EL7.AI
GeneralMedium•30 October 2026•
4 min read

U.S. Rule Requires Drug Benefit Brokers to Disclose Compensation to Plans With 100 or More Participants

Key Facts

1The rule’s requirements apply to plan years beginning on or after July 1, 2027, and the rule takes effect 60 days after publication.
2Large, self-funded plans are generally defined as having 100 or more participants, or being offered by an employer with 100 or more employees.
3The rule covers service providers that reasonably expect to receive compensation of $1,000 or more.
4Periodic disclosures must be submitted within 30 calendar days after the end of the semiannual period, or quarterly period if requested.

The U.S. Department of Labor issued a final rule under the Employee Retirement Income Security Act requiring pharmacy benefit management service providers and their affiliates to disclose compensation to fiduciaries of large, self-funded group health plans. Labor Secretary Keith Sonderling said the disclosures would allow employers to negotiate better deals and lower drug prices for more than 72 million Americans covered by these plans. The rule aims to address a lack of clarity about what pharmacy benefit managers charge for their services and which entities pay them. Sonderling said the administration wants full price transparency to become part of competition in the health care sector. The rule does not directly mandate lower prices; it establishes disclosure and audit requirements within a defined legal framework.

The detailed rule applies only to pharmacy benefit management service providers and their affiliated brokers and consultants when they work with large, self-funded group health plans, and does not cover all health plans. The department generally defines these plans as plans with 100 or more participants, or plans offered by employers with 100 or more employees. The rule also covers service providers that reasonably expect to receive compensation of $1,000 or more, directly or through affiliates, agents or subcontractors. This definition identifies the entities required to disclose and ties the obligation to expected compensation and the type of plan with which they contract. The department says self-funded plans served by pharmacy benefit managers provide coverage to about 90 million Americans, according to its statement when it proposed the rule in January 2026.

The information that must be disclosed includes payments pharmacy benefit managers receive from drug manufacturers and spread compensation between what the plan pays and what the pharmacy benefit manager pays the pharmacy. Disclosures also cover amounts the company recoups from pharmacies and price-protection arrangements. These provisions allow plan fiduciaries to see the different compensation channels tied to prescription management, including payments that may not appear in direct service fees. Initial disclosure is required before a contract is entered into, extended or renewed. For a contract renewal or extension, the department considers disclosure at least 90 days in advance to be a reasonable timeline.

After contracting begins, service providers must submit periodic disclosures of actual compensation after each semiannual period, or quarterly if the plan requests it. The information must be provided within 30 calendar days after the end of the relevant period. If actual compensation exceeds the amount in the initial disclosure by 5% or more, the service provider must explain the excess and specify its value. The rule gives plans the right to audit a service provider’s disclosures at least once a year. The service provider must acknowledge an audit request within 10 business days and generally provide the necessary information within 60 calendar days.

The rule follows an executive order signed by President Donald Trump on April 15, 2025, directing the Department of Labor to improve transparency around direct and indirect compensation received by pharmacy benefit managers. The department proposed the rule in January 2026, then extended the public comment period after legislative amendments to the Employee Retirement Income Security Act so it could consider aligning the rule with the new legal requirements. The department set April 15, 2026, as the deadline for comments. The law’s amendments to disclosure obligations took effect on February 3, 2026, and the department said it would follow a temporary enforcement policy while entities develop compliance mechanisms. These steps reflect a regulatory process that began with a presidential directive, followed by a proposal subject to comment and review before the final rule was issued.

The rule also comes amid parallel Federal Trade Commission action against major pharmacy benefit managers. In July 2026, the commission announced a proposed settlement with Caremark in an antitrust case and said its terms include a standard offer to plan sponsors that ensures rebates are passed through to members at the point of sale. According to a Washington Post report, Cigna’s Express Scripts, CVS’s Caremark and UnitedHealth Group’s Optum Rx together control about 80% of prescription drug claims in the United States, based on a 2026 report by Groundwork Collaborative. This concentration places the new disclosure requirements within a broader debate over intermediaries’ role in the flow of payments and rebates in the drug market. The rule’s requirements apply to plan years beginning on or after July 1, 2027, and the rule takes effect 60 days after publication in the Federal Register.