This week, Representative Lucy McBath (R-GA) introduced the bipartisan Net Effective Cost Transparency and Prescription Drug Affordability Act of 2026 to increase transparency and competition in the pharmacy benefit manager (PBM) market and help lower prescription drug costs.
What are PBMs, and how do they impact the market? PBMs serve as middlemen between health plans, pharmacies, and drug manufacturers and play a major role in determining prescription drug costs.
However, rebates, discounts, fees, and other payments can make it difficult for health plans to determine what they are actually paying for prescription drugs.
How will this bill bring transparency to the prescription drug market? The legislation introduced this week would require greater transparency around the “net effective cost” of prescription drugs.
The net effective cost refers to what drugs actually cost after rebates, discounts, fees, and other price concessions are taken into account.
By allowing PBM bids to be compared more consistently, the bill would promote greater competition and accountability across Medicare, Medicare Advantage, and employer-sponsored health plans.
What key figures had to say:
- Rep. Lucy McBath: “Families in Georgia and across this country are struggling with the high cost of prescription drugs. Convoluted PBM bidding practices have continued far too long without the safeguards in place to protect patients. This bill would help to simplify a complicated process and allow Americans access to health plans that work for them, not a PBM’s bottom line.”
- Cosponsor Representative Ryan Mackenzie (R-PA): “Families and seniors in the Lehigh Valley and the Poconos deserve real transparency when it comes to what they pay for prescription drugs. Our bipartisan legislation will make it easier to understand the true cost after rebates, discounts, and fees are taken into account.”
Further Context: The bill also requires Medicare Part D plans, beginning in 2028, to conduct a standardized annual bidding process for PBM services.
PBMs would submit bids using standardized information that includes rebates and other discounts, drug costs, pharmacy payments, patient cost-sharing, and the plan's projected net effective cost.
