New PBM Rules Take Effect in 2029, and Plan Sponsors Should Not Wait.
- Ken Kemker
- May 10
- 3 min read
Federal policy changes are reshaping pharmacy benefits management, with new rules taking effect January 1, 2029.
Between managing renewals, keeping up with compliance in other areas, preparing for open enrollment, and running the daily work of benefits administration, it is easy to put this one aside.
A closer look at the timeline, though, suggests that 2026 is exactly the right time to act.
What Changes in 2029
The Consolidated Appropriations Act, signed on February 3, 2026, includes some of the most significant PBM reform provisions seen in years.
The new requirements are straightforward, and worth noting, because the current system is anything but.
Starting in 2029, PBMs will be contractually required to:
Pass through 100% of all rebates, fees, and other forms of remuneration received from drug manufacturers directly to your group health plan
Use pass-through pricing in all contracts
Meet increased fee disclosure requirements so you can see exactly what you are paying and why
DisclosedRx was built around exactly these principles from the start.
Why You Should Not Wait
The CAA prohibits renewing non-compliant contracts. On the surface, that sounds like a 2029 problem. In practice, it starts much sooner.
Most PBM contracts run on multi-year terms.
If your agreement renews in 2027 or 2028 and it does not meet the new standards, you cannot simply roll it over.
You will need to renegotiate or find a compliant alternative, under time pressure, with less room to make a thoughtful decision.
You will be in the best position come 2029 if you review your contract in 2026.
What the Current System Looks Like
To understand why this legislation exists, it helps to understand how many traditional PBMs generate revenue.
Some of these practices carry significant cost:
Spread pricing, where the PBM pays the pharmacy less than what you are charged, can average between $5 and $25 per prescription
Retained supply chain credits, often called anything but a rebate to sidestep contractual language, can range from $0.50 to over $5.00 per script
Gag clauses have historically prevented pharmacists from telling your members when a medication costs less out of pocket than through their insurance
The CAA is bringing accountability to these practices across the industry, and that is a meaningful step forward.
The Questions Worth Asking Now
A simple contract review now can tell you a great deal. When you sit down with your current PBM, here are the questions worth putting on the table:
Does our contract require 100% pass-through of all rebates and supply chain credits?
Are there any fees or credits your organization retains that are not reflected in our admin fee?
Do you or any affiliated entity own a pharmacy that fills prescriptions for our plan?
Can you show us the actual price paid to the pharmacy for any given prescription?
Is your only source of revenue the admin fee we pay you?
If any of those answers are unclear, it is worth paying attention to. Full Disclosure means confident, clear answers to all of the above.
DisclosedRx operates as The Fiduciary and The Fully Disclosed PBM®.
No pharmacy ownership. No private equity. No outside investors.
Our sole sources of revenue are the admin fee our clients pay and a share of the specialty savings we generate together, 75% of which goes directly to the client.
When you are ready to get straight answers, we are ready to help.
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