"[O]ne of the most significant parts of the law -- the delinking of PBM compensation from the price of a drug in Medicare Part D -- eluded employer groups. This is a provision in the new law that only applies to Medicare Part D.... Employers ... didn't get a ban on spread pricing ... What the law does include for employers is a requirement for PBMs to provide more detailed reporting to plan sponsors ... In addition, PBMs are mandated to pass along all rebates, discounts, fees and other payments they receive on drugs directly to employers or group health plans." MORE >>
"The proposal builds on recent national efforts to lower healthcare costs and reinforce transparency across the supply chain. By holding PBMs accountable and requiring them to operate in full view of the plans they serve, the rule is designed to empower employers to negotiate more favorable terms and ultimately reduce prescription drug spending. If finalized, the regulation represents a decisive step towards a more transparent pharmacy benefits system -- one that aligns business practices with the interests of workers and their families." MORE >>
"Pharmaceutical manufacturers weren't the only stakeholders cheering greater regulation for PBMs. Employers, which face enhanced fiduciary duties under the Consolidated Appropriations Act of 2021 (CAA), have also called for more oversight of the industry, especially as they're often kept in the dark about what their charges look like." MORE >>
"Through the website, patients will be able to access large discounts on many of the most popular and highest-priced medicines in the country, paying prices in line with the lowest paid by other developed nations (known as the most-favored-nation, or MFN, price)." MORE >>
"[T]he government funding bill that was signed into law on February 3, 2026 ... contains three reforms that apply to Medicare Part D and two that apply to commercial PBMs.... DOL issued a proposed rule on January 29, 2026, to require commercial PBMs to report on several transparency measures to plan fiduciaries of self-insured group health plans subject to [ERISA]." MORE >>
"The problem isn't the DTC model. It's the assumption that the federal government needs to run it.... If the administration wants to expand direct-to-consumer drug purchasing, the most effective role it can play is not to build a federal platform but to eliminate policy barriers that hinder private actors from competing, innovating, and lowering prices on their own." MORE >>
"The [FTC] announced a landmark settlement with Express Scripts (ESI) following allegations that the PBM's rebate‑driven formulary practices contributed to artificially inflated insulin list prices and higher out‑of‑pocket costs for patients. The settlement requires ESI to implement significant reforms aimed at increasing transparency, reducing member cost‑sharing, and shifting away from pricing models that prioritize high‑list‑price drugs.... The settlement is currently in a 30‑day public comment period." MORE >>
"[T]here are a variety of creative options for employers who want to provide access to GLP-1 drugs prescribed for weight loss but who also want to contain costs. But, as with any benefits program, each employer must carefully consider the associated risks with these options and ensure they can be tailored to suit the employer's individual needs. These options include health reimbursement accounts and health flexible spending accounts." MORE >>
"The Consolidated Appropriations Act, 2026 (CAA) (HR 7148) ... added sweeping reporting mandates to ERISA related to the provision of pharmacy benefit management services for ERISA-covered group health plans.... The mandates regulate contracting by group health plans, health insurance issuers offering group health insurance coverage, entities providing pharmacy benefit management services on behalf of a plan or issuer, and 'applicable entities.' " MORE >>
"With the skyrocketing costs of health care and increased pharmacy spending, the implementation of new PBM reforms was expected. No immediate action is required, but employers should be prepared for restructuring of PBM contracts, reporting and oversight governance. Many of the CAA 2026 reforms are incorporated into ERISA, the Public Health Service Act, and the Internal Revenue Code, and will impact all employer plan sponsors, not just ERISA plan fiduciaries." MORE >>
"The Federal Trade Commission secured a landmark settlement with one of the nation's largest pharmacy benefit managers (PBMs), Express Scripts, Inc., and its affiliated entities (collectively 'ESI'). The settlement requires ESI to adopt fundamental changes to its business practices that increase transparency, are expected to drive down patients' out-of-pocket costs for drugs like insulin by up to $7 billion over 10 years[.]" MORE >>
"The Federal Trade Commission and Cigna's Evernorth unit have officially reached a settlement that resolves allegations that the company's pharmacy benefit manager artificially drove up prices for insulin.... Express Scripts agreed to establish a standard offering for plan sponsors where the out-of-pocket costs for patients are based on the net cost of a drug, rather than the list price. It will also provide full access to its Patient Assurance Program to all individuals if insulin is on a formulary, unless the plan sponsor chooses to opt out." MORE >>
"[T]he FTC alleges these PBMs use of restrictive formularies that completely excluded certain drugs from coverage coerced pharmaceutical manufacturers to provide PBMs higher rebates to avoid exclusion of their products outright from the PBM formularies required for insurance coverage for tens of millions of patients.... The FTC settlement resolves ESI's liability exposure from the FTC lawsuit ... in return for it making significant changes in its PBM pricing and other practices." MORE >>
"[T]he CAA includes several reforms to the pharmacy benefit manager (PBM) industry that represent a major step forward for meaningful health care reform. The PBM provisions included in the final legislation help shine a light on PBM business practices, promote transparency, and ensure that negotiated savings benefit plan sponsors and patients -- not middlemen." MORE >>
"The Consolidated Appropriations Act, 2026 (CAA 2026) ... includes a very significant and long-awaited set of reforms designed primarily to address pharmacy benefit manager (PBM) prescription drug pricing and compensation structures. These new rules that apply in 2029 will require PBM contractual protections for employer data access, extensive PBM reporting standards to employers, new employee notice requirements, disclosure enhancements, and a pass-through compensation mandate." MORE >>
