On Feb. 3, 2026, the Consolidated Appropriations Act (CAA) of 2026 was signed into law, a funding package containing significant reforms for the pharmaceutical benefit manager (PBM) industry. As background, health plans generally rely on PBMs to process prescription drug claims, design pharmacy networks and negotiate rebates from drug manufacturers. In recent years, the PBM industry has faced growing scrutiny amid questions from stakeholders regarding a lack of transparency and certain practices, such as retaining a share of drug manufacturer rebates.
To address these growing concerns, the CAA creates the following new disclosure requirements, effective for plan years beginning on or after Aug. 3, 2028:
- PBMs must provide group health plans and health insurance issuers with detailed drug spending data at least twice per year, or quarterly if requested. PBMs must also supply drug spending summary documents that health plans can share with participants upon request.
- Each year, health plans must provide participants and beneficiaries with a written notice explaining that their PBM is required to submit prescription drug spending reports.
In addition, in order for their contracts to be considered reasonable under the Employee Retirement Income Security Act, PBMs must pass on 100% of all rebates, fees, alternative discounts and other remuneration to health plans and issuers. This change is also effective for plan years beginning on or after Aug. 3, 2028.
Separately, the U.S. Department of Labor announced on Jan. 28, 2026, a proposed rule that would establish new PBM fee-disclosure obligations, further underscoring the federal government’s increasing focus on regulatory oversight of the industry.
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