Where PBMs fit into the new market access landscape, how pharma companies can respond and the questions that remain.
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Pharmacy benefit managers (PBMs) sit at the center of an increasingly complex web of relationships among manufacturers, health insurers, pharmacies and employers. While they streamline negotiations between employers and pharmaceutical companies, increase price competition and standardize claims, formulary and utilization practices, they’ve recently faced increased scrutiny because of potential conflicts of interest and opaque sources of revenue.
As a result, the Trump administration called on the secretary of labor in a 2025 executive order to “improve employer health plan fiduciary transparency into…compensation received by [PBMs].”1 With the passage of the 2026 Consolidated Appropriations Act (CAA), measures to increase PBM transparency became law. These restrictions represent a turning point for PBMs, but not in the way many pharma leaders might expect.
On its face, the act benefits employers and commercial health plans by prohibiting PBMs from retaining any portion of the rebates drugmakers pay. Once the law goes into effect on Aug. 3, 2028 (effective Jan. 1, 2029, for calendar-year health plans), PBMs must pass through 100% of rebates, fees, alternative discounts and other remuneration they receive to Employee Retirement Income Security Act-governed employer plans, further benefiting patients.2 PBMs will also have to provide detailed reports on spread pricing practices, in which they charge employers more for a drug than they pay pharmacies, and incentives that encourage the use of PBM-affiliated pharmacy practices. By mandating that Medicare delink PBM compensation from list prices, the act may also provide a glimpse at future commercial reforms.
All these changes alter how PBMs are paid, thereby changing their incentives. Manufacturers will have to adapt in turn, shifting their approach to how they negotiate with entities such as Optum Rx and Express Scripts. However, contrary to how it might sound, the act won’t sideline PBMs; rather, it will force them to exert tighter controls.
Over the next two years, PBMs will intensify existing practices to reassert their leverage over market access. Pharma companies that fail to pivot will face unfavorable formulary placements, more competitive pressure and even exclusion.
As rebate reforms constrain some of their revenue streams, PBMs will expand formulary placement and utilization management tactics to maintain an advantage in manufacturer access negotiations.
Barring excluding drugs from their formularies completely, PBMs will play more with tier placement, slotting some drugs within a class into higher tiers with higher copays to discourage their uptake. They may also widen the cost differential between tiers, narrow the number of drugs within a preferred tier or even completely restrict formulary access for certain indications for a multipurpose drug, making tier placement even more important in negotiations with manufacturers.
Even for two drugs on the same tier, PBMs can alter the frequency one is prescribed over the other by manipulating the conditions under which patients are authorized to take them. While these utilization tactics are nothing new, PBMs may intensify them in costly ways. For example, instead of requiring a patient to try drug A before drug C is covered — also known as step therapy — PBMs may now require a double step, mandating a patient try drugs A and B first, further discouraging the use of drug C.
Prior authorizations will also likely become more complicated, with PBMs going beyond physician attestation to authorize only patients with lab values that precisely align with a drug's clinical trial inclusion criteria, rather than those within a wider acceptable range.3 Compiling these results will put added strain on physicians’ administrative teams, further disincentivizing them from prescribing certain drugs.
To sustain direct cash flow and fill the revenue gap created by rebate pass-throughs, PBMs might instead demand flat fees from drugmakers for formulary access. Flat fees may actually create more stable recurring revenue for PBMs, expanding their ability to impose additional management, data analytics and specialty management fees.
Finally, we’ll continue to see further vertical integration, in which overarching organizations consolidate PBMs, insurers and pharmacy networks under singular control.4 With PBMs even more tightly managing how drugs are covered and distributed, they can condition formulary access on dispensing through preferred or affiliated pharmacies, which will substantially affect manufacturers’ strategies.
Though the CAA diminishes some of their revenue channels, PBMs will still be able to strengthen their core levers of control to maintain their leverage. However, there are still many unsettled market access dynamics, potentially offering drugmakers new opportunities.
As rebate-driven economics diminish and transparency for health plans increases, PBMs may lean more heavily on contracting strategies and private-label manufacturing.
Both PBMs and pharmaceutical companies have already been using portfolio contracting to establish the most favorable arrangements for formulary inclusion and profitability. Under heightened employer scrutiny, however, PBMs may ramp up strategies, including increasing cross-product concessions, negotiating entire classes or indications of drugs separately, and requiring more economic and utilization data from manufacturers to justify formulary inclusion to employers. PBMs may also accelerate their shift to outcomes-based contracting from value-based arrangements.5 By tying manufacturer payments to real clinical results, outcomes-based contracting will further insulate PBMs from the risks of an underperforming drug and give them an additional avenue to increase revenue.
PBM private labeling will also shift power dynamics. In 2025, all three major PBMs launched their own biosimilars for Johnson & Johnson’s Stelara, following their success with Humira biosimilars.6 With more vertical integration, PBMs may expand their private-label pursuits to directly control more medications in their formularies. The question is, will the biosimilar manufacturing and management expenses be worth the potential gains? Historically, PBMs have preferred high-rebate, original medications over lower-cost biosimilars.
Although the extent to which PBMs will intensify these tactics is unclear, the following are three categories in which new openings exist for manufacturers:
For pharma companies, it’s important to realize that the 2026 reforms don’t dismantle PBM leverage; instead, they change the incentives that drive PBM strategic decision-making.
In response, manufacturers must eliminate outdated, rebate-focused approaches to pricing. They can immediately adjust their gross-to-net strategies for this more transparent environment, modeling how their products perform on net cost to employers. They may also explore segmenting their strategies by channel, since the CAA affects Medicare differently from self-funded employer arrangements, for example. Finally, they can shift their portfolio strategies to emphasize predictability and negotiate across franchises, and undergird these agreements with real-world performance data to document the true value of each drug within larger bundles.
Though the new regulations won’t go into effect for another two years, drugmakers that act now to take advantage of the new opportunities they afford will maintain and even gain an edge in the current, PBM-friendly pharma landscape.
Steve Callahan is senior director, advisory & insights, MMIT
References
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