Pharmacy Benefit Manager (PBM) reform is no longer theoretical as the new landscape unfolds in real time. Over the past two decades prescription drug spending has been on a steady incline and employers offering health plans have been feeling the burn. With no visibility into what was driving the costs, employers and industry groups pushed for answers, calling on regulators to investigate.
The investigations identified spread pricing, pharmacy steering and rebate practices as key concerns. PBM transparency and reporting requirements were formalized in the Consolidated Appropriations Act of 2026, a $1.2 trillion federal spending package. PBMs will be required to disclose the difference between what plans pay the PBMs and what PBMs pay pharmacies.
Regulators are now moving beyond the outcomes and demanding proof of exactly how outcomes are achieved. The new federal mandates require structured, repeatable and transparent explanations across group health plans and PBMs. For self-insured employers specifically, a proposed DOL rule under ERISA clarifies: Plan fiduciaries will be expected to use these disclosures to evaluate whether PBM compensation levels are reasonable under the new transparency provisions.
This shift is changing the conversation from focusing on whether the data is available to whether the systems can prove how outcomes are produced.
Legacy systems were not built for this standard
Historically, PBM platforms were designed primarily for transaction processing. The transparency was often layered on through downstream reporting tools, spreadsheets or periodic audits. The system functioned with built-in gaps that didn’t allow for reconstructed pricing logic, traceable rebate flows and alignment across financial outputs. The legacy structure satisfied past requirements, however, does not meet the emerging standard.
The new mandates require recurring machine-readable reporting, claim-level financial visibility and reconciliation across pricing, rebates and payments. The crux of the issue in the legacy system is that the results produced cannot be reliably explained. Reporting based on the new mandates, requires gross and net drug costs, rebates, fees and discounts along with claim-level utilization and pricing data.
Why this matters: Continuous, verifiable accountability
Regulatory reform is moving the industry from trust to verification. As fiduciaries, employers and regulators expect traceability of rebate eligibility and pass-through, validation of pricing methodologies and defensible financial outcomes. Addressing the financial impact on patients and plans, PBMs must disclose total participant out-of-pocket spending and total net spending per drug.
The expectation of transparency has exceeded quarterly reports and must now exist within the workflow. This creates a new requirement that goes beyond reporting operations but proving operations as they happen. Reinforcing audit scrutiny and accountability pressure, additional reporting is required for drugs where gross spending exceeds $10,000 within a six-month period, including identification of the highest cost drugs.
What must change: Transparency must be embedded, not added
Moving away from retrospective reporting, manual reconciliation and disconnected systems, transparency must now be baked into the infrastructure to meet regulatory requirements.
This embedded transparency needs to span the claim lifecycle, connecting pricing logic, rebate governance and financial reconciliation so each can be traced and validated. Supporting claim-level traceability, PBMs need to track and report wholesale acquisition cost for brand name drugs and average wholesale price for generics.
The traceability should be continuous across operational workflows, allowing organizations to demonstrate within their systems exactly how claims are priced, how rebates flow and how financial outcomes are produced. The structure design must be inherently audit ready with visibility inside the transaction itself, not in an assembled report after the fact.
The next chapter: Infrastructure as the enabler of accountability
The PBM reform efforts are directional, not temporary. Meeting these expectations requires automated systems that can reconstruct claim logic on demand and provide real-time alignment between pricing, rebates and financial outputs. Signaling the long-term operational change, reporting requirements take effect 30 months after enactment. Organizations that rely on spreadsheets, fragmented systems and post-hoc reporting will struggle to meet the current standard.
Instead, organizations that embed transparency, traceability and compliance logic directly into workflows will be best positioned to seamlessly meet the regulatory expectations.
These reforms are meant to bring about structural accountability. The ability to deliver clear, consistent and verifiable data will be the competitive differentiator among PBMs, health plans and employers. Highlighting the financial impact, a state level analysis found rebate pass-through requirements reduced projected premium increases from 16.8% to 9.6%.
The next chapter of pharmacy benefit management will be written by organizations that treat transparency as infrastructure, not as an afterthought
Image: Thai Noipho, Getty Images
Lori Daughertyis an action-oriented and ambitious senior executive with more than 30 years of leadership experience in the Pharmacy Benefit Management (PBM) industry. As CEO of RxLogic, LLC, she brings a strategic, results-driven approach to scaling businesses, optimizing operations and building high-performing teams.
A respected and visionary leader, Lori is known for her analytical decision-making, operational rigor and commitment to empowering teams. Her leadership continues to shape the future of healthcare service delivery through innovation, integrity and impact.
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