WASHINGTON, DC — New U.S. rules on pharmacy benefit managers are set to change how prescription drug discounts move through the system. Under the Consolidated Appropriations Act of 2026, PBMs must pass 100% of rebates and discounts to health plan sponsors or insurers and provide detailed reports on drug pricing and compensation.
That is a major break from the older model, in which intermediaries kept part of the savings and negotiated pricing terms that were largely hidden from view. The shift is expected to affect manufacturers, payers, and pharmacies at the same time, even if the consequences will vary across each part of the market.
Why the old rebate model is coming under pressure
For years, manufacturers have offered rebates and discounts on list prices to PBMs in exchange for preferred formulary placement. PBMs typically kept a share of those savings while passing the rest to health plans and, in theory, patients.
Critics of that system have said it encouraged higher rebates on brand-name drugs and made it difficult to see the final price paid or how the savings were divided. The new transparency requirements are aimed at that opacity, and PBMs are now expected to adapt their business models rather than rely on hidden spread between what they collect and what they pass along.
According to the Health Industries Research Center, PBM executives already view pricing transparency and government regulation as two of the most disruptive market trends in 2026.
PBMs move toward administrative fees and new revenue streams
Because they must pass savings through more directly, PBMs are looking for other ways to keep revenue intact. One common response has been to add administrative fees on top of rebate structures, while also tightening formulary and utilization controls.
Those fees are supposed to reflect the fair market value of the services PBMs provide. Jerry Smith of D2 Solutions said his company has seen charges range from $10 to $115, depending on the medication. The added costs can change the economics of a contract, especially when fees are applied every time a prescription is filled.
Some manufacturers are now asking how to negotiate under those terms, including how to define fair market value and what services justify a higher payment.
Manufacturers weigh higher list prices, lower rebates, and direct support programs
For drug makers, the new fee structure can squeeze margins and increase gross-to-net complexity. Model N found that 61% of surveyed life sciences leaders said PBMs are the biggest contributor to that problem.
Manufacturers could raise list prices to offset the added expense, but that can create new problems of its own. Higher prices may affect government pricing calculations, increase patient coinsurance, trigger inflation penalties, and hurt a company’s public image.
Another option is to offer smaller rebates and accept less favorable formulary placement. Companies could then put more emphasis on copay cards, discount programs, and direct-to-consumer support. A D2 survey found 46% of respondents were unaware of manufacturer support programs, while only 15% were using them.
Health plans may gain leverage but still face higher short-term costs
Payers will receive the full value of rebates and discounts under the new law, but that does not guarantee a lower total bill. In some cases, the new administrative fees could outweigh the extra savings, leaving plans and employers with net losses.
There is also a timing issue. Rebates are often based on volume and arrive months after the original payment, which means plans may need to front more cash before they are reimbursed. If the expected volume does not materialize, they may never recover all of that capital.
That may leave employers and health plans choosing between higher patient costs and tighter coverage. At the same time, the new rules could give them more leverage in negotiations, since PBMs will have to prove their value with hard numbers rather than broad claims.
Independent pharmacies still face pressure despite clearer reimbursement
Pharmacies are likely to see a mixed result. More transparent pricing should make reimbursement more predictable, and the law is intended to limit spread pricing and retroactive fees. Moving payment closer to the point of sale can help pharmacies understand their margin earlier in the transaction.
Still, PBMs remain powerful when they negotiate network contracts, especially with independent pharmacies. The Drug Channels Institute said three companies processed 80% of all equivalent prescription claims in 2025, and many major PBMs also own mail-order, retail, or specialty pharmacies.
Independent stores can be squeezed further when maximum allowable cost limits fall below wholesale acquisition costs. Congress is considering PBM ownership restrictions for retail stores, but no law has been enacted, so smaller pharmacies may continue to operate under financial strain.
Transparency may improve the system, but the outcome depends on contract changes
Industry observers say transparency alone will not fix U.S. drug pricing. The new law may make the system easier to see, but the real test will be whether manufacturers, payers, and PBMs change their contracts in ways that align incentives more fairly.
For now, the most immediate effect is a forced reset. PBMs must show where the money goes, manufacturers must decide how to respond to new fees and rebate pressure, and health plans must determine whether their current vendors still offer enough value. The final impact will depend on how quickly each side adjusts.
