Large U.S. employers will get more detail about what their pharmacy benefit managers earn under a new Labor Department rule published Nov. 2. It covers large self insured health plans and certain PBM related service providers, giving plan fiduciaries information they can use when they negotiate or review contracts. The rule creates a right to see compensation. It does not require a PBM to lower drug prices or guarantee an employer will save money.
- Federal Register publication
- November 2, 2026
- Rule effective
- January 4, 2027
- Applies to plan years beginning
- July 1, 2027 or later
- DOL savings estimate
- $22 billion over ten years, as reported by HR Dive
Employers gain a way to inspect PBM compensation
The Federal Register's record of the final rule says covered pharmacy benefit management providers, along with affiliated brokerage and consulting providers, must disclose direct and indirect compensation to fiduciaries of large self insured group health plans covered by ERISA. That gives employers a way to assess what their contractors receive when deciding whether contract terms are reasonable.
The Department says pharmacy spending is a major driver of employer health costs and is growing faster than medical and surgical spending. The rule does not set drug prices or require a PBM to pass any savings to a health plan.
The disclosures include rebates and spread payments
The detail goes beyond a single management fee. HR Dive reported that disclosures will cover rebates drugmakers pay and spread payments a PBM retains when a health plan pays more for a prescription than the PBM reimburses a pharmacy.
PBMs must share the information during contract negotiations or renewals and every six months. Plan fiduciaries can audit the disclosures once a year, according to HR Dive.
The Labor Department expects the rule to lower drug spending by $22 billion over ten years, HR Dive reported. That figure is the administration's estimate, not a guaranteed reduction in employer bills or workers' prescription costs.
The first disclosures will take time to arrive
The rule takes effect Jan. 4, 2027, but applies only to plan years beginning on or after July 1, 2027. A plan on a calendar year schedule will generally first fall under the rule in 2028, so employers have time to review contracts before the new disclosure cycle applies.
PBM industry groups argued the department lacks legal authority to require the disclosures and that new reporting costs could disadvantage smaller providers. The rule gives employers new information to use in contract decisions, while leaving its effect on prices and competition to unfold.
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