Legal Ease: Key Legislative & Regulatory Updates Impacting Plan Sponsors in 2026

The pace of change in pharmacy policy isn’t slowing. It’s rapidly accelerating.

From Washington, D.C., to state capitals to the courts, fresh decisions are shaping how health plans and plan sponsors will manage costs, access and clinical outcomes for years to come. Keeping up isn’t merely a compliance exercise. It’s a business imperative. 

The Navitus Health Solutions Government Relations team recently hosted a Legal Ease webinar to examine the evolving regulatory, legislative and legal environment shaping pharmacy benefits. The takeaway? The next 24 to 36 months will bring meaningful disruption. Those who stay informed and act early will be better able to manage it. 

Federal policy: Transparency advances, but complexity remains

At the federal level, pressure on the pharmacy benefit management (PBM) industry continues to build. On February 3, President Trump signed into law the Consolidated Appropriations Act of 2026 (CAA), establishing meaningful changes for how PBMs interact with clients, consultants and regulators.

What’s changing most immediately is transparency and oversight, including:

• Expanded reporting on rebates, pharmacy reimbursement and PBM compensation 
• New visibility into payments to brokers and consultants 
• Shifts in how PBMs are compensated in Medicare 

Prior to enactment of the CAA, the U.S. Department of Labor proposed the Pharmacy Benefit Manager Fee Disclosure Rule in response to Executive Order 14273. This rule would require PBMs to report rebates and compensation received from pharmaceutical manufacturers, spread, description of services, price protection arrangements and more, semiannually to self-funded plan sponsors.

Further, the rule provides audit rights to plan sponsors. Although this sounds similar to the CAA, the implementation dates for the rule are vastly different. The rule, once finalized, could become effective in 2026, while much of the CAA becomes effective in 2028. Further, the CAA applies to commercial insurance, regardless of whether self-funded, as well as to Medicare.

Beyond implementing transparency provisions, policymakers are accelerating efforts to modernize prior authorization, with a clear push toward electronic workflows and faster turnaround times. In the longer term, the move toward real-time decisions will fundamentally change utilization management.

Litigation: Why ERISA Still Matters

Behind the policy headlines, litigation is quietly shaping the operating environment for plans and plan sponsors, particularly those that are self-funded. 

Recent court decisions have reinforced a critical boundary. States may regulate elements such as pharmacy reimbursement. But employer plan design, including networks and benefit structures, remains protected under the Employee Retirement Income Security Act (ERISA).

That distinction helps preserve consistency across multistate plans and maintain the ability to actively manage benefits. But the volume of state action means more testing of this line. Expect ongoing legal challenges and incremental shifts in rule interpretation.

In the states: Where change is happening fastest

If there’s one area demanding immediate attention, it’s at the state level. Legislative activity is expanding rapidly, with proposals that directly impact plan design, cost management and network strategy. While many proposals are well-intentioned, they often carry unintended costs and consequences.

Trends to watch include expanding pharmacy network requirements and “any willing provider” legislation, which is gaining traction in more than half of the states. While positioned as expanding choice, these proposals can limit network flexibility, prohibit or limit activity to drive patients to lower-cost pharmacies and increase overall plan expenses.

Increasingly, states are mandating minimum pharmacy reimbursement rates, typically tied to the National Average Drug Acquisition Cost, plus a dispensing fee. This can cause higher plan costs, increased member cost-sharing and the need to revisit pharmacy contracts as well as pricing assumptions and performance guarantees.

Legislation targeting PBM-owned pharmacies is emerging in multiple states as well. While framed around competition and fairness, these laws may disrupt pharmacy access models, limit delivery options (including specialty and mail order) and increase costs if they reduce competition.

In addition, states are stepping more directly into formulary design and rebate policy. These proposals can have a significant impact, particularly if they slow the adoption of generics and biosimilars or limit the ability to move to lowest-net-cost options.

Finally, prior authorization remains a focus, with nearly every state considering changes. A newer element is the regulation of artificial intelligence in clinical decisions, often requiring human review of denials. While the federal government encourages innovation, states are moving more cautiously. This could create a patchwork environment for plans to navigate.

Amid all that change, it’s important to note that challenge also brings opportunity. Lawmakers on both sides of the aisle have expressed a desire to address “affordability” in health care. They have formed committees, held public hearings and are looking for ideas to address challenges that consumers and employers experience. Legislators across the country are beginning to look at other participants in the drug chain and how they impact pharmacy options, supplies and costs.

What it all means: Act early and stay engaged

These developments point to a more complex and regulated environment for pharmacy benefits. For plans and plan sponsors, the implications are clear:

• Contracting matters more than ever. Understanding pricing models, guarantees and data access will be critical as traditional structures evolve.
• Clinical strategy is becoming a primary lever. As financial flexibility narrows, outcomes-driven management will play a bigger role in controlling drug trend.
• Engagement is essential. Policy decisions are evolving now. Staying connected to partners, associations and policymakers can make a difference.

Just as important is the need for a PBM partner that can translate policy into action.

The volume and velocity of change aren’t likely to slow. The Navitus Government Relations team will continue to monitor developments closely and share insights. In this environment, clarity isn’t merely helpful. It’s a competitive advantage.

Mark Your Calendar

Our next Legal Ease webinar will be held on December 1, from 1:00 to 2:00 p.m. CST. Registration information will be available closer to the event.