"[T]he proposed regulation is much broader than the corresponding rule for pension and retirement plans, not only in terms of the type of compensation and fees that are subject to disclosure but also regarding [1] the extent of the written disclosure, [2] the timing and frequency of disclosure, [3] the requirement to generally disclose using monetary amounts (versus formulas or percentages), and [4] the provision of specific rights to plan fiduciaries with respect to the disclosures (e.g., audit rights)." MORE >>
"The required advance, written disclosures would be necessary for parties to contracts or arrangements for PBM services to obtain the benefit of a prohibited transaction exemption under ERISA 408(b)(2).... If a third-party administrator (TPA) contracts with an ERISA self-insured group health plan to provide pharmacy benefit management services, the TPA is a covered service provider under this proposal, even if it intends to rely on another provider to perform those services (e.g., a subcontracted PBM)." MORE >>
"Following Arkansas's efforts last year, several states are considering or advancing proposals that would restrict or prohibit [PBMs] and affiliated entities from owning or controlling pharmacies. While the proposals vary in structure and timing, each reflects ongoing state‑level interest in limiting PBM pharmacy ownership, with some measures drawing from aspects of the Arkansas approach." MORE >>
"The proposed regulations would only apply to ERISA plans, not governmental or church plans, and for now are limited in scope to self-funded plans, though the DOL has left space in the proposed regulations to expand to fully insured plans in the future.... The rules build upon the statutory framework established by ERISA Section 408(b)(2)(B), which requires group health plan sponsors to request and review fee information from 'covered service providers' to demonstrate the reasonableness of the arrangement under ERISA's prohibited transactions requirements." MORE >>
"PMCA's arguments in favor of ERISA preemption of the fiduciary standards provision for self-funded employer plans center around three main points: [1] It makes an impermissible reference to ERISA plans because it specifically references 'self-insured employer plans'; p2[ It regulates in a field already fully occupied by federal standards ... and [3] It requires plan sponsors to design or structure their plan in a particular way[.]" [Pharmaceutical Care Management Association v. Bonta, No. 26-0012 (C.D. Calif. complaint filed Jan. 2, 2026)] MORE >>
"The Proposed Rule attempts to provide ... transparency by: [1] Requiring PBMs to provide written disclosures of the PBM's direct and indirect compensation ... reasonably in advance of entering into or renewing a service arrangement ... [2] Establishing audit provisions designed to ensure that plan fiduciaries can verify the accuracy of the disclosures; and [2] Providing relief for plan fiduciaries if the PBM fails to meet its disclosure obligations.... [T]he Proposed Rule would require PBMs to disclose compensation as a monetary amount (even if estimated), rather than providing formulas, which are notoriously difficult for fiduciaries to assess when evaluating reasonableness." MORE >>
"Covered service providers would be required to provide initial disclosures to the plan fiduciary reasonably in advance of entering into, renewing, or extending a contract or arrangement. The initial disclosures would include a description of the pharmacy benefit management services as well as information on the direct compensation from the self-insured group health plan and compensation reasonably expected to be received from other arrangements ... The proposed rule would also require covered service providers to provide semiannual disclosures of the same compensation categories based on amounts actually received." MORE >>
212 pages. "The Department is proposing a regulation that would require providers of pharmacy benefit management services and affiliated providers of brokerage and consulting services to disclose information about their compensation to fiduciaries of self- insured group health plans subject to [ERISA].... These disclosure requirements would apply for purposes of ERISA's statutory prohibited transaction exemption for services arrangements. This proposal implements section 12 of President Trump's Executive Order 14273, Lowering Drug Prices by Once Again Putting Americans First ...
"The Department's proposed regulation is intended to provide much needed transparency into contracts and arrangements with PBMs and affiliated brokers and consultants so that the responsible plan fiduciaries of ERISA-covered self-insured group health plans can better fulfill their statutorily mandated role to determine that the service contracts or arrangements are reasonable. Under the Department's proposed regulation, these service providers would be required to provide robust disclosures to responsible plan fiduciaries of self-insured group health plans regarding their compensation for such services, including the advance disclosure of compensation they reasonably expect to receive. The proposed regulation also includes audit provisions designed to ensure that the responsible plan fiduciaries of self-insured group health plans can verify the accuracy of the disclosures. The responsible plan fiduciaries would be able to use the disclosures in their process of selecting a provider of pharmacy benefit management services, engaging an affiliated broker or consultant, monitoring these service providers' operations and compliance with contractual obligations, and also in analyzing the drivers of prescription drug costs." MORE >>
"Issued under ERISA's statutory service provider prohibited transaction exemption, the proposed rule requires PBMs to disclose the following information for the first time: Rebates and other payments from drug manufacturers. Compensation received when the price paid by the plan for a prescription drug exceeds the amount reimbursed to the pharmacy. Payments recouped from pharmacies in connection with prescription drugs dispensed to the plan. The proposed regulation would also allow plan fiduciaries to audit the accuracy of PBM disclosures and provides additional relief for plan fiduciaries if their PBM fails to meet its obligation." MORE >>
