Labor Department Rule Forces PBMs to Disclose Hidden Fees to Employers
A new federal rule requires pharmacy benefit managers to reveal compensation from drug makers and pharmacies, potentially saving $22 billion over a decade.
The U.S. Department of Labor on Thursday finalized a rule compelling pharmacy benefit managers to disclose their fees and compensation arrangements to large employers that sponsor self-insured group health plans, marking the first time such financial relationships will be visible to plan administrators.
The regulation implements transparency provisions enacted by Congress in the Consolidated Appropriations Act, 2026, and aligns with an executive order directing federal agencies to increase accountability in prescription drug pricing. PBMs serve as intermediaries in the drug supply chain for employer-sponsored plans covering roughly 90 million Americans, yet those plans have historically been unable to determine the full extent of payments flowing to PBMs from drug manufacturers, pharmacies, and other parties.
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Under the final rule, PBMs must now disclose manufacturer rebates and other payments, compensation received when a plan's drug reimbursement exceeds what pharmacies are paid, and amounts recouped from pharmacies on dispensed prescriptions. Plan fiduciaries will also gain the right to audit PBM disclosures for accuracy. The Labor Department projects these transparency requirements could reduce prescription drug costs for health plans and participants by as much as $22 billion, undiscounted, over the next ten years.
Labor Secretary Keith Sonderling framed the action as a correction to longstanding opacity in drug pricing, while Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz said greater competition driven by transparency would translate into lower health care costs. The rule was issued under the Employee Retirement Income Security Act's service provider prohibited transaction exemption, which governs disclosure obligations for parties that do business with employer-sponsored benefit plans.
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