What a PBM Crackdown Could Mean for What You Pay at the Pharmacy

If you have ever reached the pharmacy counter expecting a routine pickup, only to be hit with an inexplicable $80 copay for a generic drug that once cost $10, you have already felt the influence of a pharmacy benefit manager, or PBM.

As patients deal with rising out-of-pocket costs and independent drugstores disappear across the country, a small group of powerful corporate intermediaries now controls the bulk of U.S. prescriptions. Federal regulators are beginning to demand more transparency from them.

According to Healthcare Dive, a new Department of Labor transparency rule will require PBMs to reveal the hidden markups and manufacturer rebates they collect at the expense of workers and employers. The big question is whether more visibility will actually make medication more affordable.

What does a Pharmacy Benefit Manager do?

A PBM handles the prescription side of a health plan. Vaishnavi Gudupalli, PharmD, a pharmacist and director of quality, performance improvement and risk at Safe Harbor Recovery Center, said a PBM “sits between your health plan or employer, the pharmacy and the drugmaker,” she told Blavity Health.

PBMs generally perform three key functions:

• Formulary management: They choose which drugs are covered and what tier they fall into.
• Drugmaker negotiations: They negotiate prices and rebates, which are payments from manufacturers in exchange for favorable coverage.
• Claim processing: They determine what the pharmacy gets paid and help set the amount you owe at the counter.

Because of that, a PBM can influence what patients pay through copays, deductibles and even whether a medication is covered at all, Gudupalli said.

The market is also highly concentrated. Express Scripts, CVS Caremark and Optum Rx — the so-called Big Three PBMs — process roughly 80% of prescriptions in the United States, according to Healthcare Dive.

What the PBM transparency rules require

The final transparency rule requires PBMs to disclose their compensation to self-insured employers that hire them. That includes rebates from drugmakers, pharmacy payments and money kept through spread pricing, Healthcare Dive reported.

PBMs must provide the information when they negotiate or renew a contract and then every six months. Employers may also audit the disclosures once a year. PBMs that fail to comply could face penalties and risk having their contracts invalidated.

The rule is set to take effect in July 2027. The Labor Department estimates it could save employers and workers $22 billion in drug costs over 10 years.

The industry does not all agree with the move. PBM trade group Pharmaceutical Care Management Association CEO David Marin described it as “a solution in search of a problem,” while the National Community Pharmacists Association said it “creates additional transparency for the first time.”

How the rule could affect prescription prices

The regulation is aimed at spread pricing. In that arrangement, “a PBM may reimburse the pharmacy one amount and charge the plan a higher amount, keeping the difference,” Gudupalli said. “Disclosure makes that spread visible, which is the first step to curbing it.”

Those gaps can be dramatic. Assistant Secretary of Labor Daniel Aronowitz cited one case in which a medication cost $5.25 at the pharmacy but was billed to the health plan at $84, or 16 times the cost, according to the NCPA.

Since employers ultimately pay those claims, hidden markups can also raise the premiums workers face. With better information, employers can compare PBMs and press for stronger contracts. Gudupalli noted that some PBMs already operate on a pass-through model, sending negotiated prices and rebates directly to the plan while charging a disclosed fee.

Will patients see lower out-of-pocket costs?

“Not automatically, and not immediately,” Gudupalli said. “Copays and deductibles are set by plan design, and savings from transparency flow through only when the employer’s next contract or plan year reflects them.”

In other words, the new rule gives information to employers, not directly to patients. “Transparency is a tool for the purchaser, not a direct price cut at the counter,” she said.

The rule also applies only to self-insured employer plans, meaning companies that pay claims themselves. If you have a fully insured plan or buy coverage on your own, it may not apply. Workers should check with HR to find out what type of coverage they have.

Gudupalli recommends asking employers whether the PBM contract uses a pass-through or traditional model and whether the next contract will require full disclosure of rebates, fees and spread pricing.

Why independent pharmacies are pushing back

Local pharmacies have been under pressure for years. Independent pharmacists say PBMs often reimburse them below the cost of the medication and later recover additional fees after the prescription has already been filled.

That pressure has contributed to widespread closures. A USC-led study in Health Affairs found that about one in three U.S. retail pharmacies closed between 2010 and 2021. Independent pharmacies were more than twice as likely to shut down as chain stores.

