May In-The-Know

State Price Limits

In 2019, Maryland launched the first Prescription Drug Affordability Board (PDAB), and 10 states now have an active version of this framework. Their authority varies widely; full-authority boards use Upper Payment Limits (UPLs) to cap drug prices, while limited-authority boards only review and make recommendations. More states are moving toward PDABs though states like New Hampshire and Ohio have pushed back, citing minimal impact on actual drug costs. Expect UPL adoption to grow despite mixed results.

Implementing PDABs and UPLs has pros and cons, as they offer potential long-term cost relief but also create complexity and legal uncertainty. When a PDAB puts a price cap on a drug, the Pharmacy Benefit Manager (PBM) evaluates whether it is still practical to keep that drug on a client’s formulary. This, in turn, affects what both an employer and employee pay for a prescription. It is possible that employees’ deductibles, copays, or coinsurance percentages may increase, leaving the employer to decide how much of that cost shift to absorb.

Self-funded plan sponsors, however, do not need to abide by UPL requirements under the Employee Retirement Income Security Act (ERISA). While it is not likely that many would choose to reimburse at the lower rate, but if this is the case, pharmacies might limit their stock of certain medications, especially high-cost specialty drugs. If a drug under a UPL remains officially covered, PBMs may force restrictions such as an increase in cost-sharing, step therapy requirements, or prior authorization, making it harder for employees to access the medicines they need.

How to help your clients:

• Prepare for price variability by reviewing your clients’ claims data and alerting them if a common prescription utilized by their employees comes under review by the state PDAB
• Review and update contracts to adapt state specific rules and advise your clients to anticipate offering alternative drugs if those on the current formula become too costly or restricted.
• Prepare your clients for changes in PBM models, especially in terms of the financial impact regarding the reduction in drug cost, higher premiums, and unreliable pharmacy access

Federal PBM Scrutiny

On January 1st, 2026, The Employee Benefits Security Administration, Department of Labor (DOL) proposed a new regulation regarding PBMs and associated consultants. It calls for expanded ERISA compensation transparency between these service providers and self-funded plan fiduciaries, including the verification of the amount the consultant is intended to receive and applying strict compensation disclosure rules directly to PBMs.

On February 3, 2026, The Consolidated Appropriations Act was written into law as another way to increase openness between PBMs and employers. PBMs must now pass 100% of rebates and related payments to the employer; this includes any manufacturer rebates, alternative discounts, price concessions, and fees tied to the employee. The new law allows your clients the right to conduct an annual audit of their PBMs using an auditor of their choice.

On February 5, 2026, the federal government launched TrumpRx.gov, a new direct-to-consumer website designed to help individuals buy prescription medications at discounted prices. While TrumpRx will not save your clients' plan expenditures directly, it gives employees a clearer view of actual drug costs. This awareness may put pressure on your clients, as the plan sponsors, to demand better pricing, greater clarity, and more accountability from their PBM.

How to help your clients:

• Provide your clients with a complete disclosure of your earnings regardless of the regulation to improve relations
• Walk your clients through what a PBM audit looks like, help them select an independent auditor, and make sure their PBM contract reflects the new requirements
• Coach your clients on strategies for tougher contract negotiations with their PBM

Judicial Involvement

On February 10, 2026, in American Hospital Association et al. v. Kennedy et al., the U.S. District Court of Maine returned the 340B Rebate Model Pilot Program to the Department of Health and Human Services (HHS), effectively halting its implementation. This section mandates that pharmaceutical manufacturers participating in Medicaid must provide uninsured or low-income earning outpatients with discounted prices through healthcare organizations.

According to the National Alliance of Healthcare Purchaser Coalitions, these healthcare companies instead charge full price for the discounted prescriptions to make a profit for themselves. The National Alliance found that large hospitals participating in the 340B program charge self-funded commercial plans an average of 7.6% more for services than non-340B hospitals; this adds up to $36 billion in excess costs nationally every year.

With the federal government reform efforts temporarily stalled, hospitals can continue this “340B markup”, and self-funded plan sponsors are once again left holding the bill. To help employers understand exactly how much this is costing their specific plan, the National Alliance of Healthcare Purchaser Coalitions recently launched a 340B Employer Cost Impact Calculator that lets self-funded employers plug in their own plan data and see exactly how much 340B is costing them specifically.

How to help your client:

• Monitor how HHS modifies the 340B Rebate Model Pilot Program to anticipate how future reforms may impact drug costs in your clients’ plans
• Encourage your client to utilize the 340B Employer Cost Impact Calculator to identify exactly how much the 340B program is costing their specific plan

State boards setting price caps, federal laws demanding PBM transparency, and the court’s determination of whether reforms ever reach your client’s plans at all continues to shape the drug pricing landscape in 2026. Benefit consultants who proactively monitor PDAB activity, demand PBM accountability, and guide their clients through the financial and legal implications of these changes will deliver the most value in this environment. The complexity is not going away, but with the right guidance, your clients may turn this uncertainty into an opportunity to build a smarter, more sustainable pharmacy strategy for their workforce.