This bill targets pharmacy benefit managers (PBMs), the middlemen who negotiate drug prices and manage prescription benefits for insurers, and requires them to operate more transparently under Medicare and Medicaid. Starting in 2026, PBMs working with Medicare Part D and Medicare Advantage drug plans must be paid only through flat, disclosed service fees rather than hidden markups tied to drug prices, and they must report detailed pricing, rebate, and pharmacy reimbursement data to health plans and the government each year, subject to independent audits. The bill also bans harmful "spread pricing" practices in Medicaid, where PBMs charge states more than they pay pharmacies and pocket the difference, and it tightens rules to ensure pharmacies are paid fairly and accurately for the drugs they dispense. Other provisions address conflicts of interest on drug formulary committees, make it easier for health plans to favor cheaper biosimilar drugs, and protect seniors' access to local pharmacies by limiting when plans can restrict certain drugs to a small network of pharmacies. The legislation directs several federal studies and reports—by the HHS Inspector General, GAO, and Medicare Payment Advisory Commission—on topics like drug price markups, drug shortages, and generic/biosimilar access, and it appropriates roughly $36 million combined to CMS and the HHS Inspector General to implement these changes, plus nearly $2 billion to the Medicare Improvement Fund in 2028.