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.