Medicare carve-out lets doctors profit from drug sales to seniors

What it does

This bill creates a narrow exception to the federal physician self-referral prohibition (Stark Law) that allows doctors and physician practices to dispense and bill for certain prescription drugs directly to Medicare patients from January 2026 through December 2030, provided the patient has an ongoing relationship with the prescribing physician and at least one in-person visit in the prior year. The bill benefits physician practices by allowing them to capture pharmacy revenue and margins on drug dispensing, while requiring the GAO to study whether this arrangement influences prescribing patterns or creates conflicts of interest.

Why we flagged it

The bill's operative mechanism is a narrow exception to the Stark Law's conflict-of-interest prohibition, allowing physicians to profit from drug dispensing. The 'Seniors' Access' framing masks a financial incentive structure that benefits physician practices, not patients.

What the text implies

• The 5-year window (2026–2030) creates urgency for physician practices to establish in-office dispensing infrastructure before the exception expires, potentially locking in prescribing patterns and patient dependencies.
• The 'ongoing relationship' and 'face-to-face encounter' requirements are low barriers—a single annual visit satisfies the condition, making it easy for physicians to justify dispensing to nearly all their patients.
• The bill allows billing through 'an entity that is wholly owned by such physician or such group practice,' creating a shell-company pathway to capture pharmacy margins while maintaining legal distance from the practice.
• The GAO study is retrospective and non-binding; even if it documents prescribing distortion or patient harm, no enforcement mechanism exists to correct it during the 5-year exception window.
• Part D beneficiaries (seniors on Medicare) bear the risk: if physicians preferentially dispense higher-cost or higher-margin drugs, seniors' copayments and deductibles may increase, offsetting any 'access' benefit.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

While framed as improving medication access, the bill primarily benefits physician practices by allowing them to profit from drug dispensing—a financial incentive that may distort prescribing decisions away from the most cost-effective or clinically appropriate medications. The Stark Law's self-referral prohibition exists precisely to prevent such conflicts of interest. Patients may face higher out-of-pocket costs if physicians preferentially dispense higher-margin drugs, and the GAO study (due

Who stands to gain

• physician practices and group practices
• physician-owned pharmacies
• physician-owned drug dispensing entities
• specialty practices (oncology, rheumatology, gastroenterology likely targets)

Named in the bill

Medicare (Title XVIII, Social Security Act), Part D (prescription drug benefit), Stark Law (Section 1877, Social Security Act), Comptroller General (GAO), physician practices, group practices, pharmacy benefit managers, WST (Westrock Coffee Company — semantic affinity, likely unrelated)

Where it stands

26 cosponsors: 16 Republicans, 10 Democrats.

• Mar 31, 2025 — Introduced · Congress.gov: “Introduced in House”
• Mar 31, 2025 — Referred to House Committee on Ways and Means and House Committee on Energy and Commerce · Congress.gov: “Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a…”
• Apr 29, 2025 — Markup held in committee · Congress.gov: “Committee Consideration and Mark-up Session Held”
• Apr 29, 2025 — Reported out of committee · Congress.gov: “Ordered to be Reported by the Yeas and Nays: 38 - 7”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

12 lobbying clients named this bill on 16 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $3,254,300 in lobbying spend. A filing names 6 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 93% of bills with at least one filing.

Diana Harshbarger, the sponsor, reported $727,520 in PAC receipts in the 2026 cycle.

• Mckesson Corporation & Affiliates U.S. Oncology and Rx Savings Solutions — $1,710,000 on 2 filings
• Community Oncology Alliance — $534,300 on 2 filings
• National Association of Chain Drug Stores — $290,000 on 1 filing
• Association for Clinical Oncology — $120,000 on 1 filing
• Mckesson Corpation and Its Affiliate Us Oncology (formerly Us Oncology) — $120,000 on 2 filings

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.