Will PBM Rebate Reform Help Biosimilars Win Formulary Spots?

Federal pharmacy benefit manager (PBM) reforms in the Consolidated Appropriations Act 2026 (CAA 2026) will require 100% of manufacturer rebates to be passed through to employer-sponsored plans and, beginning in January 2028, will limit PBM compensation in Medicare Part D to flat service fees that are not tied to drug prices.¹ Whether those changes help lower-cost biosimilars win formulary spots may depend on what PBMs do next.

Rebate pass-through and transparency are only one step toward supporting biosimilar uptake, and employers should watch for what replaces rebates, Juliana M. Reed, MS, executive director of the Biosimilars Forum, said in an interview with The Center for Biosimilars.

“I think what we have to watch for—and this is where it's important for employers to require transparency—is what replaces rebates,” she said. “Are there new fees? Are there new things that the PBM can implement to continue to have the same amount of revenues coming in because they control access?”

The favoring of higher-cost drugs, whether through PBM rebates or under Medicare Part B in the physician office setting, is a problem the country needs to solve by taking away the mechanisms that allow it, Reed noted. Employers, she said, should be asking for and demanding transparency.

“We have lower-cost biosimilars out there,” Reed said. “We're not favored in any setting where it requires a high rebate, and that is not why biosimilar developers made this commitment, all this incredible amount of money and time to develop biosimilars. We did it to bring lower-cost products.”

Developing a biosimilar can take up to 9 years and cost up to $300 million.² Reed has also discussed federal legislation aimed at supporting that investment, including the Biosimilars Access and Affordability Act, which would automatically delay Medicare price negotiation for a reference biologic when a biosimilar launch is expected.^2,3

In theory, rebate pass-through should lower costs and support biosimilar uptake, Reed said. She pointed to the role PBMs played roughly 40 years ago in helping build the small-molecule generic industry.

“Should the PBMs be supporting competition through biosimilars? Yes,” Reed said. “If rebate pass-through and transparency work, that's great. But if something else comes forward that the PBMs put in place to continue to have their revenues…if it blocks access to lower-cost biosimilars, it's not working.”

References

1. Holland K. Federal PBM compensation shifts: early CAA 2026 considerations. Am J Manag Care. 2026;32(9):In Press. doi:10.37765/ajmc.2026.90007 https://www.ajmc.com/view/federal-pbm-compensation-shifts-early-caa-2026-considerations

2. McCrear S. Biosimilar bills would automate Medicare negotiation delays. CFB. October 12, 2026. Accessed November 6, 2026. https://www.centerforbiosimilars.com/view/biosimilar-bills-would-automate-medicare-negotiation-delays

3. McCrear S, Reed JM. How the Biosimilars Access and Affordability Act redefines IRA delays. CFB. November 3, 2026. Accessed November 6, 2026. https://www.centerforbiosimilars.com/view/how-the-biosimilars-access-and-affordability-act-redefines-ira-delays