Labor Department finalizes rule requiring PBMs to disclose fees and compensation

On October 29, 2026, the Department of Labor finalized a rule requiring pharmacy benefit managers to disclose fees, manufacturer rebates, and spread pricing to self-insured employer clients. Taking effect July 1, 2027, the regulation targets over 70 PBMs and 130,000 employers, with federal officials projecting $22 billion in employer and worker savings over a decade. While employer groups applaud the transparency, PBM trade groups oppose the rule as redundant overreach.

Timeline and scope of the disclosure rule

• ▪The Department of Labor finalized a rule, requiring pharmacy benefit managers to disclose fees and compensation to self-insured employer clients
• ▪Pharmacy benefit managers must share compensation and payment disclosures when negotiating or renewing employer contracts and every six months thereafter starting July 2027

Disclosure requirements and enforcement

• ▪The Department of Labor rule finalized October 29, 2026, allows employers to audit pharmacy benefit manager compensation disclosures once per year
• ▪Under the Department of Labor rule finalized October 29, 2026, pharmacy benefit managers must disclose drug rebates, spread pricing payments, and financial relationships with brokers and consultants
• ▪Pharmacy benefit managers failing to comply with the Department of Labor disclosure rule finalized October 29, 2026, face financial penalties and potential contract invalidation

Estimated financial impacts of the rule

• ▪The Department of Labor estimates pharmacy benefit managers will spend $1 million in the first year of its rule finalized October 29, 2026, and $300,000 annually in subsequent years to comply
• ▪Trump administration regulators estimate the Department of Labor disclosure rule finalized October 29, 2026, will lower drug costs for employers and workers by $22 billion over a decade

Support for the disclosure rule

• ▪Affirmed Rx Chief Executive Officer Greg Baker stated during an October 2026 press call that any entity opposing the Department of Labor rule finalized October 29, 2026, has something to hide
• ▪The ERISA Industry Committee cheered the Department of Labor rule finalized October 29, 2026, stating it enables self-insured employers to verify fee numbers and hold pharmacy benefit managers accountable

Relationship to the Consolidated Appropriations Act

• ▪The Pharmaceutical Care Management Association opposed the Department of Labor rule finalized October 29, 2026, as unnecessary government overreach, citing overlap with the Consolidated Appropriations Act of 2026
• ▪The Department of Labor clarified that its upfront shopping disclosure rule, finalized October 29, 2026, complements retrospective drug spending reports mandated under the Consolidated Appropriations Act of 2026

PBM market concentration and transparency

• ▪Cigna's Express Scripts, CVS's Caremark, and UnitedHealth's Optum Rx jointly control approximately 80% of all prescription drug coverage in the United States
• ▪Industry experts state that while Department of Labor transparency rules encourage PBM competition, disclosure rules alone cannot resolve market concentration among the top three PBMs—Express Scripts, CVS Caremark and Optum Rx