Labor Department Finalizes Rule Forcing PBMs to Disclose Fees
Pharmacy benefit managers must share rebate and spread-payment data with self-insured employers from July 2027, the Labor Department said Thursday.
The Department of Labor finalized a rule on Thursday that will require pharmacy benefit managers to disclose how much they are paid. Regulators expect the rule to lower drug costs for employers and their workers by $22 billion over a decade.
PBMs will have to give self-insured employer clients a broad set of data on payments they receive from drugmakers, pharmacies and other parts of the pharmaceutical supply chain. That includes negotiated rebates and "spread" payments, which a PBM keeps when a plan pays more for a drug than the PBM reimburses the pharmacy.
PBMs negotiate drug discounts, decide formulary placement, contract with pharmacies and process claims for employers and health plans. The biggest are owned by healthcare conglomerates, and the companies say they save their clients significant money. Critics say PBMs use their market influence to profit while raising drug costs for everyone else.
How the rule works
The rule takes effect in July 2027. PBMs must share the data when they negotiate or renew an employer contract and every six months after that. Employers can audit the disclosures once a year. Companies that do not comply face financial penalties and possible invalidation of their contract.
The department estimates PBMs will spend $1 million in the first year and $300,000 a year afterward to comply.
"For years, PBMs have operated in the shadows, pocketing hidden fees while workers and employers were left in the dark," Labor Secretary Keith Sonderling said in a statement. Employer groups welcomed the rule. James Gelfand, president and CEO of the ERISA Industry Committee, said many large employers cannot see how much of their prescription spending the PBM and its affiliates keep.
Greg Baker, CEO of Affirmed Rx, which bills itself as a transparent PBM, said the department's rule defines what disclosure means and who is on the hook as a fiduciary, while the law covers what PBMs must disclose. "Anybody who fights this rule, in our opinion, and who is against this rule has something to hide," he said.
PBM industry objects
PBM groups opposed the rule after the department proposed it in January. They argued that the department lacks legal authority to force more pricing disclosure, that PBMs are already rolling out more transparent products, and that the reporting burden would fall hardest on mid-sized PBMs.
David Marin, president and CEO of the Pharmaceutical Care Management Association, said full PBM transparency is already federal law after reform earlier this year. He called the rule "a solution in search of a problem."
The department acknowledged overlap with the Consolidated Appropriations Act of 2026. It limited disclosures to large self-insured group health plans and aligned timelines and definitions with the law. Regulators said the two serve different functions: the law requires retrospective detail on drug spending, while the new rule requires upfront disclosures so plans can compare PBMs. "In the Department's view, these two regimes complement each other," the final rule reads.
A KFF report released last week found that just under half of large employers get enough insight into what drugmakers pay their health plan or PBM. WTW expects drug costs to rise 11.5% in 2026, up from 9% the year before. The three biggest PBMs, Express Scripts, Caremark and Optum Rx, jointly control about 80% of U.S. prescriptions.
Source: Healthcare Dive