In November 2026, the US Department of Labor’s final rule on pharmacy benefit manager fee disclosure appeared in the Federal Register, following the department’s October 29 announcement. The rule requires covered pharmacy benefit managers and affiliated brokers or consultants serving large self-insured employer health plans to disclose compensation to plan fiduciaries. It also gives fiduciaries a right to audit that information. November 2 was the publication date; sponsors should use the final text’s effective and applicability provisions to determine the timetable for their arrangements.
Follow the money before signing
A pharmacy benefit manager can negotiate manufacturer rebates, administer formularies, arrange pharmacy networks and process claims. The plan’s administrative fee is therefore only one component of what the provider and its affiliates may earn. The rule covers direct and indirect compensation, including payments from manufacturers, amounts retained when the plan pays more than the pharmacy is reimbursed, and certain amounts recouped from pharmacies. It is designed to give the fiduciary enough information to assess the reasonableness of the arrangement and identify potential conflicts.
Initial disclosure is due before entering into, renewing or extending a covered contract. Ongoing disclosures report compensation actually received, normally semiannually or quarterly if the plan requests it. The distinction between the two stages matters. An estimate can inform a competitive tender, but the actual figures show whether the experience matched the assumptions used to award the contract. The fiduciary should be able to explain material differences.
Turn audit rights into a usable control
The Labor Department says fiduciaries may audit disclosed information at least annually, with the plan selecting and compensating the auditor. A plan can prepare by identifying the records needed to reconcile the disclosure, establishing who can obtain them and budgeting for independent review. It should also ask whether the provider can supply comparable figures across periods when products, networks or arrangements with affiliates change.
Take a bid advertised as having a low administrative fee. The committee should ask how the provider is compensated elsewhere, what amounts flow back to the plan and whether the provider’s economics differ across drug or channel choices. It can then compare bids using consistent assumptions about utilisation and prescription mix. The audit right gives the committee a way to test the disclosures behind the bid. It does not, by itself, establish that the plan achieved the best price or that members saved money.
Disclosure also needs an owner. Assign responsibility for logging deadlines, reviewing submissions and escalating missing information. Keep a record of the questions asked and the basis for accepting the answers. If a provider does not correct a disclosure failure, the department describes steps fiduciaries can take, including notifying it under specified conditions. Plan counsel should assess the precise process and scope for each arrangement.
Apply the lesson across markets carefully
Multinational benefits leaders can use the US rule as a prompt to examine other markets without assuming the legal obligation travels with them. Local pharmacy reimbursement, provider compensation and contract structures differ. The common governance question is whether the people approving a contract can identify all material payments and test how they might influence recommendations, network design or formulary choices.
The board’s role is to make sure the organisation can show how it assessed the arrangement. Procurement can negotiate information rights, the benefits team can own the recurring review and the fiduciary can decide how to respond to findings. A useful first step is to select one renewal, map compensation flows before tenders go out and agree what evidence will later be needed to reconcile them. That makes the final rule a practical control rather than another disclosure filed away after contracting.
Sources
Federal Register final rule published November 2
US Department of Labor announcement October 29
US Department of Labor disclosure guidance
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