CMS ENFORCEMENT & MEDICARE ADVANTAGE

Policy CMS threatens to freeze Elevance MA enrollment over seven-year pattern of risk adjustment noncompliance

CMS issued a sanctions notice (Feb. 27) to Elevance Health threatening to suspend all new Medicare Advantage enrollment and marketing activities effective March 31, 2026. STAT News reported that over seven years, Elevance submitted risk adjustment data corrections on encrypted USB flash drives rather than through CMS's required electronic systems—a method the agency had explicitly and repeatedly rejected. CMS alleges Elevance continued to annually certify the accuracy of its risk adjustment data while possessing documented knowledge that unverified diagnosis codes had not been corrected through proper channels. Healthcare Dive reported that the sanctions arrived one month after CMS released lower-than-expected 2027 MA payment rates alongside a proposed rule to exclude chart reviews from risk scoring. Elevance's stock dropped more than 8% on the disclosure.

Elevance was already planning to shrink MA membership in 2026 to cope with rising medical costs, having dropped approximately 14% of members compared to 2025. The March 31 suspension deadline falls after the annual open enrollment period, limiting near-term enrollment impact, but Becker's reported that reputational damage with brokers could make it harder for Elevance to return to membership growth even after resolving the compliance issues.

POST-CAA 2026: MANUFACTURER PRICING SPOTLIGHT

Pricing PBM reform enacted—now manufacturers face the scrutiny they deflected for a decade

PharmaVoice reported (Feb. 27) that the CAA 2026 PBM provisions are reshaping the political landscape around drug pricing. Jesse Dresser of Frier Levitt warned that manufacturers must restructure PBM contracts immediately because all list-price-linked fees and percentage-based compensation structures will be prohibited by August 2028. The PCMA published a pointed memo (Feb. 3) arguing that with PBM reform complete, Congress should now direct attention to manufacturer practices including patent abuse, shadow pricing, and pay-for-delay. AJMC reported that Johns Hopkins researcher Ge Bai identified the critical structural limitation: patient cost-sharing remains calculated on list prices, not net prices, meaning 100% rebate pass-through benefits plan sponsors but may not reduce patient out-of-pocket costs.

Meanwhile, a Ropes & Gray analysis flagged the DOL's January 30 proposed rule mandating PBM remuneration transparency for self-insured employer plans. The rule would require disclosure of manufacturer rebates, administrative fees, spread pricing, pharmacy clawbacks, and compensation received by affiliates—on both aggregate and per-formulary-drug basis. The comment period closes March 31, 2026, with regulations taking effect for plan years beginning on or after July 1, 2026 if finalized as proposed. This is the commercial-market companion to the CAA 2026 Part D reforms, and it targets the largest insurance market segment in the U.S.

TRUMPRX, MFN & LIST PRICES

Pricing TrumpRx underperforms at one month as all 16 MFN signatories raise list prices on 872 drugs

STAT News reported (March 5) that one month post-launch, TrumpRx has added few drugs beyond its initial ~43, usage data remains undisclosed, and several manufacturer deals are still being finalized. Pfizer—the first MFN signatory—has listed only 30 of its hundreds of marketed products. Sanofi and Boehringer Ingelheim have not yet added any drugs to the platform despite signing MFN agreements. Meanwhile, PharmExec reported that all 16 companies with MFN agreements raised list prices on 872 brand-name drugs in the first two weeks of 2026, per 46brooklyn's analysis. The median increase was 4%—unchanged from 2025. Pfizer raised 72 products including a 15% increase on its COVID vaccine. 46brooklyn CEO Antonio Ciaccia noted the market is performing in line with prior years, meaning MFN has not yet produced observable changes in industry pricing behavior.

VERTICAL INTEGRATION & 340B

340B Cigna completes CarepathRx hospital pharmacy acquisition; DOJ intervenes for manufacturers in state 340B litigation

STAT News broke (Feb. 26) that Cigna's Evernorth completed its acquisition of CarepathRx, a hospital pharmacy dispensing drugs to nearly 10% of U.S. hospitals. The deal was not formally announced—STAT discovered it in financial filings. Fierce Healthcare confirmed that Oregon regulators reviewed the deal and determined it would not materially increase Evernorth's market concentration, though Evernorth already operates Express Scripts (PBM) and Accredo (specialty pharmacy). Payer Perspectives noted the acquisition gives Evernorth indirect access to 340B economics—including discounted drug acquisition costs, revenue-sharing with hospitals, and increased manufacturer negotiating leverage. Adam Fein of Drug Channels Institute observed that hospital pharmacy acquisitions have been driven by turmoil in the 340B contract pharmacy space.

FORMULARY & BIOSIMILARS

Biosimilar CVS Caremark extends private-label biosimilar playbook to osteoporosis; FDA revises biosimilar development guidance

CVS Health announced that Caremark will add denosumab biosimilars Ospomyv (Cordavis/CVS private-label) and Stoboclo (Celltrion) to major national commercial template formularies effective April 1, replacing Prolia. Generic teriparatide, Bonsity, and Tymlos will replace Forteo. CVS projects more than 50% cost reduction per prescription versus branded originators. Ed DeVaney, president of CVS Caremark, cited the Humira biosimilar playbook—96% patient transition rates and $1.5 billion in cumulative gross savings—as the template for the osteoporosis transition. Separately, Drug Channels Institute's analysis of 2026 Big Three formulary exclusions documented that PBM-affiliated private-label biosimilars dominate both the Humira and Stelara formulary positions, with CVS Health blocking Cordavis sales data reporting since January 2025.

