President Trump signed a $1.2 trillion spending package, provisions of which could radically change the way pharmacy benefit managers operate.

One of the main functions of PBMs is to negotiate discounts for health plans. However, critics of the pharmacy middlemen said PBMs have driven prices higher, rather than reining in drug costs. That's because the way reimbursement is structured – PBMs benefit from high list prices. Higher list prices on drugs mean higher rebates, and PBMs keep a portion of those rebates.

However, under the new law, PBMs will be prohibited from linking rebates to drug companies' list prices and be required to pass through 100 percent of rebates to plans and sponsors. Additionally, the legislation will require the Centers for Medicare and Medicaid Services to establish and enforce "reasonable and relevant" contracts for Medicare Part D plans. The legislation includes:

* Calls for greater transparency in the generic drug and biosimilar markets;
* Requires PBMs to submit semiannual reports of drug spending, rebates, spread pricing, formulary rationale, and benefit design;
* Grants CMS enforcement authority; and
* Creates a new designation known as "essential retail pharmacies" (defined as nonaffiliated pharmacies in rural areas with no other retail pharmacy for 10 miles, or for two miles in suburban areas or one mile in urban areas).

In January 2025, a Federal Trade Commission investigation found the three largest PBMs – CVS Health's Caremark Rx, Cigna's Express Scripts, and UnitedHealth's OptumRx – inflated the prices of specialty generic drugs, including medications for heart disease and cancer, beyond their costs of acquisition, earning more than $7.3 billion in revenue from 2017 to 2022.

In addition, PBMs reimbursed affiliated pharmacies at higher rates than unaffiliated independent pharmacies for almost every one of the generic drugs that FTC staff analyzed.

Transparency-Rx called the spending bill a "game-changer" and "critical first step" toward restoring market competition. According to the coalition of licensed transparent PBMs, "The provisions remove perverse incentives tied to high list prices and rebate‑driven compensation; standardize PBM definitions and guarantees across the marketplace; and strengthen contract transparency and audit rights to provide greater visibility into how rebate arrangements truly function.”

In addition to the changes Congress made, the FTC announced a settlement with Express Scripts requiring it to make certain changes in its practices that would increase transparency and lead to lower prices. The change made by the settlement are projected to lower patients' out-of-pocket costs for certain drugs, including insulin, by up to $7 billion over 10 years, the FTC said.

FTC's lawsuit claimed Express Scripts had "artificially inflated the list price of insulin drugs by using anticompetitive and unfair rebating practices, and impaired patients' access to lower list price products, ultimately shifting the cost of high insulin list prices to vulnerable patients."

Other parts of the spending package signed by Trump included HHS funding, such as the 2026 budget for the National Institutes of Health, temporary extensions of telehealth flexibilities for Medicare, and pandemic-era hospital-at-home flexibilities.