Drug Pricing, PBM Reform, and the 2026 Midterms: What You Need to Know

Key Takeaways

• FTC settlements force PBMs to end spread pricing and de‑link rebates.
• DOL rule pressures plan sponsors to justify rebate retention, boosting transparency.
• IRA and MFN negotiations expand price controls to Part B, raising compliance stakes.
• Pharma must align US and ex‑US strategies to hedge against rebate‑based pricing.

Pulse Analysis

The regulatory tide surrounding drug pricing is reaching a critical mass as the 2026 midterms approach. Federal actions—including FTC settlements that ban spread pricing and require PBMs to separate compensation from rebates—are already reshaping the commercial landscape. At the same time, the Department of Labor’s pending ERISA rule will compel plan sponsors to publicly justify any decision to retain rebates, effectively turning transparency into a de‑facto requirement. Together, these moves aim to curb opaque pricing practices that have long inflated prescription costs, especially in the retail and independent pharmacy sectors.

Beyond the commercial sphere, the Inflation Reduction Act (IRA) and the administration’s Most Favored Nation (MFN) initiatives are extending price‑control mechanisms into Medicare Part B and tightening tariff regimes for manufacturers lacking MFN agreements. The IRA’s negotiation of Maximum Fair Prices now includes biologics and immunology products, while MFN letters and tariff exemptions create a dual‑track system that rewards domestic production. This layered approach signals a shift from ad‑hoc executive orders to a more systematic, multi‑factor pricing framework that could incorporate international reference pricing in future cycles.

For pharmaceutical companies, the evolving policy environment demands a portfolio strategy built on optionality. Companies are advised to separate US and ex‑US pricing, consider raising ex‑US net prices to buffer against MFN reference points, and stagger launches to align with favorable regulatory windows. Vertical integration and direct‑to‑consumer models, such as Amazon’s tele‑medicine‑to‑pharmacy pipeline, are gaining traction as firms seek greater control over distribution and patient access. Ultimately, embedding scenario planning into pipeline decisions and maintaining flexibility will be the decisive advantage as policymakers, employers, and voters shape the next chapter of drug pricing reform.