Tired of the BS? The PBM Industry Is Cracking: FTC Settlements, New Rules & Fiduciary Risk

The healthcare benefits industry is changing faster than it has in years.

And honestly?

It feels like we’ve finally reached a breaking point.

On this episode of The EOB Podcast, we break down the growing pressure facing Pharmacy Benefit Managers (PBMs), including the FTC settlement involving Express Scripts, proposed Department of Labor transparency rules, CAA 2026 reforms, and fiduciary litigation that could permanently reshape employer-sponsored healthcare.

Because one thing is becoming increasingly clear:

The old model is being challenged from every direction at once.

And employers need to be ready.

The PBM Industry Is Under More Pressure Than Ever

There are plenty of areas within healthcare that deserve scrutiny, but right now, PBMs are clearly in the spotlight.

And frankly, we think they’re just the first domino.

As we discussed during the episode, multiple forces are converging at the same time:

• FTC action against major PBMs
• Proposed Department of Labor transparency requirements
• CAA 2026 reforms
• Fiduciary litigation involving prohibited transactions
• Drug manufacturers selling directly to employers
• The rise of transparent PBMs
• Growing public frustration around healthcare affordability

The market is essentially saying the same thing:

Enough is enough.

We’re seeing direct-to-employer pharmacy models pop up everywhere. Drug manufacturers are bypassing traditional channels. Employers are asking harder questions. And patients are tired of paying more than anyone else in the world for prescription drugs.

Something had to give.

The FTC Settlement Could Change the Entire Conversation

One of the biggest developments we covered was the FTC settlement involving Express Scripts and its affiliates.

The proposed standard offering would:

• Eliminate spread pricing
• Remove rebate guarantees
• Prohibit compensation tied to drug list prices
• Cap member cost-sharing at net drug costs
• Expand claim-level reporting
• Require disclosure of broker and consultant compensation

Those are massive changes.

And perhaps the most interesting part?

Express Scripts publicly indicated that they don’t expect the settlement to materially impact their business.

That raises an obvious question:

If transparent models are truly viable, why aren’t more employers demanding them already?

Hidden Compensation Is Becoming Harder to Defend

Throughout this conversation, we kept coming back to one core issue:

Hidden money.

Whether it’s:

• Spread pricing
• Rebate retention
• Negative PMPM arrangements
• Administrative service fees
• Broker compensation tied to PBMs
• Manufacturer incentives
• Indirect compensation structures

The common denominator is a lack of transparency.

And if employers don’t understand where the money is flowing, how can they determine whether compensation is reasonable?

That question is becoming increasingly important.

Fiduciary Responsibility Is No Longer Optional

One of the biggest themes in this episode was fiduciary responsibility.

Under ERISA, entering into contracts with service providers is technically considered a prohibited transaction unless an exemption applies.

To qualify for that exemption, employers generally need to demonstrate three things:

1. The service is necessary.
2. The contract terms are reasonable.
3. The compensation being paid is reasonable.

The first requirement is usually straightforward.

The second and third?

That’s where things get complicated.

Especially when compensation structures include hidden rebates, indirect fees, and contract language that most employers never see or fully understand.

CAA 2026 Is Going to Change the Rules

The conversation also focused heavily on CAA 2026 and what it means for employers moving forward.

Among other things, the legislation requires:

• 100% pass-through of rebates
• Enhanced compensation disclosures
• Reduced spread pricing opportunities
• Stronger enforcement mechanisms
• Significant penalties for non-compliance

The market will have to adapt.

And while these changes won’t happen overnight, they send a very clear signal about where healthcare regulation is heading.

Greater transparency is no longer optional.

It’s becoming the standard.

Healthcare Affordability Has Become a Bipartisan Issue

One thing we found encouraging during this discussion is that healthcare affordability increasingly feels like a bipartisan issue.

People across the political spectrum agree on a few basic ideas:

• Healthcare should be affordable.
• People should understand what they’re paying.
• Employers should have access to their own data.
• Competition should be fair and transparent.

When lawmakers with very different philosophies start supporting similar reforms, that’s usually a sign that the problem has become impossible to ignore.

Because at nearly six trillion dollars in annual spending, the current system simply isn’t sustainable.

Asking for Your Own Data Shouldn’t Feel Revolutionary

One of the more frustrating parts of healthcare is how difficult it can be to obtain information that should belong to the plan in the first place.

During the episode, we shared a real example involving RXDC reporting.

A client wanted access to their own data.

The response?

Delay after delay.

