The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) has unveiled a proposed regulation aimed at providing transparency into the often opaque world of pharmacy benefit managers (PBMs). Announced on January 29, 2026, the proposal marks one of the most significant federal efforts in decades to reform the prescription drug supply chain and strengthen protections for American workers, retirees, and their families. While the proposal is not yet final, regulatory guidance of this nature often informs fiduciary expectations well in advance of formal enforcement.
PBMs are large intermediaries connecting drug manufacturers, pharmacies, and health and welfare plans and play a central role in determining the cost of prescription medications for a large volume of Americans covered under employer‑sponsored, self‑insured group health plans. Plan fiduciaries often struggle to access clear, comprehensive information about the fees, rebates, and financial arrangements PBMs receive. EBSA’s proposed rule addresses this gap directly.
Under the proposal, PBMs would be required to disclose detailed compensation information to plan fiduciaries, ensuring employers can accurately assess the reasonableness of PBM fees and meet their obligations under the Employee Retirement Income Security Act (ERISA). The Department emphasized that hidden incentives and opaque pricing structures have distorted the marketplace, contributing to higher drug costs for consumers and employers alike.
Federal officials underscored the significance of this regulatory shift. The proposal builds on recent national efforts to lower healthcare costs and reinforce transparency across the supply chain. By holding PBMs accountable and requiring them to operate in full view of the plans they serve, the rule is designed to empower employers to negotiate more favorable terms and ultimately reduce prescription drug spending.
If finalized, the regulation represents a decisive step towards a more transparent pharmacy benefits system—one that aligns business practices with the interests of workers and their families. EBSA has invited public comments and plans to engage stakeholders as the proposal moves through the federal rulemaking process.
As plan sponsors evaluate the proposal, practical considerations may include:
- Evaluate existing PBM agreements for hidden or indirect compensation
- Assess fiduciary exposure under ERISA
- Strengthen documentation and decision‑making processes over vendors, including the PBM
- Prepare for enhanced data requests from PBMs
- Evaluate plan governance, internal controls and administrative readiness
- Benchmark PBM pricing and services against the market
- Coordinate with legal, compliance and vendor‑management teams
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For more information on this topic, please contact a member of Withum’s Multiemployer Benefit Plans Services Team.
