The first quarter of 2026 marked a turning point in federal oversight of pharmacy benefit managers (PBMs), the intermediaries that manage prescription drug benefits for most health plans across the commercial insurance market, Medicare Part D, and other programs. New legislation, agency rulemaking, and enforcement activity collectively signal a new phase of oversight that could materially reshape PBM contracting, compensation, and transparency requirements.
Most notably, the following developments stand out:
- The聽US Department of Labor (DOL)聽聽new disclosure requirements for PBMs聽that聽serve聽self-insured聽Employee Retirement Income Security Act聽(ERISA)聽plans.聽
- The聽Consolidated Appropriations Act聽of聽2026 (CAA 26),聽聽February 3,聽2026, establishes聽comprehensive PBM聽transparency and contracting聽requirements聽in the聽commercial insurance market and Medicare Part D.聽
- The聽Federal Trade Commission (FTC)聽聽a settlement聽with Express Scripts, Inc.聽(ESI),聽requiring significant聽changes to聽ESI鈥檚聽business practices.聽
Together, these actions signal a trend toward greater PBM accountability, with implications for plans, pharmacies, manufacturers,聽and聽consumers.聽This article provides a high-level overview of the major聽recent聽developments聽in the PBM reform policy landscape, along with key considerations for聽stakeholders.聽
Medicare Part D: Key Statutory Changes
Beginning in plan year 2028, CAA 26 makes significant changes for PBMs operating in Medicare Part D. Key provisions include:
- Requiring聽PBMs to聽provide聽annual reports to聽plan sponsor clients聽detailing aggregate and drug-specific costs聽
- Restricting聽PBMs compensation聽structures, prohibiting payments tied to drug prices, rebates, or price-based benchmarks聽and聽limiting PBMs to only receive聽bona fide service fees that reflect聽fair market value聽
- Stipulating聽additional聽parameters related to rebate guarantees, contract terminology, and audit rights聽
Additional provisions that will take effect in beginning with plan year 2029 include:
- A requirement that聽plan聽sponsors and PBMs聽comply with聽forthcoming聽standards for 鈥渞easonable and relevant鈥澛爌harmacy聽contracting terms and conditions聽
- Expansion of聽the聽enforcement infrastructure聽to avert聽potential violations of聽the program鈥檚聽pharmacy contracting聽requirements聽
Key considerations: The Centers for Medicare & Medicaid Services (CMS) has broad discretion in implementing these provisions, including setting pharmacy contracting standards, determining which PBM affiliates are subject to new requirements, and defining 鈥渇air market value.鈥� PBMs will face expanded reporting and compliance obligations, while plans and other stakeholders will have opportunities to shape implementation through the regulatory process.
Commercial Health Insurance Market: Key Statutory Changes
For the commercial market, CAA 26 establishes similar transparency requirements for PBMs that serve fully insured and self-insured plans, with reporting required up to four times per year. Unlike Medicare Part D, the statute does not prohibit pricelinked compensation in the commercial market, but it does require detailed disclosure of PBM fees and revenue streams. For contracts with selfinsured plans, PBMs must remit 100 percent of rebates and fees tied to drug utilization, subject to specified limitations.
Key considerations: These provisions significantly expand federal oversight in the commercial market. PBMs will need to scale compliance infrastructure, while employers and other plan sponsors may seek enhanced analytical and actuarial support to interpret disclosures and assess PBM performance.
Medicaid Left Out, For Now.
Unlike prior , CAA 26 does not include Medicaid-specific PBM reforms, such as on spread pricing (i.e., a PBM charges a payer more than the amount it pays the dispensing pharmacy for a prescription) and expanded National Average Drug Acquisition Cost () reporting.
Key considerations:聽These policies聽continue to have聽聽and聽could聽reemerge in legislation.聽States,聽PBMs,聽and managed care plans聽should continue聽monitoring聽for聽renewed federal action聽on these policies.聽
DOL鈥檚 Proposed PBM Fee Disclosure Rule
DOL鈥檚 proposed , 鈥淚mproving Transparency Into Pharmacy Benefit Manager Fee Disclosure,鈥� would require PBMs serving self-insured ERISA plans to information about rebates, manufacturer fees, pharmacy payments, and spread pricing. In late February, DOL the public comment period to April 15 to allow stakeholders to address how the proposed rule should align with the newly enacted CAA 26 provisions.
Key considerations: DOL could withdraw the proposal in favor of the statutory framework or could finalize the rule to take effect before the CAA 26 requirements begin. Either path would further increase near-term compliance for PBMs and plan sponsors, and stakeholders should monitor this space closely.
FTC Settlement with ESI
罢丑别&苍产蝉辫;贵罢颁鈥檚&苍产蝉辫; with ESI resolves insulin-focused against the PBM and imposes extensive requirements related to transparency, compensation, rebates and fees, and benefit design. The settlement also includes less common provisions, such as a commitment to reshore and increase disclosures related to ESI鈥檚 rebate group purchasing organization (GPO) functions.
Key considerations: If similar settlements are reached with other PBMs, the FTC could play an expanded role in shaping PBM market behavior, supplementing legislative and regulatory reforms with enforcement-driven standards.
State Efforts to Regulate PBMs
States continue to pursue PBM reforms, with of laws enacted in recent years addressing licensure, reporting, pharmacy reimbursement, and contracting standards. Although the Supreme Court鈥檚 2020 in Rutledge v. PCMA opened the door to certain state-level reforms, have narrowed the scope of permissible state regulation, particularly when ERISA preemption or Medicare Part D conflicts arise.
Key considerations: Stakeholders operating across multiple markets and states will continue to face a complex and evolving patchwork of requirements, underscoring the importance of ongoing policy tracking and compliance coordination.
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Recent federal and state actions suggest that PBM reform is entering a more operational phase defined by transparency聽and聽enforceable standards governing compensation, contracting, and market聽behavior. As implementation unfolds, stakeholders across the prescription drug supply chain will need to engage closely with regulators, assess new data flows, and adapt聽their聽business practices to a more prescriptive oversight environment.聽
For more information about the policies described鈥痠n this article and the PBM policy landscape more broadly, please contact our experts or Stephen Palmer.
