Key Takeaways
- CMS published an RFI seeking input on PBM compensation, affiliate arrangements, and data collection requirements added by Section 6224 of the Consolidated Appropriations Act, 2026, and effective Jan. 1, 2028.
- The RFI focuses on six topics: defining “pharmacy benefit manager” and “affiliate,” clarifying “bona fide service fees,” determining fair market value, pharmacy payment carve-outs, and data collection and reporting.
- Comments are due by 5 p.m. on July 20, 2026.
On June 18, 2026, the Centers for Medicare & Medicaid Services (CMS) published “Request for Information (RFI): Pharmacy Benefit Manager Compensation and Data Collection” to solicit technical input on the services and business practices of pharmacy benefit managers (PBMs) and their affiliates. This RFI focuses narrowly on gathering information to inform two legislative requirements added by Section 6224 of the Consolidated Appropriations Act, 2026 (CAA) that will be effective January 1, 2028: (1) restrictions on the remuneration that PBMs and their affiliates may receive for services in connection with the utilization of covered Part D drugs, including limitations on and the specific legislative definition of “bona fide service fees”; and (2) data reporting requirements.
Section 6224 of the CAA, titled “Modernizing and Ensuring PBM Accountability,” added several new provisions governing PBM reforms to Section 1860D-12 of the Social Security Act (42 U.S.C. 1395w–112). Among other things, beginning in 2028, PBMs and their affiliates will be restricted in the types of remuneration they may receive for services related to the utilization of covered Part D drugs. Permissible remuneration will generally be limited to “bona fide service fees” that meet statutory criteria specific to Section 6224. These criteria are different from the definition of a “bona fide service fee” for purposes of calculating Medicare Best Price.
Under Section 6224, rebates, discounts and other price concessions received by PBMs from drug manufacturers do not violate these new prohibitions on remuneration, so long as they are “fully passed through to a PDP sponsor.” Additionally, PBMs will be required to submit annual reports on drug pricing and other information by July 1 of each year, starting in 2028, covering the prior plan year.
The RFI represents an initial data-gathering step to inform the rulemaking process on only the two specific requirements governing PBM remuneration and data reporting. It organizes its questions around six major topics:
1. Definition of “Pharmacy Benefit Manager”
Focuses on defining the outer bounds of the statutory PBM definition, including what “related services” and additional PBM functions should be captured, and which entities may qualify as PBMs even if they do not identify themselves that way. CMS is also seeking information on intermediary arrangements, including how intermediaries are owned, contracted with and paid, and whether their compensation varies based on utilization, formulary status, rebates, pricing benchmarks, pharmacy channel, or product selection.
2. Definition of “Affiliate”
Seeks to identify which types of entities should be treated as affiliates. CMS is also seeking information on how those entities are owned, contracted with, paid, and compensated, including whether payments vary based on utilization, formulary status, rebates, pricing benchmarks, pharmacy channel, or product selection, as well as how the statutory affiliate definition compares with other federal or state affiliate definitions.
3. Definition of “Bona Fide Service Fee”
The RFI seeks to identify existing PBM and affiliate compensation arrangements that may not qualify as bona fide service fees as defined by Section 6224, including arrangements not tied to actual itemized services or services the paying entity would not otherwise perform or contract for. CMS is also seeking examples of prohibited or potentially problematic fee structures and incentive payments that may differ from the statutory bona fide service fee definition. Under Section 6224, bona fide service fees include “incentive payments” even if the payment does not otherwise meet the definition, so long as the payment is a flat fee at fair market value relating to services “actually performed,” “in connection with the utilization of covered Part D drugs” and meets other requirements deemed appropriate by the Secretary of HHS. This new separate definition of bona fide service fees is different from, and is not as detailed as that set forth in 42 C.F.R. 447.502, for purposes of calculating Medicaid Best Price under 42 C.F.R. 447.505. Under Section 447.502:
Bona fide service fee means a fee paid by a manufacturer to an entity that represents fair market value for a bona fide, itemized service actually performed on behalf of the manufacturer that the manufacturer would otherwise perform (or contract for) in the absence of the service arrangement, and that is not passed on in whole or in part to a client or customer of an entity, whether or not the entity takes title to the drug. The fee includes, but is not limited to, distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative service agreements and patient care programs (such as medication compliance programs and patient education programs).
It is not yet known whether responses to the RFI or CMS itself might recommend incorporating similar details such as whether the fee is or is not passed on to a client/customer, whether title to the drug matters, or whether specific industry practices such as “distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative service agreements and patient care programs” will be included in the new Section 6224 definition.
4. Determination of “Fair Market Value”
Seeks an explanation on how fair market value is currently determined for services provided by PBMs and their affiliates, including the valuation methodologies used and the benefits and limitations of those approaches. CMS is also seeking input on whether fair market value practices vary by entity type and how, if at all, valuation analyses account for PBM market concentration and vertical integration.
5. Pharmacy Payment
Seeks to identify which current pharmacy payment and compensation arrangements do and do not fall within the statutory carve-out outlined in Section 1860D-12(h)(4) of the Social Security Act.
6. Data Collection and Reporting
Seeks to identify what additional data elements, beyond those already required by statute, would help CMS’s implementation and monitoring of Section 6224 provisions.
Notably, CMS has made clear that it is not seeking input through this RFI on other provisions of Section 6224 (e.g., compliance and enforcement mechanisms) or requirements in Section 6223 of the CAA (e.g., related to Part D pharmacy contracting standards and affiliate pharmacy and pharmacy incentive payment reporting requirements).
Comments must be received by 5:00 p.m. on July 20, 2026, referencing file code CMS-4218-NC.
While this RFI may have significant implications for a broad range of Part D supply chain participants (e.g., sponsors, PBMs, PBM affiliates, drug manufacturers, and other Part D supply chain entities), it also presents an important opportunity for stakeholders to shape eventual CMS rulemaking. McGuireWoods is prepared to advise on comment drafting, PBM and affiliate structure analysis, remuneration and fair market value assessments, pharmacy payment review, and implementation planning for the upcoming 2028 requirements, among other legal, regulatory, and operational needs. For questions, contact the authors or a member of the FDA & Life Sciences Practice Group.