On the regulatory front, the FDA published revised draft guidance (March 10) on biosimilar development under the BPCI Act, updating Q&As on analytical assessment, clinical study requirements, and interchangeability standards. The guidance revision is the fourth iteration and reflects the agency's evolving approach to the abbreviated licensure pathway as the biosimilar pipeline accelerates. AJMC interviewed PCMA CEO JC Scott, who argued PBMs are leading biosimilar adoption the same way they drove generic prescribing rates, while acknowledging that manufacturer patent tactics have historically delayed biosimilar market entry.

QUICK TAKES

• Policy CMS drug acquisition cost survey due March 31 — Simon-Kucher's policy stacking analysis flagged the OPPS Drug Acquisition Cost Survey as a quiet inflection point. By collecting NDC-level, net-of-rebates acquisition costs from outpatient hospitals, CMS is building a dataset that converts spread pricing from anecdote into measurable reality. For 340B hospitals especially, this creates a public record of the acquisition-to-reimbursement gap. Expect this data to surface in 2027 Part B payment rulemaking.
• Pricing GLOBE and GUARD comment period closed — CMS Innovation Center's two mandatory international reference pricing models would apply to ~25% of Medicare beneficiaries in randomized geographies. GLOBE (Part D) begins October 1, 2026; GUARD (Part B) begins January 1, 2027. Neither requires congressional action. Crowell & Moring notes that GENEROUS, a separate voluntary Medicaid supplemental rebate model, could deliver MFN-aligned net prices via state supplemental rebates without triggering Best Price.
• 340B IRA-driven 340B margin compression begins — As Maximum Fair Prices take effect for the first 10 negotiated drugs, 340B ceiling prices for those products may paradoxically increase because lower manufacturer best prices reduce the inflation penalty component. Covered entities face a new operational challenge: monitoring MFP rebate denials, reconciling claim-level 340B qualification, and managing clawback risk from overlapping cost reductions. VytlOne urges covered entities to examine formularies for lowest-cost therapies as a mitigation strategy.
• Policy Washington state advances 340B contract pharmacy bill with provider and manufacturer reporting requirements. Five states now require some form of 340B reporting: Minnesota, Colorado, Hawaii, Vermont, and (pending) Washington. The dual reporting requirement—covering both providers and manufacturers—represents an emerging legislative template that gives both sides data to argue their positions.
• Formulary AJMC maps five CAA 2026 enforcement goals — Transparency mandates, compensation delinking, rebate pass-through, pharmacy access protections, and vertical integration scrutiny. Civil penalties up to $10,000 per day for noncompliance with transparency reporting. CBO estimates the largest fiscal impact ($1.865B of $2.12B total deficit reduction) coming from commercial-market PBM oversight, not Medicare Part D.

WHAT TO WATCH NEXT

Drug Channels Leadership Forum 2026—March 16–18, Miami

DCI's invite-only annual gathering of senior drug channel leaders takes place next week at Turnberry Resort, with the agenda focused on the NPDC transition, PBM reform implementation, and 340B dynamics. DCI's 2026 Economic Report on U.S. Pharmacies and PBMs—the 17th edition, 500+ pages—releases March 24. The forum historically produces the sharpest public statements from PBM, manufacturer, and wholesaler executives about strategic direction. Watch for how Big Three PBMs plan to restructure compensation models ahead of the August 2028 delink deadline, and whether wholesalers signal further vertical integration into biosimilar manufacturing and physician practice ownership.

DOL PBM transparency rule comment deadline—March 31, 2026

The DOL's proposed rule would mandate PBM remuneration transparency for self-insured employer plans, requiring per-drug disclosure of manufacturer rebates, administrative fees, spread pricing, and pharmacy clawbacks. Ropes & Gray notes this targets the commercial market segment that CBO projects will generate the largest behavioral change from PBM reform. If finalized, the rule would take effect for plan years beginning on or after July 1, 2026—meaning the first disclosures could land during the 2027 plan design cycle. Market access teams should be modeling how per-drug remuneration visibility will affect formulary placement decisions and PBM contract negotiations for specialty and biologic products.

CMS drug acquisition cost survey—March 31, 2026

CMS is collecting NDC-level acquisition cost data from outpatient hospitals for the first time at this granularity. When combined with the CAA 2026 transparency mandates and state-level 340B reporting requirements, this data creates the infrastructure for CMS to benchmark hospital drug acquisition costs against reimbursement rates—a prerequisite for any future payment reforms targeting the 340B-to-commercial reimbursement spread. Simon-Kucher's analysis calls this a structural turning point in drug channel economics: the system is becoming more observable, and every pricing decision now has the potential to cascade across Medicare, Medicaid, and 340B simultaneously.