Pharmacy benefit managers have operated behind some of the most difficult parts of an employer’s health plan to examine. Employers may know what they spent on prescription drugs and how much they received in rebates, yet still have an incomplete view of how the PBM earned revenue or whether the arrangement delivered a competitive net cost.
New federal requirements are intended to bring more information into view. The Consolidated Appropriations Act, 2026, includes:
Some requirements will take effect over time, but employers should not wait to consider what they mean. A PBM contract negotiated now may remain in place as the rules change. The better question for 2026 is whether the employer’s current agreement already provides the access and protections that stronger oversight requires.
PBM reports have often provided a partial account of pharmacy performance. An employer may receive utilization totals or rebate figures without seeing how the plan’s charges compare with payments made to pharmacies. Revenue retained elsewhere in the arrangement may be even more difficult to identify.
The new provisions are expected to expand the information available to employers. Depending on the applicable requirements, that information may include:
This can give employers a more complete financial picture, provided the data is delivered in a form they can review. Employers should have the right to share relevant information with an independent advisor or auditor and verify whether the PBM met its contractual commitments.
Without those rights, additional reporting may add pages but not much understanding.
PBM compensation is rarely limited to the administrative fee shown in a proposal.
Revenue may be generated through rebate arrangements or the difference between what the plan is charged and what a pharmacy is paid. Additional payments may move through companies connected to the PBM. Those relationships are not always evident when an employer compares proposals.
The advisor making the recommendation may also have a financial interest in the selection. If the employer does not know how the advisor is paid, it cannot fully evaluate the advice it receives.
Before selecting or renewing a PBM, employers should request a written disclosure that addresses:
The response should explain the arrangement rather than rely on broad language stating that indirect compensation may be received.
A large rebate guarantee can make a PBM proposal appear more competitive, but it does not necessarily mean the plan will spend less.
A higher-cost drug may produce a larger rebate than a lower-cost alternative. When the rebate receives most of the attention, the employer can lose sight of the original price and the amount paid after all revenue and fees are accounted for.
Useful comparisons begin with total net cost. It should also examine how the PBM’s decisions affect employees. Formulary changes may alter access to a medication. Prior authorization rules can delay treatment, and pharmacy requirements may shift costs or create additional steps for members.
Rebates are part of the calculation, but they should not become a substitute for evaluating the full pharmacy program.
PBM proposals often emphasize pricing discounts and performance guarantees. Their actual value depends on the contract definitions behind them.
The agreement determines which claims are included, how drugs are classified, and whether certain medications or pharmacy channels are excluded. Those terms can make a guarantee look stronger without improving what the plan ultimately pays.
Employers should be able to answer a few practical questions before accepting the financial terms:
A guarantee is difficult to rely on when the PBM controls both the calculation and the information used to test it.
Many PBMs are connected to other companies that participate in the pharmacy program. A related business may operate the specialty pharmacy, negotiate manufacturer payments, or manage another part of the purchasing process.
Those connections can affect how prescriptions are filled and where revenue is retained. An employer may focus on the PBM’s disclosed fees while overlooking payments earned by another company under common ownership.
Contract review should identify each organization involved and explain its role. Employers should also understand whether the PBM directs members toward an affiliated pharmacy and how that decision affects plan cost.
The financial review is incomplete when it stops with the company whose name appears on the agreement.
The direction of PBM reform gives employers a reason to strengthen their requirements now. The review should begin early enough to examine the agreement, test the financial projections, and negotiate changes before renewal deadlines limit the available options.
Employers should prioritize:
These requests are not only about preparing for future regulation. They give employers a better basis for managing the pharmacy program they have today.
Federal reform may improve what employers can see, but it will not evaluate a PBM contract or investigate an unexpected increase in pharmacy spending.
Employers will still need to review how the plan is performing and determine whether the arrangement remains competitive. They will need to ask how the PBM earns money, how financial guarantees are measured, and whether members are experiencing avoidable barriers to care.
They should expect the same level of openness from the advisor guiding the decision.
PBM reform is raising the standard for disclosure. Employers can use that momentum to establish a stronger standard of their own.
PBM oversight begins before an employer reviews the contract. It begins with understanding how the recommendation was developed and whether the advisor has a financial interest in the decision.
Employers should know how their advisor is compensated and whether that compensation changes based on the PBM selected. They should also expect the recommendation to account for contract terms, pharmacy data, total net cost, and the experience of employees using the plan.