Pharmacy’s Role in Healthcare Reform & New Therapies

The landscape of prescription drug costs and access is undergoing a significant shift, driven by a confluence of federal actions and research highlighting the complexities of the pharmaceutical supply chain. Early 2026 has seen a surge in efforts to reform pharmacy benefit managers (PBMs), the often-opaque intermediaries between drug manufacturers, insurers, and patients. These changes, spurred by years of debate and fueled by research into misaligned incentives, promise increased transparency and potential cost savings, though the extent of those savings remains to be seen.

Navigating the PBM Landscape: What’s Changing

Three key developments are reshaping the PBM arena: the 2026 Consolidated Appropriations Act (CAA), a proposed rule from the U.S. Department of Labor (DOL), and a settlement with Express Scripts reached by the Federal Trade Commission (FTC). The CAA, enacted in early 2026, introduces novel requirements for commercial group health plans, effective for plan years beginning on or after January 1, 2029. Crucially, it prohibits the renewal of PBM contracts that don’t comply with these new stipulations, prompting employers to proactively review their existing agreements. The DOL’s proposed rule aims to increase visibility into PBM compensation for plan fiduciaries of self-insured group health plans subject to ERISA, though it’s still subject to change based on public comment. Finally, the FTC settlement with Express Scripts, effective January 1, 2027, mandates changes to the company’s PBM service offerings. The FTC continues to litigate similar issues against Caremark Rx and OptumRx.

PBMs, established in the 1960s, initially aimed to help insurers manage prescription drug spending. Although, consolidation within the market – as highlighted by the American Medical Association – has raised concerns about reduced competition and inflated drug prices. The AMA points to issues like incomplete rebate pass-through to consumers and lower reimbursement rates for pharmacies as consequences of this market structure.

The Research Foundation: Uncovering Hidden Costs

The recent wave of reform isn’t happening in a vacuum. It’s built on a decade of research, notably from the USC Schaeffer Institute, which has meticulously traced the flow of money within the pharmaceutical distribution system. Their 2017 white paper revealed that roughly 41 cents of every dollar spent on prescriptions goes to intermediaries, including PBMs. This finding shifted the focus of the drug pricing debate away from solely blaming manufacturers and towards the role of these intermediaries and the incentives within the system. Dana Goldman, founding director of the USC Schaeffer Institute, emphasized that this research identified “misaligned incentives and broken markets” that are now being addressed through reform and enforcement.

What Do PBMs Actually Do?

PBMs perform several key functions, including negotiating rebates and discounts with drug manufacturers, managing drug formularies (lists of covered drugs), assembling pharmacy networks, processing claims, and conducting utilization management – which can include prior authorization and step therapy. Although these functions can help control drug spending, the lack of transparency in how they operate has been a major point of contention. The concern is that PBMs may not be passing on the full extent of negotiated rebates to consumers or health plans, and that their financial incentives may not align with the goal of providing affordable access to medications.

The CAA: A Closer Look at New Requirements

The 2026 Consolidated Appropriations Act represents the most substantial action in PBM reform to date. While the full details are extensive (as outlined in this analysis from EBGLaw), key provisions include requirements for increased transparency in PBM pricing and a prohibition on spread pricing – a practice where PBMs charge health plans more for a drug than they reimburse the pharmacy. Employers are advised to commence early review of their PBM contracts to ensure compliance with these new rules, as non-compliant contracts cannot be renewed.

DOL’s Proposed Rule: Shining a Light on Compensation

The DOL’s proposed rule focuses on increasing transparency into PBM compensation for plan fiduciaries of self-insured group health plans. This is intended to help fiduciaries fulfill their responsibilities under ERISA (the Employee Retirement Income Security Act) by providing them with the information they need to assess whether PBM services are being provided at a reasonable cost. The rule is still in the public comment phase, meaning it could be subject to changes before it’s finalized.

FTC Action and Ongoing Litigation

The FTC’s settlement with Express Scripts requires significant changes to the company’s PBM service offerings, aiming to address concerns about anti-competitive practices and inflated drug prices. However, the FTC’s work isn’t done. They are currently engaged in litigation against Caremark Rx and OptumRx, suggesting a broader effort to address systemic issues within the PBM market.

What Does This Signify for Patients and Employers?

The ultimate goal of these reforms is to lower prescription drug costs and improve access to medications. For employers, increased transparency should allow them to negotiate better deals with PBMs and gain a clearer understanding of where their healthcare dollars are going. For patients, the hope is that these changes will translate into lower out-of-pocket costs and more affordable access to the medications they need. However, it’s crucial to note that the full impact of these reforms won’t be known for some time, and the savings may not be immediate or substantial.

Looking Ahead: Implementation and Monitoring

The coming years will be critical for implementing these reforms and monitoring their effectiveness. Employers should proactively review their PBM contracts and prepare for the changes mandated by the CAA. The DOL will likely finalize its proposed rule in the coming months, and the outcomes of the FTC’s litigation against Caremark Rx and OptumRx will further shape the PBM landscape. Continued research and data analysis will be essential to assess whether these reforms are achieving their intended goals and to identify any unintended consequences. Ongoing scrutiny and adaptation will be necessary to ensure that the prescription drug market operates fairly and efficiently, ultimately benefiting patients and employers alike.