Trump Signs PBM Reforms: Could Employers Buy Drugs Directly?

Recent reforms to pharmacy benefit manager (PBM) practices, signed into law on February 4, 2026, are poised to reshape the landscape of prescription drug pricing, and access. The changes, enacted as part of a larger Health and Human Services spending bill, aim to increase transparency and potentially allow employers to purchase drugs directly from manufacturers, bypassing PBMs altogether.

Reining in Pharmacy Benefit Managers

For years, PBMs have operated as intermediaries between drug manufacturers, insurance plans, and pharmacies, negotiating rebates and managing formularies. However, concerns have grown regarding a lack of transparency in these negotiations and the impact on overall drug costs. The new law addresses some of these concerns by prohibiting PBMs from linking their payments to drug prices in Medicare and requiring them to pass through 100% of rebates to employer-sponsored insurance plans. These measures are intended to shed light on how PBMs profit and ensure that savings are passed on to consumers and employers.

The reforms also include transparency measures for both the commercial and Medicare markets, requiring detailed reporting on drug spending, rebates, and fees. This increased visibility is expected to empower plan sponsors and regulators to better understand the complexities of the drug supply chain and identify potential areas for cost savings.

Potential for Direct Sales

One significant potential outcome of the new law is the possibility of employers purchasing drugs directly from manufacturers. Previously, drugmakers were hesitant to engage in such arrangements, fearing repercussions from PBMs. However, with the increased transparency mandated by the reforms, manufacturers may be more willing to explore direct sales agreements with employers. Elizabeth Mitchell, CEO of the Purchaser Business Group on Health, noted that the new disclosure requirements could “unlock a lot of creative arrangements.”

This shift could circumvent the higher list prices often associated with drugs when PBMs are involved. The administration’s pending TrumpRx website, designed to connect consumers with direct-to-consumer sales programs, could further facilitate this trend, although details about its functionality remain limited.

Industry Response and Concerns

The PBM industry has expressed concerns about the new regulations. The Pharmaceutical Care Management Association (PCMA) argues that the restrictions and reporting requirements will ultimately lead to higher prices by hindering their ability to negotiate rebates. Brendan Buck, PCMA Chief Communications Officer, stated that the industry deserves credit for “persuading people that discounts are in fact bad, and PBM transparency, somehow, is the roadblock to falling drug prices.”

However, employers and pharmacies have long advocated for PBM reforms, seeking greater transparency and fairer practices. A.J. Barbarito, an associate at Frier Levitt, highlighted that the law directs regulators to enforce pharmacy network standards, ensure fair reimbursement practices, and prevent PBMs from steering patients to their own pharmacies – areas where regulators have historically taken a hands-off approach.

Broader Healthcare Measures

The PBM reforms are just one component of a broader healthcare package passed by Congress. Other measures included in the bill address hospital billing transparency, provide additional support for pediatric cancer research, and expand Medicare coverage to include multi-cancer screening tests. These provisions reflect a concerted effort to address multiple challenges within the healthcare system.

Impact on Medicare and Ongoing Oversight

The new law also includes specific reporting obligations for Medicare drug plans, further enhancing transparency within the program. The Department of Labor has also proposed a rule requiring PBMs to disclose rebates and fees, complementing the legislative changes and providing a legal basis for its implementation. This coordinated approach between legislative and regulatory action is intended to create a more comprehensive and effective system of oversight.

Express Scripts Settlement

Alongside the legislative changes, February 4, 2026, also saw Express Scripts reach a “landmark” settlement with the Federal Trade Commission (FTC) in a suit concerning insulin pricing. This settlement underscores the growing scrutiny of PBM practices and the commitment of regulators to address anti-competitive behavior within the pharmaceutical industry. The details of the settlement suggest a focus on preventing manipulation of insulin prices and ensuring patient access to this critical medication.

The combined effect of these reforms – legislative changes, regulatory actions, and legal settlements – signals a significant shift in the power dynamics within the pharmaceutical supply chain. While the long-term impact remains to be seen, the changes are expected to increase transparency, empower employers and patients, and potentially lower prescription drug costs.