Black neighborhoods were affected most severely. Researchers found that 37.5% of pharmacies in predominantly Black neighborhoods closed, compared with 27.7% in predominantly white neighborhoods. When a nearby pharmacy disappears, patients may have to travel farther for medications or go without them.

That is why independent pharmacists have been calling for PBM reform. The new rule requires PBMs to disclose the money they recover from pharmacies, which could make clawbacks more visible. Several states have already adopted their own restrictions, and Arkansas has banned PBMs from owning retail pharmacies in the state.

Ways to find a lower prescription price

You do not need to wait for 2027 to start saving. Nicholas Jones, MD, FACS, a double board-certified plastic surgeon in Atlanta who prescribes GLP-1 medications, advises patients to ask two questions before the pharmacy runs the claim: “What is the cash price?” and “What is my price with insurance?”

Cash can be cheaper, especially for patients with a high deductible early in the plan year, Jones told Blavity Health. Still, paying cash may not count toward a deductible, so it is worth asking before deciding.

It also helps to compare pharmacies. “Two pharmacies four miles apart can quote very different cash prices on the same prescription, and nobody volunteers that,” Jones said.

How to save at the pharmacy counter

• Ask for both the cash price and the insurance price before the claim is processed.
• Ask whether a generic or lower-cost alternative is available.
• Request a 90-day supply for medications you take regularly.
• Check the drugmaker’s website for savings cards or patient assistance programs.
• Compare prices at two or three pharmacies, including independent ones.

Talk with your pharmacist as well. They can help identify cheaper options and catch drug interactions. And be cautious with low-cost copycat drugs. When brand-name medicines such as Ozempic are out of reach, some patients turn to compounded versions. However, Jones said those products are not FDA-approved for safety and effectiveness, and their sourcing can vary.

The takeaway

The new PBM transparency rule will require drug middlemen to disclose how they are paid to employers, beginning in July 2027. It may eventually reduce costs, but workers will only benefit if employers use the information to negotiate better deals. For now, compare cash and insurance prices, ask about generics and speak with your pharmacist.

Frequently asked questions

Are prescription drug prices going up?

Yes. Drugmakers increased list prices on at least 350 brand-name medications in January, with a median increase of about 4%, according to Becker’s Hospital Review.

What is the most commonly prescribed drug?

Atorvastatin, sold as Lipitor, is the most frequently prescribed medication in the U.S. and has held that position since 2018, according to ClinCalc DrugStats.

Citations

ClinCalc. ClinCalc DrugStats: Most commonly prescribed medications in 2023. Published August 2025. https://clincalc.com/blog/2025/08/clincalc-drugstats-most-commonly-prescribed-medications-in-2023/

Guadamuz JS, Qato DM, Kanter GP, Alexander GC. Nearly 1 in 3 retail pharmacies have closed since 2010. USC Schaeffer Center. Published December 3, 2024. https://healthpolicy.usc.edu/article/pharmacy-closures-united-states-healthcare-disparities

Jeffries E. Drugmakers to hike prices of 350 drugs in January. Becker’s Hospital Review. Published January 2, 2026. https://www.beckershospitalreview.com/pharmacy/drugmakers-to-hike-prices-of-350-drugs-in-january/

National Community Pharmacists Association. NCPA applauds Department of Labor final rule on PBM transparency requirements. Published October 29, 2026. https://ncpa.org/newsroom/news-releases/2026/10/29/ncpa-applauds-department-labor-final-rule-pbm-transparency

Pifer Parduhn R. Labor Department finalizes sweeping PBM disclosure rule. Healthcare Dive. Published October 29, 2026. https://www.healthcaredive.com/news/pbm-transparency-final-rule-labor-department-employer/873089/

U.S. Department of Labor. US Department of Labor finalizes pharmacy benefit manager transparency rule. Published October 29, 2026. https://www.dol.gov/newsroom/releases/ebsa/ebsa20261029

Zampa P. Pharmacies across the United States are closing at an accelerating rate. InvestigateTV. Published April 15, 2026. https://www.wafb.com/2026/04/15/pharmacies-across-united-states-are-closing-an-accelerating-rate/