Last Week the DOL, Today Congress: PBM Transparency and Compensation Disclosure Requirements

As we told you on Friday, the DOL released proposed regulations requiring PBMs to disclose up to 8 “types” of compensation streams to a self-insured group health plan in accordance with ERISA’s section 408(b)(2)(B) Compensation Disclosure requirements (which you can read here, along with a 2-page summary of these proposed regs here).

And today, in a “1-2 punch” for PBM transparency, Congress enacted legislative language that would require a PBM to disclose to a group health plan, among other things, PBM payment practices including the receipt of rebates, price concessions, and “spread pricing,” along with the gross and net costs of prescription drugs in the PBM’s drug formulary, and other information like whether the PBM is dispensing covered drugs through PBM-owned pharmacies, mail-order, or specialty programs.  Below is a bullet-pointed list of information that PBMs must now disclose to the plan.

And to pile on, this legislative language also amended ERISA section 408(b)(2)(B) to delete the references to “Brokerage Services” and “Consulting,” and instead, clarified that any plan service provider that furnishes the “types of services” included in the statute’s enumerated “list of services” are subject to the 408(b)(2)(B) Compensation Disclosure requirements.  This amendment is intended to confirm that (1) PBMs that perform “pharmacy benefit management services” and (2) TPAs that perform “third-party administrative services” (both of which are “types of services” included in the statute’s enumerated “list of services”) are required to disclose “direct” and “indirect” compensation to a plan’s fiduciary in accordance with ERISA section 408(b)(2)(B).

And not to be outdone, this recently enacted legislation also requires a PBM to pass through 100% of the rebates paid to the PBM by a drug manufacturer to the plan itself.

The proposed regulations, and now this legislation, include industry-changing requirements, and only time will tell how transformative they may be.  We will keep you posted…

Bullet-Pointed Summary of Required PBM Transparency Disclosures

• Effective for the first plan year starting 30 months after the date of enactment, an entity providing pharmacy benefit management services (e.g., a PBM) on behalf of a group health plan must furnish to the group health plan every 6 months (or quarterly if requested by the group health plan) a report in a Machine-Readable Format with the following information relating to the prescription drugs covered under the group health plan:

• A list of covered drugs for which a claim was filed and the proprietary name and National Drug Code for each drug.

• The amount of compensation paid by the plan to the PBM for each covered drug.

• The amount of compensation the PBM paid to a pharmacy for each covered drug.

• The difference between the amount of compensation (1) paid by the plan to the PBM and (2) paid by the PBM to the pharmacy for each covered drug.

• The type of dispensing channel used to furnish each covered drug (e.g., retail, mail-order, or specialty).

• With respect to each drug dispensed through any of these channels, disclose (1) the “wholesale acquisition cost” (in the case of a brand-name drug) and (2) the “average wholesale price” (in the case of a generic drug).

• With respect to the brand-name and generic drugs, disclose (1) the original prescription and refill claims, (2) the participants and beneficiaries for whom a claim was filed through any one of the dispensing channels, (3) the dosage units and dosage units per fill, and (4) days supply of such drug per fill.

• The net price, after rebates, fees, or discounts received from a drug manufacturer, per course of treatment or single fill.

• The total amount of participant out-of-pocket spending for each covered drug.

• The total net spending for each covered drug.

• The total amount received, or expected to be received, by the plan from a drug manufacturer in rebates, fees, or discounts.

• The total amount received, or expected to be received, by the PBM from a drug manufacturer in rebates, fees, or discounts (1) for claims incurred and (2) related to utilization of a drug or spending on a drug.

• If applicable, the total amount of copay assistance, copay cards, or other discounts offered by each drug manufacturer to plan participants.

• A list of each “therapeutic class” for which a claim was filed and with respect to each such “therapeutic class” (1) the total gross spending on drugs in such class before rebates, price concessions, or discounts, (2) total net spending in such class after rebates, price concessions, or discounts, (3) total amount received, or expected to be received, by the PBM from a drug manufacturer in rebates, price concessions, or discounts for (a) claims incurred and (b) related to utilization of a drug or spending on a drug.

• The average net spending per 30-day and per 90-day supply by the plan among all drugs within the “therapeutic class” for which a claim was filed.

• The number of participants and beneficiaries who filled a prescription for a drug in such “therapeutic class,” including the National Drug Code for each drug.

• If applicable, a description of the formulary tiers and utilization mechanisms (e.g., prior authorization or step therapy) for the drugs in the “therapeutic class.”

• The total amount of participant out-of-pocket spending for the drugs in the “therapeutic class.”

• With respect to any drug for which gross spending under the plan exceeded $10,000 during the 6-month reporting period OR in the case that gross spending under the plan exceeded $10,000 during the 6-month reporting period with respect to fewer than 50 drugs:

• The highest gross spending for the 50 covered drugs under the plan.

• For the 50 covered drugs with the highest gross spending during the 6-month reporting period, (1) a list of all other drugs in the same “therapeutic class” as these drugs, (2) the rationale for the formulary placement of such drug in that “therapeutic class,” and (3) any change in formulary placement from plan year to plan year

• If the PBM providing services to the plan owns a pharmacy, or owns a mail-order or specialty home delivery program, or owns a retail and mail auto-refill programs, or provides cost-sharing assistance funded by the PBM, this PBM must:

• Provide an explanation of any benefit design parameters that encourage or require participants and beneficiaries to fill prescriptions at the PBM-owned mail-order, specialty, or retail pharmacies.

• Provide the percentage of total prescriptions dispensed by such PBM-owned pharmacies to plan participants.
• Provide a list of all drugs dispensed by such PBM-owned pharmacies to plan participants including (1) the amount charged to the plan per dosage unit or 30-day or 90-day supply, (2) the median amount charged to the plan and the interquartile range of the costs per dosage unit or 30-day or 90-day supply, including amounts paid by plan participants, when the same drug is dispensed by pharmacies NOT owned by the PBM, (3) the lowest cost per dosage unit or 30-day or 90-day supply for each drug, including amounts charged to the plan and participants, that is available from ANY pharmacy in the plan’s network, and (d) the net acquisition cost per dosage unit or 30-day or 90-day supply if such drug is subject to a maximum price discount.

If you have questions or comments, please contact Chris Condeluci at ccondeluci@siia.org or Anthony Murrello at amurrello@siia.org.

Source, Self-Insurance Institute of America, Inc., personal communication, February 3, 2026