PBM Reforms and FTC Settlements
It’s been a rough February for the PBM industry. In direct response to President Trump’s April and May 2025 executive orders, and in a rapid and well-planned succession, on February 3rd Congress finally passed and President Trump signed significant PBM reform legislation in the Consolidated Appropriations Act, 2026. On February 4th the FTC announced its “landmark” settlement with ESI, and, a day later the TrumpRx direct-to-consumer drug website was officially launched.
The PBM reform legislation is designed to regulate PBM practices as a means of increasing transparency, competition and lowering “patient” drug costs. Meanwhile, the FTC consent decree entered into by ESI and Ascent Health Services includes a series of provisions that apply, not just to insulins, but to all drugs managed by ESI, and will provide a likely framework for how the FTC will settle similar lawsuits with Caremark and Optum Rx in the June-July 2026 timeline.
Some of the PBM remedies implemented by these actions include:
Commitment to not discriminate between high and low list price versions of the same drug
Member cost sharing being tied to net, not list, drug prices
Prohibition on revenue from sources other than bona fide service fees and delinking PBM mandatory pharma fees from the product’s list price
Direct-to-Consumer pricing via TrumpRX, where patient payments will now count toward patient deductibles and OOP maximums
Elimination of steering and PBM discriminatory independent pharmacy practices such as spread pricing, non-competitive out-of-network pharmacy payment models, strengthening of "any willing pharmacy” provisions, and establishing “essential retail pharmacies” provisions in Medicare
Reshoring of PBM GPOs
Pass-through of 100% of the pharma rebate to health plans
Studies and reports on PBM future practices by both the GAO and MedPAC.
Before one gets too excited by the potential of these changes, it’s important to note that the implementation of these corrective actions does not occur until January 1, 2028, and 2029 thereby giving the PBMs amble time to change their business model and anti-discriminatory practices. In addition, the impacts could be diluted without mandatory external oversight and enforcement guidelines for these reforms, and PBM actions to shift costs to Pharma, health plans and patients in a non-transparent manner or to attempt to redefine the meaning and calculation of PBM net drug pricing.
It’s also likely PBMs will accelerate the:
Current shift from a rebate to a fee-based revenue model
Rate and variety of new PBM fees for both the Pharma industry and Health Plans
Continued vertical integration of PBMs health plans and provider networks, and
PBM ownership of generics and biosimilars
Pharma companies need to begin now to strategically plan for 2028–2029 implementation of these PBM reforms. For guidance on how best to proceed, readers are recommended to contact me or Rita Numerof at NAI-consulting.com.