Pharmacy benefit manager (PBM) reform is accelerating inside Congress and could happen here in Florida.
Some health analyst are saying that employers expecting new rebate and transparency rules to automatically deliver lower prescription costs may need to take a wider view.
Paul Pruitt, Chief Growth Officer and Co-Founder of SHARx, a procurement management solution for high-cost prescription drugs, cautions that pressure on traditional PBM revenue streams may shift where revenue is captured without lowering employer drug costs.
“Changing one PBM revenue stream does not automatically translate into lower costs for employers,” Pruitt said. “The financial model can adjust, so plan sponsors need transparency across the entire arrangement to understand whether reform is producing real savings.”
Federal scrutiny supports the need for a broader view. The Federal Trade Commission (FTC) has documented extensive vertical integration among the largest PBMs and their affiliated insurers and pharmacies. A subsequent FTC staff report found that the three largest PBMs’ affiliated pharmacies generated more than $7.3 billion in dispensing revenue above estimated acquisition costs on the specialty generic drugs studied from 2017 through 2022.
The U.S. Department of Labor’s 2026 PBM disclosure proposal similarly seeks to give employers and plan fiduciaries greater visibility into compensation received by PBMs and their affiliates. For employers, that matters because they cannot determine whether an arrangement is delivering promised savings without seeing its full economics.
PBM reform has traditionally focused on rebates, spread pricing, and contract disclosures, but those measures may reveal only part of the economics influencing an employer’s plan.
Revenue may also flow through specialty pharmacies, group purchasing organizations (GPOs), rebate aggregators, mail order pharmacies and other affiliated entities. For employers, the key question is not simply where PBM revenue shifts, but whether the total cost of providing the pharmacy benefit actually declines.
The FTC reported that pharmacies affiliated with the three largest PBMs received 68% of specialty-drug dispensing revenue in 2023, up from 54% in 2016, and found that major PBMs generally reimbursed affiliated pharmacies at higher rates than unaffiliated pharmacies for the specialty generic drugs examined.
“When your PBM controls the dispensing and that’s where most of the revenue comes from, that’s a problem,” Pruitt said.
In July 2026, the FTC announced a settlement with CVS Health’s Caremark Rx and affiliated rebate aggregator Zinc Health Services that included measures intended to increase transparency and alter certain PBM compensation practices.
Pruitt cautions that regulatory action should be treated as the beginning of the analysis, not proof that total pharmacy economics have been fixed.
A PBM contract can disclose administrative charges, rebate guarantees, and discount terms while offering limited insight into revenue generated elsewhere within a vertically integrated organization.
The Department of Labor’s proposed rule would require PBMs to disclose certain payments received from drug manufacturers, pharmacies, and other sources and allow plan fiduciaries to audit those disclosures.
For Pruitt, the most meaningful test of rebate reform is what happens to an employer’s total net pharmacy spend and employees’ ability to obtain their medications. That means looking beyond rebates to specialty-drug costs, fees, manufacturer payments, access barriers, and member disruption.
