When the Trump administration signed the most sweeping pharmacy benefit manager reform in a generation into law on February 3, 2026, supporters framed it as a careful, phased modernization of how the drug-pricing middlemen report their dealings. Less than eight months later, an independent writer argues in American Thinker that the Department of Labor is poised to smother that law with a parallel set of rules that arrives far sooner, costs far more, and belongs in a different agency’s hands altogether.
Writing for the outlet, Alex Rosado asks a blunt question: why is the DoL trying to steal the spotlight on PBM reform with an unnecessary new batch of very similar rules? His answer is that the redundancy, not the transparency itself, is the problem.
What the 2026 law actually does
The 2026 Consolidated Appropriations Act expanded transparency reporting requirements for PBMs, gave employers genuine audit rights over compensation, and set new oversight and audit guidelines. The Department of Health and Human Services is the agency tasked with implementing those provisions, which touch drug pricing, rebates, and pharmacy network terms — territory HHS already inhabits. The statute is deliberately slow: its rules do not become effective until on or after January 2029, a phased rollout designed to let fiduciary processes, systems, and deals adapt to the market as employers gain unprecedented, unobstructed access to PBM economics.
Enter the Department of Labor. According to Rosado, the DoL released a proposed rule requiring PBMs and their partners to reveal hidden fees and payment details to managers of self-insured ERISA group health plans. Transparency, in theory, sounds like an unqualified good for business. But the DoL’s version closed its public comment period in mid-April and had its disclosure obligations kick into effect on July 1 — years ahead of anything the CAA delivers.
That timing gap is the crux of the complaint. Complying with the DoL rule on top of the CAA’s requirements, Rosado writes, will burden small- to mid-market PBMs, their clients, and unions. Compliance is not cheap. These groups will have to hire teams just to collate data and fill out forms, and they have warned that the differing data elements, certifications, and other obligations will force them to build multiple compliance infrastructures when they could focus on one.
The cost math, and who pays it
The government’s own analysis puts new adherence costs for smaller players at $1 million in the first year alone — a figure PBMs themselves call a massive underestimate. That is money that could otherwise go toward service improvements and contract leverage, Rosado notes. Mid-market PBMs are now scolding the DoL for freezing out new entrants and reinforcing a climate in which incumbents and large entities prosper.
That outcome runs directly against what federal lawmakers have been building. As more U.S. corporations steer business toward smaller PBMs, the CAA strikes a delicate balance: employers get clear access to PBM economics, while the underlying processes and deals are left room to breathe. The DoL’s rule, in this telling, drops ERISA-specific fiduciary overlays onto the market and demands compensation reviews years before anything substantial from the CAA materializes. The downstream effects are more consultant bills, administrative friction, legal exposure, and expenses that ultimately surface as higher plan prices for consumers.
The 401(k) precedent cuts both ways
The DoL’s 2026 proposal is modeled on its July 2012 ERISA fee-disclosure regime for 401(k) plans, which required covered service providers to disclose direct or indirect compensation and to state whether any participant acts as an ERISA fiduciary. The department smoothed over initial unease with regulatory analysis projecting 54 million hours of saved time valued at roughly $2 billion, and post-implementation studies found that 401(k) fees generally decreased after 2012, with small plans benefiting most.
But the 2012 rule also established the aggressive timeline the 2026 rule would emulate: first annual disclosures due by late August, first quarterly statements by mid-November. DoL’s earlier numbers estimated that crunch would yield $425 million in first-year compliance costs and at least 1.5 million hours of burden from data consolidation, website updates, and postage.
Rosado concedes the department proved it can handle fiduciary decision-making, if hastily and expensively. His objection is institutional, not personal: the 2012 rule governed retirement fees, not prescription prices, and a one-to-one policy transplant is far easier said than done given all the moving parts involved.
The case for letting HHS run the show
HHS, by contrast, has health care markets as its core mission. Its CAA provisions touch the exact sectors where it is already deepening its footprint. In mid-June, the Centers for Medicare and Medicaid Services announced it would codify the use of PBM-negotiated rebate inputs in calculating maximum fair prices under the Medicare Drug Price Negotiation Program. The CAA supplements that work by formalizing HHS as the central repository for PBM operations.
The department also manages the Prescription Drug Data Collection, established in 2021 to track shifts toward higher deductibles, out-of-pocket maximums, and alternatives to flat copays. Folding PBM disclosures into that existing structure and its benefit-design datasets, Rosado argues, would fill a missing piece of the puzzle and produce a more flexible policy that responds to industry trends rather than fighting them.
His prescription is narrow. PBM reform, he writes, should champion employers, patients, and taxpayers, and it still can — if the DoL rescinds its proposal, substantially realigns it to fit the CAA’s scope, or simply lets HHS take the lead. In its current form, he concludes, duplicative and extra regulation serves no greater purpose; it stifles the competition and choice that boost small businesses and plans. The Executive Branch, in his view, needs to get on the same page before doling out the paperwork.
Source: www.americanthinker.com — https://www.americanthinker.com/articles/2026/09/why-is-the-department-of-labor-undersutting-pbm-reform/