Regulatory Updates
Regulatory Updates provide quick access to employee benefit regulations, rulings and other guidance released by governmental agencies in the U.S. and Canada.
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DOL Issues Proposed Rule on Improving Transparency into PBM Fee Disclosure; Comments Due March 31
Jan 30, 2026, 06:00
by
Amanda Wilke
The U.S. Department of Labor (DOL) issued a proposed rule to require providers of pharmacy benefit management services and affiliated providers of brokerage and consulting services to disclose information about their compensation to fiduciaries of self-insured group health plans subject to the Employee Retirement Income Security Act (ERISA).
Pharmacy benefit managers (PBMs) act as an intermediary in the prescription drug supply chain for employer-sponsored self-insured group health plans that provide coverage. Health plan fiduciaries often cannot obtain full transparency into the payments that PBM service providers and their affiliates receive from drug manufacturers, pharmacies, and others.
The proposed rule implements section 12 of President Trump’s Executive Order 14273, Lowering Drug Prices by Once Again Putting Americans First, which instructs DOL to propose regulations to improve employer health plan transparency into the direct and indirect compensation received by PBMs. It affects plan sponsors and other fiduciaries of self-insured group health plans and certain service providers to such plans.
The proposed rule requires PBMs to make disclosures to plan fiduciaries that would allow them to assess the reasonableness of compensation for the services and to fulfill their duties under ERISA.
Issued under ERISA’s statutory service provider prohibited transaction exemption, the proposed rule requires PBMs to disclose the following information:
- Rebates and other payments from drug manufacturers,
- Compensation received when the price paid by the plan for a prescription drug exceeds the amount reimbursed to the pharmacy, and
- Payments recouped from pharmacies in connection with prescription drugs dispensed to the plan.
The proposed rule also:
- Allows plan fiduciaries to audit the accuracy of PBM disclosures and provides additional relief for plan fiduciaries if their PBM fails to meet its obligation, and
- Requires PBMs to explain what authority they retain to change a plan formulary and how often they expect to do so.
- Requires PBMs to explicitly state when they’re acting as a plan fiduciary and list any relevant conflicts of interest.