The Consolidated Appropriations Act signed February 3 includes the most comprehensive PBM reform legislation in decades, establishing an "any willing pharmacy" provision effective 2028, mandatory semiannual transparency reports on rebates and spread pricing, and a flat-fee compensation requirement that eliminates rebate-linked incentives for pharmacy benefit managers to favor high-list-price drugs.

The Big Three PBMs — CVS Caremark, Express Scripts (Cigna), and OptumRx (UnitedHealth) — control approximately 80% of the U.S. prescription drug market. Their business model has relied on opaque rebate negotiations, spread pricing (pocketing the difference between what they charge plans and what they pay pharmacies), and narrow network designs that exclude independent pharmacies. The new law attacks all three revenue streams. The "any willing pharmacy" provision, effective January 2028, requires PBMs to accept any pharmacy that agrees to standard network terms — effectively ending the ability to steer volume to PBM-owned pharmacies. The transparency requirements force PBMs to report actual rebate pass-through rates and spread pricing margins to plan sponsors every six months.

For dental practices, the PBM reform has direct implications. Dental prescriptions — antibiotics, pain management, oral rinses, and increasingly, specialty medications for oral conditions — flow through PBM formularies. The flat-fee compensation requirement will restructure which drugs appear on preferred formularies, potentially improving access to generics and biosimilars while reducing the incentive to favor brand-name drugs with larger rebates. Practice owners should expect formulary changes within 12-18 months as PBMs restructure their drug selection criteria around the new compensation model.

What to watch: PBM stock performance and strategic responses — expect CVS, Cigna, and UnitedHealth to restructure their pharmacy services divisions before 2028 implementation.