For years, Congress has signaled that it desires to crack down on Pharmacy Profit Managers, the center males which have come beneath hearth for his or her vertical integration with insurers and their position in spiking drug prices.
This week, it lastly occurred by way of the Consolidated Appropriations Act of 2026, prompting employer teams together with the Purchaser Enterprise Group on Well being (PBGH) and the ERISA Business Committee to cheer its passage.
“Taken collectively, the bipartisan well being care reforms on this legislation will decrease well being care prices for employers and staff alike, introduce new accountability for PBMs, and can ship purchasers an unprecedented quantity of transparency into their pharmacy profit plan,” in accordance with an announcement from PBGH.
However the actuality is extra sophisticated. Whereas it’s true that there have been main positive aspects made by employers, one of the vital important elements of the legislation — the delinking of PBM compensation from the worth of a drug in Medicare Half D — eluded employer teams. This can be a provision within the new legislation that solely applies to Medicare Half D, in accordance with Jesse Dresser, a accomplice in Frier Levitt’s Life Sciences Division.
In Medicare Half D, unfold pricing was additionally prohibited as PBMs will now not be capable of derive any income tied to the price of the drug, Dresser said. Unfold pricing happens when a PBM costs a well being plan extra for a drug than it pays the pharmacy and retains the distinction as revenue. The modifications will take impact in 2028.
Employers, in the meantime, didn’t get a ban on unfold pricing, famous Shawn Gremminger, president and CEO of the Nationwide Alliance of Healthcare Purchaser Coalitions. Neither did they get the “longshot ask” of creating PBMs fiduciaries to their shoppers, which might require PBMs to behave in the very best monetary curiosity of employers.
Nonetheless, this shouldn’t diminish what the legislation achieves, as it’s a “huge deal and can meaningfully change the best way PBMs function within the industrial area,” Gremminger mentioned.
If delinking from listing worth, a ban on unfold pricing and PBMs not turning into fiduciaries to clients in the end failed within the ultimate passage, what positive aspects have been made?
What the legislation does embrace for employers is a requirement for PBMs to offer extra detailed reporting to plan sponsors, resembling an inventory of lined medicine disbursed, prescriptions disbursed by affiliated pharmacies and data on biologics and biosimilars. As well as, PBMs are mandated to move alongside all rebates, reductions, charges and different funds they obtain on medicine on to employers or group well being plans.
“After eight years, ERIC-led reforms to the PBM business that instill larger accountability and transparency made it throughout the objective line, and the consequence can be decrease drug prices for greater than 160 million Individuals who get their medical health insurance via a job,” mentioned James Gelfand, president and CEO of the ERISA Business Committee, in an announcement.
This does put PBMs on the street to larger transparency, however the battle will not be gained.
As Wendell Potter identified in his publicationemployers may very well get a few of what they need by way of a rule the Division of Labor lately proposed. The rule would require PBMs to reveal all rebates and different funds from producers to employer-sponsored well being plan fiduciaries, together with any compensation tied to the distinction between plan funds and pharmacy reimbursements. It additionally permits fiduciaries to audit these disclosures and offers protections if PBMs fail to conform.
“With the brand new Consolidated Appropriations Act of 2026, together with the Division of Labor’s proposed regulation, I do assume that there can be some extra safety, extra reduction aimed toward compelling disclosure of sure data,” Dresser mentioned.
Nonetheless, in accordance with Gremminger, whereas the Division of Labor’s proposed rule and the Consolidated Appropriations Act of 2026 give purchasers “unprecedented transparency” into PBMs, employers nonetheless gained’t have the whole lot they’re searching for.
“Even after each the regulation and the legislation are carried out, PBMs will nonetheless be allowed to have interaction in unfold pricing and hyperlink their charges to the worth of medicine within the industrial market. PBMs will nonetheless not be statutory fiduciaries,” Gremminger mentioned. “The occasions of the previous week are an enormous leap ahead, however far more must be accomplished.”
Dresser additionally famous that it’s doable that the Division of Labor’s proposed rule might change down the road, particularly given the truth that it was launched in the identical week because the Consolidated Appropriations Act of 2026.
“A few of what they’re trying to do within the new rules is already being directed by legislation and in addition requires the enactment of rules aimed toward imposing and implementing these new guidelines,” he mentioned. “So I do assume that there’s a risk that this explicit iteration of the Division of Labor’s proposed regulation doesn’t undergo, however as a substitute it will get sort of transformed into one thing that perhaps extra aligns with the lately enacted legislation.”
He added that it’s unlikely for future iterations of the DOL rule to incorporate a ban on unfold pricing, as it will doubtless want congressional motion. Nonetheless, it’s doable it may come from company enforcement motion. He pointed to the current FTC settlement with Categorical Scripts over insulin, wherein Categorical Scripts agreed to a sequence of modifications, together with shifting away from a mannequin that includes rebates.
Corporations that serve employers are additionally applauding the efforts made to rein in PBMs, together with Carrum Well being.
“We’re happy to see these developments within the strategy to PBM pricing and compensation as it would create extra transparency for employers,” mentioned Doug Cole, vice chairman of well being plan partnerships at Carrum Well being.
In the meantime, AJ Loiacono, CEO of Judi Well being (a tech-enabled PBM previously Capital Rx), agrees that this can be a main step ahead, however acknowledges that extra must be accomplished. For instance, the legislation doesn’t handle PBMs steering sufferers to affiliated specialty pharmacies or vertical integration. Judi Well being payments itself as a clear PBM.
“When PBMs personal mail-order and specialty pharmacies, they’ve monetary incentives to steer sufferers towards these channels—usually at greater price to the plan. Higher transparency into affiliate pharmacy pricing and utilization is a good begin, however structural separation might in the end be wanted,” he mentioned.
In different phrases, Loiacono is suggesting that PBMs be damaged up such that an insurance coverage firm, a PBM and a pharmacy don’t have the identical company dad or mum, as is the case with many massive PBM gamers at this time. Which may be the longest shot of all of them.
Photograph: cagkansayin, Getty Photos
