The Consolidated Appropriations Act (CAA) enacted the most significant pharmacy benefit manager (PBM) transparency and accountability reforms in the industry’s history, creating a comprehensive federal framework that gives employers unprecedented insight into their pharmacy coverage. PBMs have also made significant reforms over the past several years to their business models. Those changes in combination with the CAA effectively settled any debate – the PBMs of today are not the PBMs of yesterday.

That’s why the Department of Labor’s pending PBM regulation is duplicative, unnecessary, and puts that progress at risk. Smaller PBMs are sounding the alarm — and they’re right to.

The DOL rule piles on excessive, costly disclosure requirements that give employers and patients nothing they don’t already have. Worse, it does real damage: 

• It buries mid-market PBMs in compliance costs — costs the largest players can absorb and smaller competitors can’t, choking off the growth and competition the market needs.
• Its aggressive timeline locks in the status quo — squeezing out the very challengers positioned to disrupt it.
• It ignores the CAA entirely — layering new mandates on top of requirements Congress already put in place, undercutting the law that lawmakers actually passed.

Mid-market PBMs said as much directly to DOL. In comments submitted to the agency, they warned the rule would drive up compliance costs, pull resources away from growth and innovation, and tilt the playing field further toward the largest incumbents — the opposite of what competition policy should do.

Mid-market PBMs, including ProAct, quantified the time and expense complying with the rule would require:

“While just estimates, if the rule is finalized as written, our team has provided me estimates that this could cost the company upwards of a million dollars… These costs could take up a meaningful share of our net operating margin and make it harder for us to hire, grow and continue to service our clients.”

Navitus underscored the negative impact the rule could have on innovation and competition in the PBM market:

“The complexity of this rule, coupled with evolving requirements, will significantly increase operational, technical, and administrative demand. Smaller PBMs do not have the economies of scale to spread these costs across large member populations or absorb them and remain competitive on an administrative cost basis. As a result, the proposal could have a chilling effect on market entry and expansion, discouraging innovation and inadvertently reducing competition.”

Mid-market PBMs also emphasized that the timeline in the proposed rule is too aggressive for them to deliver accurate, meaningful data. Welldyne encouraged DOL to consider a more realistic timeline that matches the CAA:

“Generating data for a specific client request is very different from building standardized reporting systems capable of meeting federal regulatory requirements… These changes require substantial engineering, testing, and legal review—particularly for companies that must integrate data across pharmacy claims systems, rebate arrangements, and client-specific contract structure.”

RxBenefits pointed out the impact that the proposed rule will have not only on PBMs but on the small businesses they serve:

“This means it will be necessary for these small businesses to engage outside consultants to review the disclosure and help limit any fiduciary risk associated with interpreting whether the compensation figures are reasonable… small business clients are sure to see increased costs in the form of increased consulting fees.”

Script Care made it clear that mid-market companies support transparency, but regulations must work for all competitors:

“The proposed rule would disproportionately burden mid-market PBMs relative to the largest market participants, while delivering limited additional transparency benefits to the small and mid-size employer group plan sponsors that depend on mid-market PBMs as a viable alternative… We support transparency that works for all market participants and that preserves the mid-market PBM’s ability to compete and to continue serving the small to mid-size employers that value choice in their PBM partner.”

If finalized as proposed, the DOL rule will do more than add paperwork. It will make it harder for mid-market PBMs to grow, innovate, and compete with bigger PBMs. Less competition means fewer options for employers and higher costs for patients and families. DOL should withdraw the proposed rule and support the affordability agenda that Congress and President Trump have set.