H.R. 10369 — Net Effective Cost Transparency and Prescription Drug Affordability Act of 2026

This section requires PDP sponsors of Medicare prescription drug plans, for plan years beginning on or after January 1, 2028, to solicit bids from pharmacy benefit managers through a standardized public process that includes projected enrollment and utilization data, formulary parameters, and detailed bid contents on fees, rebates, net ingredient costs, and projected net effective costs. Sponsors must submit all bids and supporting data to the Secretary, justify selection of any bid other than the lowest projected net effective cost, and comply with federal acquisition standards for competition and documentation; the Secretary must publish aggregated, deidentified bid data annually and issue implementing regulations within 180 days of enactment.

This section requires MA-PD plans to comply with pharmacy benefit manager requirements under section 1860D-12(i) of the Social Security Act. It establishes a prescription drug cost performance measure for MA-PD plans beginning January 1, 2028, that evaluates the percentage variation between projected and actual net effective costs, timeliness of corrective actions, beneficiary cost-sharing increases, and compliance with reconciliation and transparency rules; rates plans on a 5-star scale (with 5 stars for costs within 2 percent of projections and no corrective actions required, and 1 star for costs exceeding 15 percent or repeated noncompliance); weights the measure at not less than the median of all other star rating measures; integrates results into quality bonus payments; requires public reporting of specific variations, outcomes, and benchmarks; and mandates standardized beneficiary notifications for plans rated 2 stars or below. The section also directs the Secretary to establish a comparable performance measurement and public reporting system for standalone Part D plans.

This section requires covered service providers for employee benefit plans to disclose, in a uniform format, the projected net effective cost for each pharmacy benefit management bid received on behalf of the plan. It defines net effective cost as the total annual cost to the plan of all covered drugs in the formulary if the bid is accepted, and bona fide service fees as fair-market value fees for itemized services that are not passed on to the plan. The requirements apply to plan years beginning after 2027.