PBMs Must Now Disclose Fees to Employer Plans Under Final DOL Rule

The US Department of Labor (DOL) on Thursday finalized a rule requiring pharmacy benefit managers (PBMs) and their affiliated brokers and consultants to disclose their compensation with fiduciaries of large, self-insured employer health plans, according to a DOL release.¹ This compensation includes payments from drugmakers, spread pricing, and money clawed back from pharmacies, opening the door for unprecedented transparency in the drug supply chain.

“No longer will 136 million Americans be left in the dark about how much the PBM middlemen are trying to siphon off their paychecks,” said PatientRightsAdvocate.org Founder and Chair Cynthia A. Fisher, according to a release.² “This rule gives their employers long-sought leverage to run their health care plans by the numbers and crack down on rebates, recouped payments, spread pricing, and other PBM profiteering.”

For practicing community pharmacists who have spent years fighting underwater reimbursements and arbitrary post-sale copay clawbacks, the regulation represents a direct response to industry advocacy.^1,3

READ MORE: Pharmacies Face Persistent MFP Cash Crunch Amid PBM, 340B Shifts

The National Community Pharmacists Association (NCPA) petitioned the DOL in August 2025 under President Trump's executive order on lowering drug prices, demanding that regulators enforce Employee Retirement Income Security Act (ERISA) rules that restrict intermediary earnings to bona fide service fees and eliminate percentage-based fees linked with escalating list prices.

By requiring full visibility into pharmacy recoupments, manufacturer rebates, and spread pricing, federal officials project the landmark rule will lower prescription costs for self-insured employer health plans and covered workers by as much as $22 billion over 10 years.¹

Unmasking Financial Middlemen and Restoring Pharmacy Oversight

Issued by the Employee Benefits Security Administration under ERISA section 408(b)(2)(B), the regulatory framework mandates that PBMs and covered service providers earning $1000 or more must provide detailed financial disclosures to plan fiduciaries.^1,4

Beginning for plan years on or after July 1, 2027, PBMs must issue initial written disclosures at least 90 days before contract execution, followed by semi-annual reports within 30 days after each period.⁴

These mandatory filings must explicitly break down spread pricing by individual medication and pharmacy distribution channel while detailing policies that steer patients toward PBM-owned mail-order or specialty outlets. Furthermore, plan administrators will gain annual audit rights to examine transaction data and drugmaker contracts without being limited to selective sampling.^2,4

For retail pharmacies struggling against hidden markups, the rule forces transparency around manufacturer incentives that dictate formulary placement and net drug pricing. Service providers must now report price protection agreements, manufacturer rebates, and specific reasons when lower-cost therapeutic alternatives are omitted from plan formularies.^4,5

Industry experts and lawmakers emphasized during a pre-announcement briefing that establishing net effective cost as the standard across the health care market is essential for employers to compare competitive bids.⁵

Representative Ryan Mackenzie noted that clearer financial accounting allows plan sponsors to see exact price concessions, complementing broader legislative efforts such as the Net Effective Cost Transparency and Prescription Drug Affordability Act of 2026.

Industry Dynamics and Long-Term Implications for Health Care Stakeholders

Supporters across health care and business coalitions have hailed the regulation as a long-overdue mechanism to curb skyrocketing drug spending, which currently accounts for roughly 27% of employer health expenditures. Executive leadership from private employers and advocacy groups noted that unmasked claims data empowers plan sponsors to eliminate hidden revenue streams and protect workers from inflated pharmacy expenses.^2,5

Federal officials from the DOL and the Centers for Medicare and Medicaid Services (CMS) highlighted that increased disclosure fosters genuine market competition and accountability across self-insured health plans representing up to 136 million Americans.^1,2

In contrast, PBM trade representatives expressed strong opposition, contending that existing federal statutory requirements under the Consolidated Appropriations Act of 2026 already mandate drug-by-drug transparency. Pharmaceutical Care Management Association (PCMA) leadership warns that duplicate administrative burdens could harm smaller benefit managers, drive market consolidation, and ultimately increase prescription costs for patients.^4,5

Nevertheless, pharmacy advocates maintain that establishing enforceable federal fee disclosure standards remains a vital milestone toward securing fair reimbursement practices and preserving community pharmacy access across the nation.^1,3

“The employers who pay PBMs to administer their health plans have been kept in the dark for many years when it comes to these fees and other forms of compensation,” said Ronna Hauser, PharmD, senior vice president of policy and pharmacy affairs with NCPA, according to a release.⁶ “This new rule creates additional transparency for the first time.”

READ MORE: Law and Regulations Resource Center

REFERENCES

1. US Department of Labor finalizes pharmacy benefit manager transparency rule, delivering big win for American workers, families. US Department of Labor. News Release. October 29, 2026. Accessed October 29, 2026. https://www.dol.gov/newsroom/releases/ebsa/ebsa20261029

2. PatientRightsAdvocate.org praises PBM transparency rule. Patient Rights Advocate. News Release. October 29, 2026. Accessed October 29, 2026. https://www.prnewswire.com/news-releases/patientrightsadvocateorg-praises-pbm-transparency-rule-302924000.html

3. NCPA asks Department of Labor to regulate PBM compensation under ERISA. NCPA. News Release. August 28, 2025. Accessed October 29, 2026. https://ncpa.org/newsroom/qam/2025/08/28/ncpa-asks-department-labor-regulate-pbm-compensation-under-erisa

4. Appezzato S. What DOL’s final PBM rule means for rebates and formularies. Pharmaceutical Executive. October 29, 2026. Accessed October 29, 2026. https://www.pharmaceuticalcommerce.com/view/what-dols-final-pbm-rule-means-for-rebates-and-formularies

5. Boyle E. DOL to unveil PBM transparency rule on Thursday. Plan Adviser. October 28, 2026. Accessed October 29, 2026. https://www.planadviser.com/how-artificial-intelligence-can-build-advisers-cybersecurity-strategy/

6. NCPA applauds Department of Labor final rule on PBM transparency requirements. NCPA. News Release. October 29, 2026. Accessed October 29, 2026.