Labor Department makes pharmacy benefit managers disclose their pay to large employer plans

The Labor Department has finalized a rule that requires pharmacy benefit managers, the middlemen that manage prescription drug benefits for employer health plans, to tell large self-insured plans how much they are paid, including by drugmakers and pharmacies. The department's Employee Benefits Security Administration announced the rule on October 29. The final text is available for public inspection and is due to appear in the Federal Register on November 2.

The rule takes effect 60 days after publication and applies to plan years beginning on or after July 1, 2027. It covers self-insured plans of employers that averaged at least 100 employees in the previous year, and self-insured plans with at least 100 participants. The department estimates there are 131,102 such plans, covering 52.9 million people aged 18 to 64, counting workers and their family members.

What PBMs must disclose

Pharmacy benefit managers, or PBMs, organize pharmacy networks, negotiate payments to pharmacies and rebates from drugmakers, set the lists of drugs a plan covers and process claims. They are paid by the plans and also by others in the drug supply chain, and the department says concerns that PBMs do not fully disclose that compensation to plans go back many years. Under the rule, PBMs must disclose for the first time:

• rebates and other payments from drug manufacturers
• compensation when the price a plan pays for a drug is higher than what the pharmacy is reimbursed, known as spread compensation
• payments recouped from pharmacies for drugs dispensed to plan members

PBMs must make a first disclosure when a contract is signed, extended or renewed, then report every six months, or every quarter if the plan asks. Plans may audit the disclosures, and brokers and consultants affiliated with a PBM that advise employers on drug benefits must disclose their pay too.

This is a win for every American worker who has ever paid too much at the pharmacy counter.

What it could mean for your costs

The disclosures go to the employer's plan, not to workers. The department says employers can use them to negotiate contracts and seek lower drug costs for workers and their families. In the rule's analysis, it assumes prescription prices fall 1%, drawing on a Congressional Budget Office estimate, and puts the resulting transfer from PBMs to plans and enrollees at about $818.4 million a year, within a range of $409.2 million to $1.64 billion. Its news release puts the potential savings at "as much as $22 billion (undiscounted) over 10 years." The department estimates compliance costs at about $60 million a year, mostly for PBMs' computer systems and for preparing disclosures and audits.

How the rule changed since January

The department proposed the rule on January 30. The proposal applied to all self-insured plans and would have applied to plan years beginning on or after July 1, 2026. The final rule is limited to large plans, starts a year later and exempts plans whose sponsors are, or are affiliated with, drug manufacturers, distributors, wholesalers or rebate aggregators. Commenters had told the department that smaller employers could struggle to analyze the detailed disclosures, and the department said the information may be most useful to larger employers, which are more likely to have compliance staff.

The rule carries out disclosure requirements in the Consolidated Appropriations Act, 2026, enacted on February 3, 2026, and an April 2025 executive order on drug prices. More of that law takes effect for plan years beginning on or after August 3, 2028: PBMs will then have to pass rebates and other payments from drugmakers through to the plans, and give plans detailed reports on drug spending every six months, or quarterly on request.

Workers and employers with questions can contact the Employee Benefits Security Administration at askebsa.dol.gov or 1-866-444-3272. Our explainer on how a federal rule is made describes the steps from proposal to final rule.