Two New Regulations Impacting Pharmacy Benefit Managers (PBMs) Employers Must Understand
Recent regulations have been issued targeting pharmacy benefit managers (PBMs) and their business practices by mandating new reporting and disclosure obligations.
Improving Transparency Into Pharmacy Benefit Manager Fee Disclosure Proposed Rule
On January 30, 2026, the DOL released a proposed rule that would require PBMs and other covered service providers to provide disclosures to plan sponsors outlining, among other things, the direct and indirect received from the health plan and other arrangements. Specifically, the disclosures should include the rebates and other payments received from drug manufacturers, payments recouped from pharmacies, and spread compensation. This initial disclosure should also contain a statement related to the group health plan’s right to audit the information used for the disclosure in order to verify its accuracy and the procedures for requesting the audit. In addition to the initial disclosure requirement, the proposed rule also requires semiannual disclosures of the actual compensation received by the covered service provider and its affiliates be sent to the plan sponsor as well.
The comment period for the proposed rule closes March 31, 2026, and will be effective 60 days after the date of publication of the final rule. Additional information will be provided once it is available; however, plan sponsors should begin evaluating how it will review these disclosures once they are received.
Consolidated Appropriations Act, 2026
On February 3, 2026, the Consolidated Appropriations Act, 2026 (CAA 2026), which includes provisions impacting the relationship between plan sponsors and their PBMs, was passed. Under the CAA 2026, PBMs will be required to send semi-annual reports to certain employers and plans outlining similar information included in the disclosures under the proposed rule discussed above. For large employers, PBMs will be required to include drug specific information in the report such as, a list of drugs for which a claim was filed, a list of all drugs for which the plan incurred $10,000+ in spending, and information related to affiliated pharmacies the PBM has.
PBMs will also be required to pass 100% of all fees, alternative discounts, rebates, and other remuneration to the group health plan or insurer. ERISA plans will have the right to audit the rebate contracts annually.
Group Health Plan and Plan Fiduciary Obligations: In addition to the reporting obligations for PBMs, the CAA 2026 will mandate additional disclosure obligations for plan sponsors and plan fiduciaries. Specifically, group health plans will be required to provide plan participants and beneficiaries notice of the PBM’s obligation to provide the disclosures, as well as a summary document of the report and information related to specific claims incurred by the participant of beneficiary.
In the event of noncompliance with these provisions, PBMs or group health plans could be subject to civil monetary penalties ranging from $10,000 per day to $100,000 per violation for knowingly providing false information.
The provisions outlined in the CAA 2026 are effective 30 months after enactment. For January 1st plan years, that means generally the provisions will impact their plans starting January 1, 2029. Additional guidance is expected and will be provided as it becomes available.
