Medicare Part D Reform: Will Flat Fees Lower Drug Costs?

In an interview with Pharmacy Times, Anne Cassity, senior vice president of government affairs at the National Community Pharmacists Association, discussed how the Pharmacy Benefit Manager (PBM) Reform Act’s shift to flat, bona fide service fees in Medicare Part D—beginning in 2028—could reshape formulary incentives and influence patient conversations around drug costs.

Cassity explained that under the current rebate-driven system, PBMs often receive compensation tied to a percentage of a drug’s list price, which can incentivize placement of higher-cost medications on formularies even when lower-cost alternatives offer equivalent clinical outcomes. She contrasted scenarios in which a $10,000 drug and an $800 drug may provide the same therapeutic benefit, yet the higher-cost product is favored due to rebate structures. By requiring flat fees that are not tied to drug prices, the new law removes the financial incentive to prefer more expensive medications solely for rebate revenue.

Cassity noted that this change could help discourage formulary designs that prioritize higher-cost drugs when clinically appropriate, lower-cost options exist. However, she emphasized that pharmacists remain limited in their authority over formulary composition. PBMs determine coverage, and prescribers ultimately select therapies.

Still, independent community pharmacists frequently take proactive steps when they identify more affordable alternatives. Cassity highlighted that pharmacists often contact prescribers directly to discuss lower-cost options that maintain therapeutic equivalence, reinforcing their role as patient advocates.

Overall, the transition to flat service fees represents a structural reform intended to realign financial incentives within Medicare Part D, potentially supporting more cost-conscious formulary decisions while preserving pharmacists’ collaborative role in optimizing patient care.