U.S. Labor Department finalizes PBM transparency rule

The U.S. Department of Labor has finalized a new regulation requiring pharmacy benefit managers (PBMs) to disclose detailed information regarding their compensation and fees to large, self-insured employer health plans. The rule, issued under the Employee Retirement Income Security Act (ERISA), aims to increase transparency in the pharmaceutical supply chain by forcing PBMs, brokers, and consultants to reveal payments received from drugmakers and pharmacies.

Key provisions include requiring PBMs to provide granular data on pharmaceutical prices and compensation upfront, before contracts are signed or renewed. The regulation also grants employers the right to audit their PBMs and mandates explanations regarding “spread pricing,” a practice where employers pay more for a medication than the pharmacy receives in reimbursement.

The rule targets self-insured plans with 100 or more participants or employers with at least 100 employees. Regulators from the Employee Benefits Security Administration estimate the transparency measures could reduce drug costs for employers and workers by $22 billion over the next decade. The rule is scheduled for publication in the Federal Register on November 2, becoming effective January 4, 2027, for plan years beginning on or after July 1, 2027.