Upstart PBMs shrug off impact of reform law on their companies

The transparency and reporting requirements that are part of the reform bill that President Donald Trump signed into law on Feb. 3, 2026, don’t worry the leaders of the smaller pharmacy benefit managers. In fact, they welcome the transparency as a way to force alignment among the various stakeholders in the drug supply chain.

In addition to requiring pass-through rebates and delinking PBM compensation from the list price of drugs, it requires PBMs to report to health plans information about drug pricing, rebates, pharmacy reimbursement and benefit design structure. The PBM law was part of the Consolidated Appropriations Act 2026 and is the first new federal legislation in 20 years to address pharmacy benefits.

It acknowledges that the pharmacy benefit ecosystem no longer only includes PBMs. Also subject to the transparency rule in the new law are brokers, rebate aggregators, affiliated group purchasing organizations and third-party entities that sit between manufacturers and plans.

“For the first time, Congress is making clear that transparency must apply to that supply chain in commercial and ERISA-governed markets,” Joe Shields, CEO of Transparency-Rx, said in a recent press conference. “These reforms strengthen contract transparency, water rights, and reporting requirements, giving plan fiduciaries visibility into rebate arrangements, including those involving aggregators and affiliate entities.”

The transparency aspect of this law will force the alignment between the various stakeholders, said David Blair, founder, chairman and CEO of LucyRx.

The argument for transparency is that more data allows for better decision-making, helps identify outcomes and areas for cost-saving, and ensures that the goals of the organizations are aligned.

Transparency requirements

The disclosure required in the law is extensive in both the Medicare and commercial business. The legislation requires that beginning July 1, 2028, and continuing annually, PBMs provide information to plans about the drugs and price concessions it receives.

Additionally, PBMs must provide a list of all drugs covered by the plan; a written justification when a brand has more favorable coverage than a generic; the number of claims dispensed by channel; total patient out-of-pocket spending; average patient cost sharing; the average pharmacy reimbursement; and revenue received from pharmaceutical manufacturers.

Blair said in a recent interview that the reporting requirements are not a heavy lift for LucyRx. “It’s additional reporting, but we capture all of that data already. It just creates an additional report,” he said.

During the Transparency-Rx press briefing, executives from some of the smaller PBMs said they'd been transparent, pass-through organizations before transparency became a buzzword.

“We were born out of a not-for-profit health plan with the question of, how do we keep drugs affordable? Even back then, we learned you can’t manage what you can’t see,” Lynne Reilly, president of Pharmacy Benefit Dimensions, said during the press conference. “With these reforms, Congress is trying to push the same standard across the system in commercial and ERISA plans: a strong audit of price brings real accountability, especially around broker and consulting compensation.”

Jeff Malone, president and CEO of RxPreferred, said its model was built based on full rebate pass-through, contractual audit rights and transparent reporting, “because we believe transparency should be structural and not optional.

“Transparency must be real, accountability must be enforceable, and savings must be provable. The markets have had flexibility now; now they have standards,” he said during the press conference. “The shift is essential to restoring trust, protecting plan sponsors and ensuring fiduciary responsibilities are clearly defined and consistently met.”

Pramod John, Ph.D., CEO of Vivio Health, also said that Vivio Health already operates in a way that is compliant with the PBM reform law. “The disclosure [requirement] was created because of somebody else’s business model was broken,” he said in an interview. “Everything specified in [the law] we already do all. And there’s nothing that prevents anybody from having done all of those things before.”

John, however, is skeptical that the reform law will address the larger issues related to the vertically integrated benefit managers. “PBM reform has been misunderstood in the market as a transparency problem. The real issue here is that it [the reform law] still doesn’t address the fundamental problem. This is not a transparency problem; it’s a business model problem.”

Rebates are one of the issues leading to high drug costs" John said. Addressing the high costs of prescription drugs will require a deeper understanding of how the money flows through the supply chain. For example, group purchasing organizations, he said, are paid through administration fees for the management of rebates. They are not paid, he said, through the rebates.