Self-funded employers are moving away from the largest pharmacy benefit managers ahead of rebate pass-through rules in 2028
Self-funded employers heading into 2027 renewals are moving pharmacy benefit business away from the three largest pharmacy benefit managers (PBMs), as federal reform and new pricing models change the contract terms on offer. The share of employers using CVS Caremark, Express Scripts or Optum Rx fell from 63.4 percent in 2025 to 54.3 percent in 2026, according to the National Alliance of Healthcare Purchaser Coalitions' 2026 Pulse of the Purchaser survey, released on August 11, 2026. The survey of 408 employers and purchasers ran in May and June 2026.
Smaller organizations drove the change. Among employers with fewer than 1,000 employees, the share using a Big Three PBM fell from 69.7 percent to 43.8 percent. Among Big Three clients overall, 56 percent said they were considering a switch within one to three years.
What federal PBM reform requires – and when
The Consolidated Appropriations Act, 2026 (CAA 2026), signed into law on February 3, 2026, requires PBMs to pass through 100 percent of rebates, fees, discounts and other manufacturer payments to group health plans covered by the Employee Retirement Income Security Act (ERISA). It also brings PBMs under ERISA's service provider compensation disclosure rules and gives plans the right to audit rebate pass-through at least once a year.
None of those requirements is in force yet. The reporting and notice provisions apply to plan years beginning on or after August 3, 2028. The pass-through rules apply to contracts entered into, renewed or extended for plan years beginning on or after that date, which means January 1, 2029, for calendar-year plans. A separate US Department of Labor (DOL) proposed rule would require PBMs to disclose rebates they retain but would not mandate pass-through.
Because the statutory rules attach at renewal, a multi-year PBM contract signed in the 2027 cycle may not fall under the pass-through requirement until it is next renewed or extended. That puts rebate terms, audit rights and compensation reporting on the table in current negotiations, at a time when employers are cutting underperforming benefits vendors ahead of 2027.
Big Three PBMs change their pricing models
Each of the Big Three has announced a pricing change, according to the Fall 2026 PBM policy and legislative update from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, the Boston-based law firm. Optum Rx said in May 2026 it would move to a fee-based model built on per-member monthly fees, replacing pricing tied to manufacturer list prices or prescription volume. Express Scripts committed to a rebate-free, pass-through model, rolling out to fully insured clients in 2027 and becoming standard for all clients by 2028. CVS Caremark has signaled a move toward cost-plus pharmacy reimbursement, which pays pharmacies a drug's acquisition cost plus a set markup and dispensing fee.
Business Group on Health's 2027 Employer Healthcare Strategy Survey of 127 large employers found that 32 percent will offer transparent or next-generation PBM arrangements in 2027, and another 47 percent are considering the move for 2028 or 2029.
GLP-1 platforms operate outside the PBM contract
Manufacturers and pharmacy platforms are also offering employers routes to high-cost drugs that bypass a traditional PBM, particularly glucagon-like peptide-1 (GLP-1) medications for diabetes and weight loss. GoodRx launched its Employer Direct platform in February 2026, which lets employers subsidize manufacturer cash prices at the pharmacy counter. Eli Lilly's Employer Connect platform, launched in March 2026, offers Zepbound at a list price of $449 a month through a dedicated pharmacy network supported by more than 15 independent program administrators.
These arrangements fall outside a standard PBM request for proposal. The benchmarks plan sponsors rely on in that process, including rebate pass-through rates, spread pricing comparisons (the gap between what a PBM charges a plan and what it pays the pharmacy) and formulary terms, do not carry over. Plan fiduciaries evaluating direct-to-employer programs need separate criteria, and the coverage decision carries its own risk profile: Sun Life data links GLP-1 coverage decisions to catastrophic claim risk.
Congress targets PBM payments to brokers
The PBM Kickback Prohibition Act (H.R. 7895), introduced on March 12, 2026, by Rep. Rick Allen, a Georgia Republican who chairs the House Health, Employment, Labor, and Pensions Subcommittee, would amend ERISA to bar PBMs from paying direct or indirect compensation to brokers, consultants or advisors in exchange for steering employer health plan business their way. The House Committee on Education and the Workforce advanced the bill 34–0 on May 21, 2026, and it was reported to the full House on July 2, 2026. At the markup, Allen said PBMs "operate through a complex and opaque system of fees and rebates."
The bill has not passed the House, and no Senate companion has been identified. Broker pay is drawing scrutiny elsewhere too, including Macy's workers' claims that 37 cents of every benefits dollar went to a broker.
