Labor Department Forces PBMs to Disclose Hidden Fees to Employers
A new federal rule requires pharmacy benefit managers to reveal fees and payments, potentially saving health plans up to $22 billion over a decade.
The U.S. Department of Labor on Wednesday finalized a rule compelling pharmacy benefit managers to disclose fees and compensation arrangements to large employers that self-insure their workers' health coverage, marking the first time such intermediaries will be required to reveal what they receive from drug manufacturers, pharmacies, and other parties in the prescription drug supply chain.
The rule implements bipartisan transparency provisions enacted under the Consolidated Appropriations Act, 2026, and also fulfills directives in a Trump administration executive order aimed at lowering prescription drug costs. Pharmacy benefit managers serve as intermediaries for employer-sponsored self-insured group health plans covering roughly 90 million Americans, yet plan administrators have historically been unable to obtain a complete picture of PBM compensation flows.
Read more Democrats Win Congress: What It Means for Taxes and Business →
Federal officials projected the regulation will reduce prescription drug costs for health plans and their participants by as much as $22 billion on an undiscounted basis over 10 years. The rule, issued under the Employee Retirement Income Security Act's service provider prohibited transaction exemption, specifically mandates disclosure of rebates from drug manufacturers, payments received when plan costs exceed pharmacy reimbursements, and amounts recouped from pharmacies on dispensed prescriptions.
The rule additionally grants plan fiduciaries the right to audit the accuracy of PBM disclosures and establishes protections for fiduciaries when a PBM fails to comply with its obligations. Labor Secretary Keith Sonderling said the measure ends years of PBMs operating with limited financial transparency, while Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz framed the rule as part of a broader administration push to inject competition into the health care market.
Armed with clearer compensation data, employers can now negotiate contracts more effectively and potentially lower out-of-pocket prescription costs for workers and their families. Continue reading at DOL News Releases and Briefs.
