New Federal Legislation Promises to Reshape How Prescription Drugs Are Purchased Across the U.S.
As rebate pass-through and reporting rules expand, TPAs could take on larger roles in pharmacy oversight and fiduciary support for employers.
LOUISVILLE, KY, UNITED STATES, March 18, 2026 /EINPresswire.com/ -- A sweeping federal overhaul of the pharmacy industry is expected to significantly reshape how third-party administrators operate employer health plans, forcing administrators to rethink revenue models, technology infrastructure and oversight responsibilities as new transparency rules take hold.
The provisions included in the recently passed Consolidated Appropriations Act of 2026, includes provisions requiring pharmacy benefit managers (PBMs) to disclose more information about drug pricing and to pass manufacturer rebates directly to health plans.
Pharmacy Benefit Managers (PBMs) act as intermediaries between drug manufacturers, insurers and pharmacies, negotiating drug prices, administering pharmacy benefits and determining which medications appear on insurance formularies. Today, the market is highly concentrated: the three largest PBMs — CVS Caremark, Express Scripts and OptumRx — handle roughly 80% of prescription claims in the United States, according to industry analyses.
Among the law’s most consequential provisions is a requirement that PBMs pass through 100% of manufacturer rebates, fees and alternative discounts directly to health plans rather than retaining a portion of those payments. The legislation also effectively eliminates spread pricing, a practice in which PBMs charge health plans more for prescriptions than they reimburse the pharmacies dispensing them.
For third party administrators (TPAs), who help manage claims processing and employee benefits management, these new changes could fundamentally alter how administrative services are structured. Traditional arrangements between TPAs and PBMs have historically included revenue-sharing tied to rebate retention or spread pricing. With those mechanisms largely eliminated, administrators may increasingly shift toward transparent, flat-fee administrative models that demonstrate value through measurable cost containment, improved clinical outcomes, and clearer reporting for employers,
“These changes represent one of the most significant adjustments to the prescription drug purchasing system in years,” said Paul Ford, CEO of Quilt Benefits. “As transparency improves, employers and administrators will have far better insight into where drug spending actually goes.”
Quilt Benefits works with employers that operate self-funded health plans, helping them manage prescription benefits by integrating pharmacy benefit manager services with data analytics and employee navigation tools. In self-funded arrangements, employers assume financial responsibility for healthcare claims while partnering with PBMs to administer pharmacy coverage and negotiate drug pricing. Over the past two decades, the share of U.S. employees covered by self-funded plans has grown from 44 percent in 1999 to over 65 percent in 2023.
The new legislation also introduces expanded reporting requirements for employer health plans with 100 or more employees. PBMs will be required to disclose detailed drug-level pricing information, net costs after rebates and total out-of-pocket spending through semi-annual reports, providing employers with a much clearer view into how prescription drug costs are structured.
As a result, TPAs may increasingly serve as fiduciary partners, helping employers renegotiate vendor agreements, monitor compliance and conduct independent audits of pharmacy benefit arrangements. Industry analysts say those disclosures will create a major operational shift for TPAs, which employers often rely on to interpret healthcare cost data and manage vendor relationships.
“We’ve always believed employers should be able to operate their health plans as true fiduciaries with clear data on where healthcare dollars are going,” Ford said. “These reforms move the industry in that direction by expanding transparency and giving plan sponsors more meaningful insight into prescription drug costs.”
Quilt Benefits is a leading self-funded health benefits administrator providing modern, flexible healthcare solutions designed for employers, CFOs, HR teams, and their employees. Leveraging advanced analytics and Smart Fabric Networks, Quilt optimizes provider networks and cost containment strategies to help employers control healthcare spending while maintaining high-value coverage. Through its comprehensive platform—including medical, prescription drug, dental, and vision administration—Quilt delivers transparent, data-driven benefit programs that improve financial predictability and support employee health and satisfaction. With decades of experience and a dedicated customer service approach, Quilt empowers employers to offer robust benefits that attract and retain talent without the rigid constraints of traditional insurance models. For more information visit www.quiltbenefits.com.
Daniel Mutter
MutterWorks
+1 305-926-1792
daniel@mutterworks.com
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