New Transparency Rules Force PBMs to Disclose Drug Pricing Gaps and Rebates to Employers

The Prescription Drug Transparency and Affordability Act isn't about setting drug prices, it’s about pulling back the curtain on how those prices are actually set and paid for. Specifically, Section 2 targets Pharmacy Benefit Managers (PBMs)—the middlemen who manage prescription drug benefits for your employer’s health plan—and forces them to share their homework with the people who hire them.

The Curtain Call: What PBMs Have to Report

For anyone with a job that offers health insurance, this is a big deal. PBMs have historically operated in a black box, making it nearly impossible for employers (the group health plans) to know if they’re getting a good deal. Starting 30 months after this bill becomes law, PBMs will have to send detailed reports to the health plans every six months. This isn’t a vague summary; for large employers (those with 100 or more employees), the reports must break down costs drug-by-drug.

Imagine your company’s HR manager getting a spreadsheet that shows, for every single claim, the price the plan paid the PBM, the price the PBM paid the actual pharmacy, and the difference between those two numbers. This is the “pricing gap” data required under the bill. They also have to disclose the total rebates and discounts received by the PBM for that drug, essentially revealing the final net cost. This level of detail, outlined in the reporting requirements, is designed to give employers the kind of data they need to negotiate harder and spot where money is disappearing in the supply chain.

Checking the Family Discount: Affiliated Pharmacies

One of the biggest concerns in the industry is the rise of vertical integration—PBMs that also own their own pharmacies (often mail-order or specialty). This bill requires PBMs to disclose exactly how much they charge when a prescription is filled at one of their affiliated pharmacies. Crucially, they must compare that price against the median and lowest costs charged by non-affiliated pharmacies in the network for the exact same drug. If your PBM is forcing you to use their mail-order service, this provision makes sure your employer can see whether that mandated service is actually saving them money or just funneling profits back to the PBM’s parent company.

The Real-World Impact: Lower Costs (Maybe)

The goal here is straightforward: transparency drives competition and accountability. If your employer, who pays the bills, can see exactly how much profit the PBM is making on every transaction and every rebate, they can shop around for a better deal or demand that the savings be passed back to the plan. For the average employee, this could mean lower premiums, reduced deductibles, or better coverage if the plan saves money on drug costs.

However, PBMs face a huge new administrative burden and significant penalties—up to $10,000 per day—for failing to provide accurate reports. While the Secretary of HHS can waive these if a PBM shows a “good-faith effort to comply,” the threat of six-figure fines for knowingly submitting false information is a serious incentive to get the data right. This bill is essentially forcing the PBMs to open their books, and for the first time, employers will have the necessary data to evaluate whether their PBM is a partner or just another layer of cost.