The Future of PBMs: FTC, CAA, and DOL

For years, pharmacy benefit managers (PBMs) have faced growing calls for reform. Now, those calls are becoming reality. Executive orders, Congressional action, federal departmental rules, and antitrust settlements are advancing PBM and pharmacy benefit reform. The impact to plan sponsors is expected to be substantial. While elements are already known, there is still uncertainty about how these changes will unfold in the months and years ahead.

Federal Trade Commission (FTC) Settlements

The FTC sued each of the “Big 3” PBMs, claiming antitrust violations over artificial insulin price inflation. The FTC alleges that each of these companies worked with pharmaceutical manufacturers to drive up the list price of insulin in exchange for rebate dollars. Settlements have been announced with Express Scripts and CVS Caremark. While OptumRx was not explicitly announced as part of a settlement, it has discussed a settlement in shareholder reports, suggesting similar impact to their business model.

Themes of the FTC settlements include:

• Ending the preference for high list-price (WAC) drugs over lower-cost alternatives on standard formularies
• Passing through all rebates and discounts directly at the point of sale
• Eliminating spread pricing in standard offerings
• Delinking manufacturer compensation from list prices
• Providing drug-level reporting to plan sponsors
• Compensating retail pharmacies based on actual acquisition cost plus a dispensing fee
• Making TrumpRx available as part of a standard offering (with payments counting toward deductibles and out-of-pocket maximums once regulatory changes are implemented)

Notably, these settlements do not impose direct monetary penalties on PBMs for past conduct. The focus is on requiring changes to how PBMs operate going forward rather than punishing past behavior.

Consolidated Appropriations Act of 2026 (CAA)

The CAA, signed on February 3, 2026, enacts major reforms of pharmacy benefit managers. Key themes of the reform include transparency and reporting, full rebate pass-through, and audit rights. These new requirements apply to plan years beginning on or after January 1, 2029 (for calendar year plans). In its current form, the CAA also places new requirements on plan sponsors to disclose detailed information on drug costs, rebates, and related compensation to participants.

Department of Labor (DOL) Rules

Originating from President Trump’s Executive Order, Lowering Drug Prices by Once Again Putting Americans First, the DOL published proposed regulations to improve transparency around PBM compensation on January 30, 2026. The rules require disclosure of compensation information to fiduciaries of self-insured group health plans subject to ERISA. The public comment period for these rules has closed and the rule is currently pending.

Takeaways

Many of these reforms reflect trends already underway in the market. Pass-through pricing models, enhanced transparency, and drug-level reporting have been available for years. While available, the PBMs with the most purchasing power often didn’t provide the models and information requested by plans. At the same time, many plan sponsors didn’t make changes due to concerns over increased costs.

While the goal of these reforms is to lower costs, there are circumstances in which they could increase costs for plan sponsors. More money for independent pharmacies, providing rebates to high-cost patients, capping insulin copays, and adding higher-cost pharmacy options to the network all have negative cost implications. These reforms could also impact drug price negotiations in the future.

A fundamental question for plan sponsors is how PBMs will adapt to make their revenue targets in a reformed world. With rebate retention and spread pricing restricted, PBMs will likely seek increased administrative fees, service fees, or performance-based payments tied to cost savings. This shift means plan sponsors will need to evaluate several components of PBM compensation rather than relying on aggregate performance metrics to determine appropriateness.

While no immediate action is required by plan sponsors, awareness is important as additional details come out over the next several months, much of it leading up to 2028. This phased approach gives plan sponsors time to adapt but also requires sustained attention as each change develops.

Plan sponsors will have choices. It is not known how many choices they will have. We know the era of aggregate rebate guarantees is ending, at least for the “Big 3.” All have come out with their alternative rebate models, and it appears the FTC settlement forces a new approach to rebate payments. Point of sale rebates, presented as a standard offering, will likely continue to be an option for plan sponsors, rather than required. Reimbursement rates for pharmacies are likely decided by the PBM, but the plan sponsor may still have options to limit the pharmacy network of their plan. Plan sponsors may have to ask for certain deviations from the standard offering and opt out in writing. The amount of choice the plan sponsor has will come down to the most critical choice of all – which PBM they choose to work with.

What National CooperativeRx Does

As we have done for 23 years, National CooperativeRx will navigate this evolving market in the best interest of our member groups, because they are the owners. As we begin work on our 2028 PBM RFP, this changing regulatory landscape means multiple PBM models will be evaluated. The changing models have different implications for transparency, cost, and compliance with the new requirements. We have already spent significant time learning, analyzing, and negotiating contract language to adopt CVS Caremark’s drug-level rebate program. Details are forthcoming.

As the industry transitions through 2028 and beyond, National CooperativeRx’s role becomes even more valuable. By leveraging the collective buying power of our member groups, we are well positioned to navigate this transformation, ensure that compensation structures are appropriate, and capture the cost savings and transparency improvements these reforms promise.