LUGPA Policy Alert – Strengthening DOL’s Proposed Rule on PBM Fee Transparency

March 2026 

At-a-Glance Essentials

What’s Changing:
The U.S. Department of Labor (DOL) has proposed a rule requiring pharmacy benefit managers (PBMs) serving self-insured employer health plans to disclose detailed information on compensation, rebates, fees, and financial arrangements.

Why It Matters:
PBMs play a central role in the prescription drug supply chain, yet their pricing and revenue models remain largely opaque. This lack of transparency has been linked to higher drug costs, restricted pharmacy networks, and reduced patient access, particularly for specialty medications commonly used in urology.

Action Points:

• LUGPA has cosigned a coalition letter through the PBM Accountability Project supporting the proposed rule.
• The coalition urges DOL to strengthen disclosure requirements and close potential reporting gaps.
• LUGPA will continue advocating for reforms that promote transparency, fair competition, and patient-centered care.

Issue Overview

LUGPA has joined a broad coalition of stakeholders in support of DOL’s proposed rule, “Improving Transparency into Pharmacy Benefit Manager Fee Disclosure.” Issued under ERISA authority, the rule would require PBMs to provide plan fiduciaries with detailed reporting on compensation structures, including fees, rebates, and other financial arrangements.

The proposal reflects growing bipartisan concern over PBM market power and vertical integration with insurers and pharmacies, which critics argue has enabled the use of complex pricing mechanisms that obscure true drug costs and limit competition.

The coalition views the rule as a meaningful step toward accountability but emphasizes that stronger safeguards are needed to prevent PBMs from exploiting gaps in reporting requirements.

Coalition Recommendations to Strengthen the Rule

• Comprehensive Compensation Disclosure: Require reporting of all PBM revenue streams, including spread pricing, manufacturer rebates, administrative fees, retained discounts, and payments tied to pharmacy services. The coalition also urges transparency into pharmacy reimbursement across both independent and PBM-affiliated pharmacies to identify potential conflicts of interest.
• Direct Reporting to DOL: Ensure key information—such as aggregate compensation, conflicts of interest, and fiduciary status—is reported directly to DOL to strengthen federal oversight and enforcement.
• Clear Fiduciary Standards: Provide explicit definitions and examples of when PBMs are acting as fiduciaries to prevent inconsistent interpretation and ensure accountability.

Relevance to LUGPA Members and Urology Patients

Independent urology practices frequently manage high-cost and specialty medications, including oral oncolytics, androgen-deprivation therapies, and treatments for chronic urologic conditions. PBM practices—such as formulary restrictions, network steering to affiliated pharmacies, and opaque fee structures—can:

• Disrupt medically integrated, physician-led care
• Limit patient access to in-office dispensing
• Increase administrative burden and delays in treatment
• Undermine the financial stability of independent practices

Improved transparency in employer-sponsored plans—widely used by LUGPA patients—would help ensure negotiated savings are passed on to patients and plan sponsors, while promoting a more competitive and accountable pharmacy marketplace.

LUGPA’s Position

LUGPA strongly supports the coalition’s recommendations and urges DOL to finalize the rule with strengthened transparency requirements and enforcement mechanisms. Enhanced PBM oversight is critical to addressing anti-competitive practices and ensuring patients can access needed therapies without unnecessary barriers.

LUGPA will continue to engage in PBM reform efforts and monitor implementation of the rule to ensure policies support independent specialty practices and high-quality, patient-centered care.