The Trump administration finalized a federal rule Thursday requiring pharmacy benefit managers to reveal how much money they collect from drugmakers, pharmacies and employer health plans, including rebates, fees and profits tied to prescription drug pricing arrangements. The new requirements also give large self-insured health plans the right to independently audit those disclosures, offering employers a clearer view of how billions of dollars in prescription drug spending are managed.
Announced by the Department of Labor on October 29, 2026, the rule targets pharmacy benefit managers, known as PBMs, which negotiate drug prices, help determine which medications health plans cover and manage pharmacy networks. Federal officials estimate that greater transparency could save employers and workers as much as $22 billion over the next decade through more favorable prescription drug contracts.
Among the payments PBMs and their affiliates must disclose are manufacturer rebates, incentives for placing particular medications on covered drug lists and profits from spread pricing. Under that practice, a PBM charges a health plan more for a prescription than it reimburses the pharmacy and keeps the difference. The rule also requires disclosure of payments recovered from pharmacies and compensation collected through affiliated businesses.
Large employers will gain access to those details before entering or renewing contracts. PBMs must then report their actual compensation every six months, or quarterly if requested. Payments exceeding initial estimates by 5% or more generally require an explanation.
Health plans can choose independent auditors to examine those disclosures at least once a year. PBMs generally must provide requested records within 60 days, including relevant contracts with drug manufacturers, pharmacies and rebate aggregators.
The requirements apply to large, self-insured employer health plans, generally those covering at least 100 participants or offered by employers with at least 100 workers. Under these arrangements, employers directly pay workers’ covered medical claims and bear the financial risk. PBMs and affiliated brokers or consultants expecting at least $1,000 in compensation fall within the regulation.
The ERISA Industry Committee, which represents large employers, welcomed the rule. Its president and CEO, James Gelfand, said employers that finance workers’ prescriptions often have limited visibility into how much money their PBMs retain. The organization said the disclosures could help companies identify spread-pricing arrangements and negotiate lower costs.
The Pharmaceutical Care Management Association, which represents pharmacy benefit managers, warned that the regulation could increase prescription drug costs and reduce competition. Its president and CEO, David Marin, argued that federal legislation enacted earlier this year already established extensive reporting requirements and that additional obligations could place a heavy burden on smaller PBMs.
Marin also questioned whether the Labor Department had exceeded its authority and said the association would evaluate possible responses to the regulation.
The rule was issued under the Employee Retirement Income Security Act, or ERISA, which requires those responsible for managing employee benefit plans to act in participants’ interests. Plan fiduciaries must evaluate whether contracts with service providers and the compensation they receive are reasonable, making access to PBM financial information an important part of that oversight.
The administration’s action follows an April 2025 executive order directing federal agencies to increase transparency in prescription drug pricing. Congress expanded disclosure requirements for health plan service providers through legislation enacted in February 2026, while the Labor Department’s final rule establishes more detailed obligations for PBMs serving large, self-insured plans.
The regulation takes effect 60 days after publication in the Federal Register. Its reporting and audit requirements will apply to plan years beginning on or after July 1, 2027.
