On February 3, 2026, President Trump signed the Consolidated Appropriations Act (CAA) of 2026 into law. While the CAA covers a wide range of federal priorities, it includes the advancement of long awaited PBM reform. After years of individual state laws and bipartisan interest in addressing opaque PBM contracting practices, vertical integration, and misaligned incentives, the new law represents a significant shift in how PBMs will be monitored and regulated.
The new PBM reform laws passed will be implemented between 2028 and 2029. The laws will expand the authority of the Centers for Medicare and Medicaid Services (CMS) to oversee PBM contracting and compensation practices and will also introduce new transparency and reporting requirements that will affect both Commercial plans and Medicare Part D, with Medicaid direction expected to follow.
In this blog, we’ll cover the key reforms for Commercial plans, Medicare Part D, and the key industry response and implications for plans.
Key PBM reforms for Commercial plans
Commercial plan sponsors and fully insured large plans will see significant changes in PBM reporting, auditability, and data access beginning with plan years that start thirty months after February 3, 2026.
- PBMs must pass-through 100% of rebates, discounts, and price concessions to plan sponsors. This does not apply to non-ERISA group coverage or group health insurance issuers.
- PBMs must provide semiannual reporting, with quarterly reporting available upon request, detailing gross and net drug spending, rebate levels, spread pricing, formulary rationale, and pharmacy steering patterns, as well as a member facing summaries with aggregate information about plan level pharmacy spending and rebate activity. Employers may conduct an annual audit of PBM rebate contracts, and PBMs must provide access to the claims and financial data necessary for that review.
- These provisions aim to give commercial plan sponsors a clearer view into PBM financial flows and decision making.
Key PBM reforms for Medicare Part D
Medicare Part D requirements include similar reporting and rebate requirements in addition to structural changes to PBM compensation and pharmacy access that begin with the 2028 plan year, with certain network provisions added in 2029.
- PBMs must pass-through 100% of rebates, discounts, and price concessions to Part D sponsors.
- PBM compensation must be separated from drug prices. PBMs may only receive flat, fair market value fees for defined administrative services.
- Part D sponsors gain expanded audit authority over PBM remuneration and contract compliance.
- PBMs must provide annual drug level and aggregate reporting, including gross and net drug spending, manufacturer payments, pharmacy reimbursement patterns, and formulary rationale.
Beginning in the 2029 plan year, a second phase takes effect around pharmacy networks.
- Any willing pharmacy that meets “reasonable and relevant” standards must be allowed to participate in PBM networks, and essential pharmacies in limited access areas will receive added protections.
- Pharmacies will gain a formal process to report PBM contract violations, with anti-retaliation safeguards.
Medicaid reforms are expected to align with Medicare’s emphasis on transparency and access, though specific provisions are still emerging.
Key differences between commercial and Medicare rules
Both commercial plans and Medicare Part D gain stronger reporting and audit rights, but Medicare requirements are more rigid. In Medicare Part D, PBM compensation must be paid as flat fees that reflect fair market value, removing revenue tied to drug prices. Medicare also introduces any willing pharmacy standards and protections for essential pharmacies, which do not apply to commercial plans. Commercial reforms focus mainly on transparency, and PBMs may adjust administrative fees or restructure contracts as revenue models evolve. Both markets gain more visibility, but Medicare applies stricter enforcement and compensation guardrails.
What this could mean for employer plans
These reforms are not expected to immediately reduce drug prices for employers or members. However, as implementation approaches, PBMs may begin adjusting contracting and revenue models in anticipation of the new requirements.
Expect increased program visibility and audit options
Under the new laws, employer plans will gain access to a more standardized set of PBM financial and operational data, including gross versus net drug spend, rebate flows, and formulary rationale. Although the law specifies what must be reported, it does not ensure clarity or consistency in how PBMs present that information. With defined audit rights and full data access, employers can better validate PBM performance, though independent oversight will still be needed to interpret disclosures and confirm reported amounts.
Anticipate evolving PBM revenue models
PBM pass-through requirements will increase, which can help ensure dollars intended to reduce the plan and member costs reach the plan, instead of being retained by the PBM. At the same time, PBMs may seek to rebalance revenue through administrative fees or new service constructs. Employers should evaluate total net cost of the pharmacy benefit rather than focusing narrowly on any single pricing component, and ensure they understand how revised fee structures operate in practice.
Monitor the role of vertical integration
The reforms increase transparency but do not change the broader structure of vertically integrated insurer, PBM, group purchasing organizations (GPOs), and pharmacy models. Continued attention to network design, pricing dynamics, and formulary strategy will be important.
The new PBM reform framework gives employers and benefits consultants greater visibility into the financial and operational mechanics of their pharmacy benefits. As reporting expands and audit rights strengthen, plan sponsors will have clearer opportunities to review how fees, rebates, definitions, and contract terms influence overall plan performance. Truveris encourages plan sponsors to review data access rights, fee structures, rebate definitions, audit provisions, and transparency reporting to ensure their contract terms remain aligned with plan goals.
Truveris is a pharmacy cost containment company dedicated to reducing pharmacy costs and driving transparency for employers and benefit consultants. Our proprietary, data-driven technology and deep industry expertise empower smarter pharmacy benefit decisions through contract optimization and PBM oversight. Independent and unbiased, Truveris delivers measurable savings and accountability across every pharmacy program.
