RFI Seeks Input on Medicare Part D’s Pharmacy Contract Standards

On September 24, 2026, the Centers for Medicare & Medicaid Services (CMS) issued a request for information (RFI) seeking input from stakeholders for purposes of establishing “reasonable and relevant” pharmacy contract terms and conditions between pharmacies and Part D plan sponsors under the Medicare prescription drug benefit, effective for plan years starting after January 1, 2029.

This RFI was mandated by Congress in Section 6223(a) of the Consolidated Appropriations Act of 2026 (the “CAA”).

As noted in the RFI, private companies (“Part D Plan Sponsors”) contract with CMS to provide the Medicare Part D benefit through Medicare Advantage plans (“MA-PD plans”) or standalone prescription drug plans. Part D Plan Sponsors must contract with any pharmacy that meets the Part D Plan Sponsor’s standard terms and conditions under 42 CFR § 423.120(a)(8)(i). Existing regulation, § 423.505(b)(18), already requires that these standard terms and conditions include “reasonable and relevant” pharmacy contract terms and conditions, but to date CMS has never defined what the latter means or provided any defining standards.

The CAA changes this and mandates that CMS establish standards to define “reasonable and relevant.”  The driving force behind this legislative change were pharmacy complaints, particularly from smaller independent pharmacies, that they are being reimbursed below cost, making it difficult for them to serve Medicare patients.

The RFI

CMS is seeking input from stakeholders on the following eight topics:

Pharmacy Reimbursement and Dispensing Fees

• This topic includes whether pharmacy reimbursement and dispensing fees paid by Part D Plan Sponsors to network pharmacies sufficiently cover the costs incurred by such pharmacies.
  • CMS is asking detailed questions regarding ingredient cost pricing, dispensing fees, 340B drug costs and reimbursement, aggregative guarantees and post-adjudication adjustments.
  • With regard to 340B, CMS specifically seeks information on Part D pharmacy contract terms and conditions relating to dispensing covered Part D drugs to “340B patients” enrolled in Part D—namely, whether such 340B specific terms and conditions are common, and whether and how Part D plan sponsors determine when a claim is for a 340B patient for which the pharmacy acquisition cost is less than the plan’s negotiated price.

Current Part D Plan and Network Pharmacy Contracting Practices

• This topic is targeted toward existing contracting practices with an aim toward determining how Part D Plan Sponsors and pharmacies can fairly and transparently negotiate in the future.
  • CMS is generally examining the respective leverage that Part D Plan Sponsors, pharmacy benefit managers (PBMs), and pharmacies have in negotiations and whether CMS rules could affect this balance.
  • More specifically, CMS is examining current practices against the backdrop of their effect on competition, enrollee access to Part D drugs and correlation with evidence-based quality metrics, as well as topics including the present use or handling of deemed acceptance or negative-consent provisions, multi-line contracts, dispute resolution and recoupment and suspension.

Trends in Part D Plan Sponsor and Network Pharmacy Contract Terms and Conditions

• This topic focuses on reimbursement methodologies such as maximum allowable cost (MAC) pricing, payment methodologies and models, and relevant terms and conditions.
  • CMS is examining how reimbursement methodologies are evolving, the complexity of pharmacy contracts and connections between Part D and commercial reimbursement.
  • CMS specifically seeks information on impacts of the Inflation Reduction Act of 2022 on Part D pharmacy contracting, including the impact of maximum fair prices (MFPs) under the Medicare Drug Price Negotiation Program on Part D pharmacy reimbursement terms for both selected drugs and non-selected drugs.

Pharmacy Quality and Performance Measures

• This topic centers upon Part D Plan Sponsors’ use of pharmacy quality/performance measures for network pharmacies.
  • CMS is asking whether these measures are applied fairly across types of pharmacies, whether they are risk-adjusted and validated, whether they align with patient outcomes, and whether pharmacies can appeal poor ratings.

Auditing Practices

• This topic addresses Part D Plan Sponsor auditing practices for network pharmacies, including frequency and type of audits; transparency of methodologies; financial and other impacts; extrapolation methods used for recoupment; verification of data; recoupment of erroneous payments; corrective actions; auditing practices as to PBM-affiliated pharmacies and due process provisions.

Limitations

• This topic includes Part D Plan Sponsor restrictions or limitations on the dispensing of covered Part D drugs by network pharmacies (or any subsets of pharmacies), including the nature and prevalence of such restrictions or limitations.
  • CMS is likely examining limiting patient access for certain drugs to certain pharmacies, such as limited distribution programs and narrow specialty drug programs.

Current Regulations and Guidance

• CMS is broadly asking stakeholders, with regard to the topic of pharmacy and plan sponsor contracts, whether there are any other areas in current regulations or Part D program guidance that expose gaps in or require clarification with respect to pharmacy contracting.

Implementation of Standards

• The final topic seeks feedback from stakeholders regarding the operational timelines for the rollout of the changes contemplated by the CAA; what sort of compliance documentation should be required to show compliance with the new standards; model contract terms, conditions, and frameworks for the future of Part D contracts; and criteria to ensure standards are transparent, objective, and enforceable.

Takeaways

Driven by congressional action, the RFI signals a significant shift toward regulatory oversight of industry-negotiated contracts, with the potential to restructure and reform Part D pharmacy economics. Interested stakeholders—which could include Part D Plan Sponsors, PBMs, pharmacies, and Medicare beneficiaries—who wish to submit comments must do so by November 23, 2026, at https://www.regulations.gov/docket/CMS-2026-3037 (or a mail address in the RFI). CMS asks commenters to consider and discuss the following factors and their relevance to the comments that each commenter is submitting:

• Subsets of pharmacies or pharmacy services;
• Non-preferred versus preferred network arrangements;
• Geographic location of the pharmacy;
• Drug type (i.e., brand name, generic, high-cost, specialty, special handling, limited distribution, compounded products);
• Plan type (i.e., prescription drug plan (PDP), MA–PD); and
• Vertical integration, i.e., the control within a single corporate structure of various roles in the prescription drug supply chain, including insurance plans, PBMs, and pharmacies. CMS also seeks comment on how implementation of standards for reasonable and relevant pharmacy contract provisions is likely to overlap with PBM disclosure requirements and remuneration restrictions.

The Department of Health and Human Services plans to establish standards in April 2028, for plan years beginning on or after January 1, 2029. If you have questions, please reach out to the authors.

Epstein Becker Green Staff Attorney Ann W. Parks contributed to the preparation of this post.

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If you have questions, please reach out to the author(s).

The Health Law Advisor blog is currently edited by Emily Chi Fogler.