The Department of Labor (DOL) wants to help employers hold down drug costs. Instead, its latest move is likely to raise them.
A proposed rule from the department would force pharmacy benefit managers (PBMs) to build a second, separate compliance system, on top of one Congress already passed months earlier. PBMs negotiate with pharmaceutical companies to keep drug prices down. Unnecessarily increasing their cost of doing business like this will only pump drug prices up further.
The proposed rule will hurt the PBM industry. The businesses stuck paying for that are not the industry giants people picture when they hear “pharmacy benefit manager.” Small PBMs and the small businesses they serve will bear the cost – and that cost doesn’t stay contained to a spreadsheet. It shows up in what employers can afford to offer and in what workers pay at the pharmacy counter.
Congress spent years arguing over how to fix pharmacy benefit managers. In February, it finally acted. The Consolidated Appropriations Act of 2026 forces PBMs to disclose their fees, pass through 100% of manufacturer rebates, and open their books to the employers who hire them.
Days before that law passed, the Department of Labor proposed a rule of its own doing much of the same thing. The proposal would require PBMs and their affiliated brokers to disclose compensation to employers who sponsor self-insured health plans, under ERISA fiduciary law. While this sounds like a companion to the CAA, it’s a second, separate reporting system, built on different legal authority, with a different format and a faster deadline than the law Congress had just finished writing.
Building one standardized reporting system, as PBMs have to do to comply with the CAA, is hard enough. Building two, on different timelines, in different formats, is not simply twice the work. It’s a compliance maze. Small PBMs don’t have the same resources to navigate it that the largest players do.
About 70 full-service PBMs operate in the U.S. Most aren’t household names. One mid-market PBM, ProAct, said complying with the rule as written could cost the company upward of $1 million, a bill that would eat into margins for a business nowhere near the scale of the industry’s largest players. Other mid-market PBMs said the compliance timeline is too aggressive to build accurate reporting systems from scratch.
The burden doesn’t stop with PBMs. RxBenefits, a mid-market PBM, said its small business clients will need to hire outside consultants just to interpret the new disclosures and manage their own fiduciary risk. That’s money small employers will spend on consultants instead of on their employees’ coverage.
The rule doesn’t only burden PBMs. It also gives self-insured employers, including small businesses using level-funded plans, new audit rights they’re expected to use. If a PBM fails to disclose properly, the employer’s own arrangement with that PBM can be deemed a “prohibited transaction” under ERISA, exposing the employer, not just the PBM, to legal risk. Small business owners already stretched thin on compliance now have another fiduciary duty to track.
A rule only the largest, best-resourced PBMs can comply with easily doesn’t just burden smaller competitors. It risks pushing them out of the market, or discouraging new PBMs from entering at all. Fewer PBMs means less competitive pressure in an industry whose entire value proposition is using aggregated bargaining power to negotiate discounts from drug manufacturers. PBM competition already lowers prescription drug spending by an estimated 40% to 50% compared with an unmanaged market. Weaken that competition, and the savings weaken with it.
The Department of Labor’s own timeline has already slipped. The rule set plan years beginning on or after July 1, 2026, as its compliance target. That date has passed with no final rule issued, a sign the rule was rushed out without the coordination it needed with the CAA in the first place.
TRUMP WANTS ANOTHER TARIFF. CONGRESS ALREADY GAVE HIM A STRONGER WEAPON
None of this means PBMs should be shielded from scrutiny. The CAA already answers that call, with rebate pass-through requirements, detailed reporting mandates, and real penalties for noncompliance. The question isn’t whether PBMs should be more transparent. It’s whether a second, uncoordinated rule from a different agency adds anything Congress didn’t already require, or simply adds cost without adding clarity.
For the 136 million Americans covered through employer health plans, that paperwork problem in Washington can turn into a higher bill at the pharmacy counter. Every dollar a small PBM spends building a duplicate reporting system, and every dollar a small employer spends on a consultant to interpret it, is a dollar not going toward lower premiums or better drug coverage. If the Trump administration wants to help employers and the workers who depend on them, the fix isn’t a second rulebook. It’s aligning with the one Congress already wrote.
Iulia Lupse is the founder of I&A Communications Solutions and a contributor with Young Voices.