisms for reporting alleged violations and includes anti-retaliation provisions. The Government Accountability Office (GAO) and the Medicare Payment Advisory Commission (MedPAC) are tasked with conducting studies and reports on price-related compensation across the prescription drug supply chain and PBM agreements, respectively. Significant funding is appropriated to the Centers for Medicare & Medicaid Services and the Inspector General for the implementation and oversight of these provisions.