Meetings to discuss whether the request was appropriate.

Questions about why the employer wanted to see their own information.

Think about how absurd that sounds.

If you bought something at a store and asked for a receipt, nobody would ask why.

Yet in healthcare, asking for basic transparency often feels like you’re requesting state secrets.

That needs to change.

Trust Is Important—But Verification Matters More

We’ve said this before, and we’ll keep saying it:

Trust is important.

Verification is better.

Good relationships matter in healthcare, but relationships alone do not protect employers from fiduciary risk.

Verification means:

• Reviewing contracts
• Understanding compensation
• Requesting disclosures
• Auditing performance
• Comparing alternatives
• Asking difficult questions

The math has to math.

And if it doesn’t, employers need to know why.

Indiana Might Be Showing the Future

We spent some time discussing Indiana because, honestly, some of the reforms happening there are incredibly interesting.

Indiana now requires:

• PBMs to act as fiduciaries
• TPAs to act with loyalty and prudence
• Data requests to be fulfilled quickly
• Greater transparency for employers
• Faster response times for plan information

Those standards sound remarkably similar to what employers have been asking for all along.

Which raises another question:

Why shouldn’t every employer expect the same level of transparency?

Direct Contracting Is Becoming a Real Alternative

Another major trend we discussed was direct contracting.

Whether it’s:

• Direct primary care
• Surgery centers
• Physician groups
• Hospitals
• Direct-to-employer pharmacy models

The market is increasingly looking for ways to remove unnecessary middle layers.

And employers are starting to realize they have more options than they once believed.

That creates opportunities for:

• Better pricing
• Stronger relationships
• Greater transparency
• Improved outcomes
• More control over plan design

Direct contracting isn’t a niche idea anymore.

It’s becoming mainstream.

Employers Have More Leverage Than They Think

One of the most practical takeaways from this episode was simple:

Use your leverage.

Especially during an RFP process.

That’s when vendors want your business.

That’s when contracts can be negotiated.

That’s when you can ask for:

• Zero spread pricing
• Zero rebate retention
• Standard transparent offerings
• Better disclosure language
• Stronger fiduciary protections

Once the contract is signed, your leverage decreases dramatically.

So if you’re going to ask hard questions, now is the time.

Being a Better Fiduciary Has an Incredible ROI

This conversation wasn’t just about compliance.

It was about opportunity.

Good fiduciary processes can lead to:

• Lower healthcare costs
• Better contracts
• More efficient plan design
• Direct contracting opportunities
• Stronger vendor accountability
• Millions of dollars in long-term savings

The return on investment can be enormous.

And it doesn’t require perfection.

It simply requires getting started.

Final Thoughts: Start With Your PBM

If there’s one thing we hope employers take away from this conversation, it’s this:

Just start.

You don’t need to rebuild your health plan overnight.

You don’t need to solve every problem tomorrow.

But you can start asking better questions.

And one of the best places to begin is with your PBM relationship.

Review your contracts.

Request disclosures.

Understand the compensation structure.

Ask for transparent alternatives.

Because the market is changing.

And employers that adapt early will likely be in the strongest position moving forward.

FAQ: PBM Transparency and Fiduciary Risk

What is spread pricing?

Spread pricing occurs when a PBM charges a health plan more for a prescription drug than it reimburses the pharmacy and keeps the difference as profit.

What does CAA 2026 require?

CAA 2026 introduces stronger transparency requirements, mandates 100% pass-through of rebates, limits certain compensation structures, and establishes new penalties for non-compliance.

What is a prohibited transaction under ERISA?

A prohibited transaction generally occurs when plan assets are transferred to service providers without satisfying exemptions related to necessity, reasonable contracts, and reasonable compensation.

Why are PBMs facing more scrutiny?

Regulators, employers, and lawmakers are increasingly focused on hidden compensation, spread pricing, rebate retention, and the lack of transparency within pharmacy benefit arrangements.

What should employers do right now?

Start by reviewing PBM contracts, requesting compensation disclosures, evaluating alternatives, and strengthening fiduciary oversight processes.

Listen to the Full Episode

The healthcare landscape is changing quickly, and employers need to stay ahead of it.

To hear our full conversation on PBM transparency, FTC settlements, fiduciary responsibility, direct contracting, and the future of employer-sponsored healthcare, listen to the latest episode of The EOB Podcast.

And if there are topics you’d like us to cover—or if you’d like to join us as part of our Friends With Benefits series—we’d love to hear from you! The best conversations happen when the audience helps shape them.