New U.S. Rule Mandates PBM Disclosure of Drug Pricing Practices

The Department of Labor finalized a rule on Thursday requiring pharmacy benefit managers to disclose earnings from negotiating drug prices for employer health plans. PBMs must provide disclosures every six months and whenever agreements are renewed or extended. The rule takes effect in July and covers self-insured group plans with more than 100 participants that pay claims themselves. The effective date precedes the deadline for implementing Congress's PBM changes by a year.

Companies including CVS Caremark, Express Scripts and Optum Rx must disclose payments received from drug manufacturers. PBMs must identify spread pricing, where a health plan pays more for a drug than the pharmacy receives in reimbursement. PBMs must also identify cases where a patient's copayment exceeds the drug's total cost. Health plans may audit PBMs at least annually. PBMs must explain earnings that exceed estimates by 5% or more.

The rule implements President Trump's executive order aimed at reducing drug prices. The rule follows Federal Trade Commission settlements reached earlier this year with leading PBMs over alleged anticompetitive conduct. Congress has also enacted transparency requirements and altered PBM compensation arrangements. PBMs face renewed administration scrutiny over allegations that opaque practices allow PBMs to manipulate markets to patients' detriment. The extent to which the measures will reduce PBM revenues remains unclear.

Labor Secretary Keith Sonderling described the rule as a victory for workers who have overpaid for prescriptions. Sonderling accused PBMs of collecting concealed fees while keeping workers and employers uninformed. Officials cited projections showing employers and workers facing some of the largest health cost increases in decades. A KFF survey found that employees' contribution toward family coverage rose 9% from 2025.

However, the Pharmaceutical Care Management Association warned that the rule could raise patient costs and weaken competition by adding a reporting system alongside congressionally mandated changes. David Marin, CEO of the PBM trade group, said, "It is a solution in search of a problem." Transparency Rising, a trade group representing smaller PBMs, supported the requirements as enforceable because disclosures are linked to ERISA rules. Transparency Rising said health plan fiduciaries must report PBMs that do not supply the required information.

However, Raymond James analyst Chris Meekins wrote that the final rule reaches fewer plans than initially envisioned. Meekins said the rule imposes no direct limits on PBM pricing, earnings from spread pricing or retention of manufacturer rebates. Meekins questioned whether better employer access to information would reduce compensation retained by PBMs or merely alter how PBMs charge for compensation. The rule could still face a legal challenge.

Some PBMs have begun reorganizing operations under the FTC settlements and ahead of the mandated changes. Some employers are leaving the largest PBMs and hiring smaller competitors to manage prescription costs. Signs suggest that additional companies are considering changing PBMs.