Labor Department Finalizes Rule Forcing Drug Middlemen to Disclose How They Are Paid

The Trump administration finalized a rule on Thursday that requires pharmacy benefit managers to tell employers and other health plan sponsors, in detail, how they are paid. Bloomberg Law reported that the rule, issued by the Employee Benefits Security Administration at the Department of Labor, sets new financial disclosure duties for the companies that manage prescription drug benefits for employer health plans and negotiate prices, rebates and pharmacy payments.

What the rule requires

Pharmacy benefit managers, known as PBMs, must disclose detailed compensation to plan sponsors, including revenue from drug manufacturer rebates and pharmacy contracts, Bloomberg Law reported. They must also disclose conflicts of interest, clarify their fiduciary role, and explain their authority to change a plan's drug formulary. Health plans will be entitled to an auditor of their choice and to the information they need to meet their legal responsibilities.

The Wall Street Journal reported that PBMs will have to tell employers upfront what compensation they expect to receive and give updates every six months on what they actually earned. The disclosures cover rebates and other payments from drugmakers, including payments that could steer patients toward certain drugs, payments collected through group purchasing organizations linked to a PBM, and spread pricing, where an employer pays more for a drug than the pharmacy is reimbursed for the same medicine. The proposed disclosure list also included clawbacks, payments recouped from pharmacies, and price protection arrangements.

Why employers pushed for it

The Labor Department presented the rule at a health care pricing transparency event on Thursday morning, with remarks from Labor Secretary Keith Sonderling, Centers for Medicare and Medicaid Services Administrator Mehmet Oz, White House Domestic Policy Council Director Vince Haley and Employee Benefits Security Administration Assistant Secretary Daniel Aronowitz, according to the National Community Pharmacists Association.

Pharmacy costs make up one quarter of employer health care spending and were slated to rise 12 percent in 2026, according to a Business Group on Health survey cited by Becker's. A KFF survey found that just under half of large employers said they get sufficient insight into rebates and other payments from drug manufacturers. A separate survey by benefits consultant WTW, cited by the Journal, found that only 18 percent of employers were satisfied enough with their PBM to recommend it to others. Representative Ryan Mackenzie of Pennsylvania told a briefing on Wednesday: "To make informed decisions, employers need a clearer picture of what they're actually paying for prescription drugs."

What comes next

Bloomberg Law reported that the final rule sets up a potential legal battle with the industry. The rule is scheduled to take effect in July 2027 and apply to self-insured employers, the Journal reported. The largest PBMs, including Cigna's Express Scripts and CVS Health's Caremark, say they reduce drug costs by negotiating with manufacturers and have been rolling out models they describe as more transparent. The Federal Trade Commission has also been working on settlements with major PBMs over allegations that they inflated insulin list prices. The Labor Department first proposed the disclosure rule in January, following an April 2025 executive order that directed the administration to work on lowering health care costs.