SHARx Warns PBM Rebate Reform May Move Money Without Lowering Employer Costs

As regulators force greater transparency into pharmacy benefit management, SHARx says employers should look beyond rebate pass-through promises and determine whether total pharmacy costs are actually going down.

ST. LOUIS, Aug. 31, 2026 /PRNewswire/ -- Pharmacy benefit manager (PBM) reform is accelerating, but employers expecting new rebate and transparency rules to automatically deliver lower prescription costs may need to take a wider view.

Paul Pruitt, Chief Growth Officer and Co-Founder of SHARx, a procurement management solution for high-cost prescription drugs, cautions that pressure on traditional PBM revenue streams may shift where revenue is captured without lowering employer drug costs.

"Changing one PBM revenue stream does not automatically translate into lower costs for employers," Pruitt said. "The financial model can adjust, so plan sponsors need transparency across the entire arrangement to understand whether reform is producing real savings."

Looking at the Bigger Picture

Federal scrutiny supports the need for a broader view. The Federal Trade Commission (FTC) has documented extensive vertical integration among the largest PBMs and their affiliated insurers and pharmacies. A subsequent FTC staff report found that the three largest PBMs' affiliated pharmacies generated more than $7.3 billion in dispensing revenue above estimated acquisition costs on the specialty generic drugs studied from 2017 through 2022.

The U.S. Department of Labor's 2026 PBM disclosure proposal similarly seeks to give employers and plan fiduciaries greater visibility into compensation received by PBMs and their affiliates. For employers, that matters because they cannot determine whether an arrangement is delivering promised savings without seeing its full economics.

For Pruitt, those developments reinforce a larger concern: reforming one part of the PBM model does not necessarily reform the system around it.

When Rebates Shrink, Follow the Revenue

PBM reform has traditionally focused on rebates, spread pricing, and contract disclosures, but those measures may reveal only part of the economics influencing an employer's plan.

Revenue may also flow through specialty pharmacies, group purchasing organizations (GPOs), rebate aggregators, mail order pharmacies and other affiliated entities. For employers, the key question is not simply where PBM revenue shifts, but whether the total cost of providing the pharmacy benefit actually declines.

The FTC reported that pharmacies affiliated with the three largest PBMs received 68% of specialty-drug dispensing revenue in 2023, up from 54% in 2016, and found that major PBMs generally reimbursed affiliated pharmacies at higher rates than unaffiliated pharmacies for the specialty generic drugs examined.

"When your PBM controls the dispensing and that's where most of the revenue comes from, that's a problem," Pruitt said.

In July 2026, the FTC announced a settlement with CVS Health's Caremark Rx and affiliated rebate aggregator Zinc Health Services that included measures intended to increase transparency and alter certain PBM compensation practices.

Pruitt cautions that regulatory action should be treated as the beginning of the analysis, not proof that total pharmacy economics have been fixed.

Contract Transparency Is Not Economic Transparency

A PBM contract can disclose administrative charges, rebate guarantees, and discount terms while offering limited insight into revenue generated elsewhere within a vertically integrated organization.

The Department of Labor's proposed rule would require PBMs to disclose certain payments received from drug manufacturers, pharmacies, and other sources and allow plan fiduciaries to audit those disclosures.

Pruitt encourages employers to request a complete ownership and revenue-flow picture and ask:

• Which affiliated entities participate in the pharmacy benefit?
• What are the ownership relationships among PBMs, pharmacies, GPOs, rebate aggregators, and service providers?
• What manufacturer rebates, service fees, and other compensation are connected to the account?
• What compensation is tied to dispensing, formulary placement or utilization?
• What subcontractor relationships and payments are connected to the plan?
• Do independent audit rights cover affiliates and subcontractors?

"The question isn't whether a PBM can show you a transparent contract," Pruitt said. "The question is whether you can see the economics of the entire system you're paying for."

Zoom In on Total Pharmacy Spend and Access

For Pruitt, the most meaningful test of rebate reform is what happens to an employer's total net pharmacy spend and employees' ability to obtain their medications. That means looking beyond rebates to specialty-drug costs, fees, manufacturer payments, access barriers, and member disruption.

Rather than continually negotiating around new revenue mechanisms, Pruitt says employers should also consider whether every high-cost prescription needs to flow through the traditional system.

"The healthcare system often creates the appearance of value without lowering total costs," Pruitt said. "If employers can leave the traditional PBM model and get a simpler, lower-cost result, then the value of that model deserves closer scrutiny."

For employers, success ultimately means lower total pharmacy costs, clearer economics, and reliable access to medications.

About SHARx

SHARx is a procurement and supply chain management solution for high-cost prescription drugs. Working alongside employer-sponsored health plans, SHARx helps employers address the financial impact of expensive and specialty medications while providing members with personalized advocacy and access to cost-effective sourcing solutions. SHARx evaluates multiple sourcing pathways with the goal of making prescription access more affordable, predictable, and sustainable.

Learn more at SHARXplan.com.

References

• Federal Trade Commission. (2024, July). Pharmacy benefit managers: The powerful middlemen inflating drug costs and squeezing Main Street pharmacies.
• Federal Trade Commission. (2025, January 14). Specialty generic drugs: A growing profit center for vertically integrated pharmacy benefit managers.
• Federal Trade Commission. (2026, July 14). FTC secures major settlement with Caremark, resolving antitrust case against second drug middleman.
• U.S. Department of Labor, U.S. Department of Health and Human Services, & U.S. Department of the Treasury. (2024). Prescription drug spending, pricing trends, and premiums in private health insurance plans. U.S. Department of Labor, Employee Benefits Security Administration.
• U.S. Department of Labor. (2026, January 29). U.S. Department of Labor proposes historic pharmacy benefit manager fee disclosure rule. Employee Benefits Security Administration.

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SOURCE SHARx