Fair Pharmacies for Federal Employees Act of 2025
- Sponsor
- Rep. Krishnamoorthi, Raja [D-IL-8]
- Committees
- Oversight and Government Reform Committee (primary)
- Last action
- Jul 15, 2025
Bottom line
The bill aims to eliminate perceived conflicts of interest and enhance competition in the federal employee health benefits program by separating the ownership of pharmacy benefit managers and pharmacies.
What it actually does
This bill prohibits the Office of Personnel Management (OPM) from contracting with Federal employee health benefit (FEHB) qualified carriers that directly or indirectly own, operate, or control pharmacies or pharmacy benefit managers (PBMs). It also makes it unlawful for OPM or an FEHB carrier to contract with a PBM that directly or indirectly owns, operates, or controls a pharmacy.
Proponents argue
Supporters argue this bill will lower prescription drug costs for federal employees and taxpayers by eliminating anticompetitive practices and increasing transparency in the PBM industry. They contend that common ownership leads to self-dealing, inflated prices, and disadvantages independent pharmacies.
Opponents contend
Opponents, likely integrated PBMs and health insurance carriers, would argue that vertical integration allows for greater efficiency, better care coordination, and lower administrative costs, which ultimately benefit consumers. They might also claim that such prohibitions could disrupt existing care models and limit patient choice.
The bill is short and its core provisions are clearly stated, allowing for quick comprehension of its primary intent.
Section 2(a)
Prohibition on FEHB Carriers Owning Pharmacies or PBMs
This provision makes it unlawful for the Office of Personnel Management (OPM) to contract with a Federal employee health benefit qualified carrier if that carrier directly or indirectly owns, operates, controls, or directs a pharmacy or a pharmacy benefit manager (PBM). It also applies if the carrier is directly or indirectly owned, operated, or controlled by a PBM.
Supporters argue
Supporters argue this prevents conflicts of interest where a carrier might favor its own PBM or pharmacy, leading to higher costs and reduced choice for federal employees.
Critics contend
Opponents (integrated carriers) would argue this disrupts efficient, vertically integrated models that can offer coordinated care and potentially lower overall costs through scale.
Tradeoffs
Balances the desire to prevent conflicts of interest and promote competition against the potential loss of efficiencies gained through vertical integration.
Section 2(b)
Prohibition on PBM Ownership of Pharmacies in FEHB Contracts
This provision makes it unlawful for OPM or a qualified carrier to contract or subcontract with a pharmacy benefit manager (PBM) if that PBM directly or indirectly owns, operates, controls, or directs the operation of a pharmacy. This ensures that PBMs managing drug benefits for federal employees do not have a financial incentive to steer patients to their own pharmacies.
Section 2(c)
Preservation of Existing Antitrust and Enforcement Authority
This section clarifies that the bill does not limit the existing authority of the Federal Trade Commission (FTC), the Inspector General of the Department of Justice, the Department of Health and Human Services, or State attorneys general under any other provision of law. This ensures that existing antitrust and regulatory oversight powers remain intact and are not superseded by this bill.
The definition of 'pharmacy' is exceptionally broad, encompassing virtually any entity licensed to dispense medication, including mail-order, specialty, retail, nursing home, long-term care, hospital, and infusion pharmacies, as well as any organization with specific pharmacy taxonomy codes in its National Provider Identifier (NPI) registration.
Section 2(d)(3)
Why it matters:While definitions are typically placed at the end for clarity, the comprehensive scope of this definition is critical to the bill's effectiveness and could be easily missed, potentially allowing for loopholes if not carefully reviewed.
Case for: Proponents argue this broad definition is essential to prevent entities from reclassifying themselves or operating under different models to circumvent the bill's prohibitions, ensuring comprehensive coverage of the market.
Case against: Opponents might argue that such a broad definition could inadvertently capture entities not intended to be covered, leading to overreach or unintended consequences for specialized healthcare providers.
Estimated impact: Ensures the prohibitions apply across the entire spectrum of pharmacy services, preventing evasion through structural changes.
The definition of 'pharmacy benefit manager' is also very expansive, covering any person, business, or entity that, directly or indirectly through an intermediary, affiliate, subsidiary, or agent, negotiates prices, contracts with pharmacies, or manages/administers prescription drug benefits, regardless of how the entity identifies itself.
Section 2(d)(4)
Why it matters:This detailed definition is crucial for the bill's enforceability, preventing PBMs from avoiding the prohibitions by simply changing their self-designation or operating through complex corporate structures.
Case for: Supporters contend that this detailed and inclusive definition is necessary to effectively target the full scope of PBM activities and prevent circumvention of the ownership prohibitions.
Case against: Critics might argue that such a broad definition could create ambiguity or impose undue burdens on entities that perform some PBM-like functions but are not primarily PBMs.
Estimated impact: Ensures the prohibitions apply to all entities performing PBM functions, regardless of corporate structure or self-identification.