Legislative Lowdown: PBMs Must Disclose Pricing Information to Health Plans, Workers
•February 11, 2026
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Why It Matters
Greater transparency curtails PBM profit‑skimming, potentially lowering drug costs for employers and their employees while strengthening market competition.
Key Takeaways
- •PBMs must report pricing data semiannually to health plans
- •Full rebate pass‑through to group health plans mandated
- •Net price, spread, and out‑of‑pocket costs disclosed
- •Employers could see lower prescription expenses
- •Federal budget office projects $2 billion savings over ten years
Pulse Analysis
Pharmacy benefit managers have long operated behind a veil of complex contracts and opaque rebate structures, allowing them to capture a portion of drug discounts without the knowledge of health plans or employers. Recent legislative momentum, driven by concerns that PBMs incentivize higher list prices to earn larger rebates, culminated in a bipartisan spending bill that codifies transparency requirements. By obligating PBMs to file detailed pricing reports—including the spread between plan payments and pharmacy reimbursements, net drug prices after all discounts, and patient out‑of‑pocket responsibilities—the law seeks to dismantle the information asymmetry that has fueled inflated drug costs.
The new mandate goes further by prohibiting PBMs from retaining any portion of manufacturer rebates, fees, or alternative discounts, compelling a 100% pass‑through to group health plans. This shift could fundamentally alter PBM business models, pushing them toward fee‑based services rather than rebate‑driven revenue. For employers, the clearer view of true drug costs enables more accurate budgeting and the ability to negotiate better formulary terms. Workers stand to benefit from reduced copays and a more transparent pricing landscape, potentially decreasing overall out‑of‑pocket spending on prescriptions.
While the reforms promise cost savings—estimated at $2 billion in federal outlays over a decade—the transition may present short‑term operational challenges. PBMs will need to overhaul reporting systems, and health plans must develop processes to analyze and act on the influx of data. Nonetheless, the legislation signals a broader regulatory trend toward accountability in the pharmaceutical supply chain, encouraging market participants to prioritize value over opaque rebate structures. Employers and policymakers will be watching closely as the 2028‑2029 rollout unfolds, assessing whether the anticipated savings materialize and how the industry adapts to a more transparent paradigm.
Legislative lowdown: PBMs must disclose pricing information to health plans, workers
Reforms included in a spending bill recently passed by Congress and signed into law by President Trump could transform how employers interact with pharmacy benefit managers (PBMs).
The reforms, which build on other federal efforts to rein in the intermediaries that work with health plans and the pharmaceutical industry to negotiate drug prices, are set to take effect in 2028–2029. Here’s what could change for employers as a result of the new requirements.
Increased transparency. PBMs must file reports to group health plans every six months once the legislation takes effect, though insurers may request them quarterly, too. The reports must include a host of details about drug prices, including the difference between what the health plan pays for a drug, and how the pharmacy is compensated for this drug (also known as the “spread”). Details on rebates—a mechanism that allows PBMs to collect from drug manufacturers in exchange for placing their products on a “formulary,” or a list of drugs covered by insurers—must also be included.
PBMs will also be required to include information about the “net price” of a drug; i.e. what the health plan owes after rebates, fees, alternative discounts, and other types of compensation are applied. The mandate also asks for details on what plan members pay out-of-pocket for drugs, and any information on copay assistance or discounts.
Health plan participants may request a copy of this report, as well.
Rebate disclosure, pass-through. Under the law, PBMs will be required to pass through 100% of the rebates they receive from drug manufacturers to the group health plan. This requirement is broad, and prohibits PBMs from pocketing not only rebates, but also “fees, alternative discounts, and other remuneration received” from the manufacturer.
In recent years PBMs have been criticized for their reliance on rebates, as research suggests they’re incentivized to favor higher-priced drugs in order to get higher rebates, which can lead to higher health costs for employers and workers.
Will employers see cost savings from these policies? Workers could ultimately see lower out-of-pocket prescription costs due to the reforms, which might spur health cost savings for employers, too, the New York Times reported. These effects are expected to save the federal government about $2 billion over a decade, according to a Congressional Budget Office estimate.
In recent weeks it’s become clear that targeting PBMs is a priority for President Donald Trump’s administration. On Jan. 29 the Department of Labor issued a proposed rule that would require PBMs to disclose information about how they make money, sharing details on rebates and other forms of compensation they receive from pharmacies and drug manufacturers. The proposal overlaps with a number of requirements included in the recently enacted spending package.
Additionally, the Federal Trade Commission recently announced a settlement with Express Scripts, one of the major three PBMs, which is owned by Cigna. The settlement derived from a 2024 administrative complaint filed by the FTC that alleged Express Scripts and the other two major PBMs artificially inflated the list price of insulin drugs for commercial gain.
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