States Push for Clarity as Federal PBM Transparency Rule Advances

Key Takeaways

• Federal transparency requirements are advancing: The proposed rule would require PBMs to disclose compensation and fee structures to employer-sponsored health plans under ERISA.
• State oversight remains significant: All states have enacted PBM-related laws, many of which already include transparency provisions.
• Non-preemption is a priority: State attorneys general are seeking clear confirmation that federal requirements will not override existing state PBM laws.
• Coordination is encouraged: The letter calls for federal and state regulators to work together on oversight and enforcement.
• Transparency remains a shared focus: Across jurisdictions, policymakers continue to prioritize increased visibility into PBM operations and drug spending.

A Federal Push for Greater PBM Transparency

A bipartisan coalition of state attorneys general is calling for refinements to a proposed federal rule that would expand transparency requirements for pharmacy benefit managers (PBMs).

The rule, issued by the US Department of Labor, would require PBMs to disclose detailed compensation and fee information to employer-sponsored health plans in order to qualify for certain protections under the Employee Retirement Income Security Act (ERISA).

The proposal is part of a broader effort to increase visibility into how prescription drug benefits are managed and financed within self-funded employer plans.

PBMs’ Expanding Role Draws Scrutiny

PBMs have become central players in the prescription drug supply chain, with responsibilities that extend beyond claims processing to include negotiating rebates, setting reimbursement rates, and designing formularies.

As their role has grown, so has concern about limited transparency into their financial arrangements. The attorneys general point to complex contracting structures and market concentration as factors that can make it difficult for plan sponsors and regulators to fully understand how drug spending is allocated.

What the Proposed Rule Would Require

The proposed regulation would tie PBM transparency requirements to ERISA’s prohibited transaction framework. Under this structure, service providers—including PBMs—must meet certain disclosure standards for their arrangements with health plans to be considered permissible.

For plan fiduciaries, the disclosures are intended to support better evaluation of:

• Total compensation paid to PBMs
• Fee structures and financial incentives
• Alignment between PBM services and plan interests

State Laws Already Address Transparency

The letter highlights that PBM oversight is already well established at the state level. All states, along with Washington, D.C., and Puerto Rico, have enacted laws targeting PBM practices.

These laws often include:

• Transparency and reporting requirements
• Limits on certain contracting practices
• Protections for pharmacies and patients

Federal–State Coordination Remains a Focus

A central theme in the comments is the relationship between the proposed federal rule and existing state regulations.

The attorneys general request that the Department of Labor clarify that the rule is not intended to preempt state PBM laws. They argue that state transparency requirements generally do not dictate plan design or benefits and therefore should not conflict with ERISA.

They also encourage the Department to explicitly support coordination with state regulators, including information sharing and joint enforcement where appropriate.

The attorneys general express support for the rule as a step toward improving transparency, while recommending additional clarity on how it will be implemented alongside state oversight.

They also suggest that future rulemaking related to PBM pricing models be addressed separately, given the complexity and overlap with other policy changes.

The Bottom Line

The proposed PBM transparency rule reflects ongoing efforts to provide employer health plans with greater insight into prescription drug benefit management. With input from state attorneys general, the next phase of rulemaking will likely focus on clarifying how federal requirements align with existing state frameworks—while maintaining a consistent approach to oversight.

State officials emphasize that these policies are designed to provide visibility into drug spending and support enforcement of existing standards.

Reference

National Association of Attorneys General. Letter to the US Department of Labor re: Improving Transparency Into Pharmacy Benefit Manager Fee Disclosure (RIN 1210-AB37). April 15, 2026. Accessed April 17, 2026. https://files.constantcontact.com/6b6ea99f701/afac72b6-86e9-4ff7-ac94-69c13410c902.pdf