Recent federal legislation has made its mark on reshaping the PBM industry, including one of the most significant structural changes the market has seen in years.
The passage of the Consolidated Appropriations Act of 2026 (CAA 2026) introduces long-anticipated reforms around transparency, expanded fiduciary responsibility, mandatory reporting and auditing rights. Another cornerstone of this legislation addresses a major PBM revenue stream through pass-through rebate pricing models. Although these models are associated with higher administrative fees for the plan sponsor, they allow for more predictable pricing.
Federal Scrutiny and FTC Settlements
The Federal Trade Commission (FTC) sued CVS Caremark, Express Scripts (ESI) and Optum Rx and their affiliated group purchasing organizations (GPOs) in September 2024, alleging their rebating practices artificially inflated drug list prices, with insulin as the lead example, raising costs for members whose copays and coinsurance are tied to list price.
- Express Scripts settled on February 4, 2026. The FTC estimates the settlement could reduce patient out-of-pocket costs by up to $7 billion over 10 years.
- CVS Caremark settled on July 14, 2026, on similar terms. The FTC estimates up to $8.5 billion in consumer savings over 10 years, plus up to $4.5 billion more through point-of-sale rebates.
- Optum Rx has not yet settled. Its case has been withdrawn from adjudication while the FTC considers a proposed consent agreement; terms are not yet public.
Both settlements are proposed consent orders subject to a 30-day public comment period before becoming final. No fines were imposed; the remedies are structural.
It is important to note that, for the most part, the settlement terms take the form of standard offerings that plan sponsors can elect and do not automatically rewrite existing contracts. Capturing the benefit will require active contracting decisions.
Implications for Plan Sponsors
Historically, a major PBM revenue stream included rebate retention and spread pricing, which limited plan sponsor transparency into how actual money was distributed.
As regulatory scrutiny of PBMs increases alongside growing demand for transparency and predictability, the pharmacy benefit market is already evolving. For example, in May 2026, Optum Rx announced its Transparency Pharmacy Care Model, which includes eliminating spread pricing and fully passing through eligible manufacturer rebate discounts to clients by 2028.
Preparing for the Next Pharmacy Benefit Model
While many provisions of the CAA 2026 will be implemented over the next several years, plan sponsors and their partners are already preparing for the changes ahead. As a result, reassessing contract language, reporting capabilities and compliance processes has become an increasingly important part of both ongoing plan management and new pharmacy benefit implementations.
As transparency requirements continue to expand, employers must be prepared not only to access pharmacy benefit data, but also to interpret it and act on it. In addition to the CAA 2026, proposed Department of Labor rules and increased FTC scrutiny are reshaping expectations for pharmacy benefit oversight. As a result, plan sponsors will be expected to more actively evaluate PBM performance and demonstrate prudent fiduciary oversight. The shift toward a more transparent, accountable pharmacy benefit model places employers in an increasingly important role in driving value and ensuring compliance.
As the industry adapts to new legislative reforms, transparency is no longer optional. Proactive preparation for these changes will be essential to maintaining compliance in an ever-evolving pharmacy marketplace.
