October 2026
Three developments this month deserve every workers’ compensation pharmacy professional’s attention. Washington is poised to finalize the most consequential federal PBM transparency proposal in decades – and although it is an ERISA rule, comp payers will feel it.
Either way, a divestiture clock is ticking in Tennessee, with federal courts debating whether a state can tell a PBM it can’t own a drugstore. Colorado is the latest to target compounds and topicals with its cost schedule. Plus, before you go, short remarks on Ohio, New York and Texas.
Federal PBM Fee Disclosure Rule Crosses the Finish Line
The Department of Labor in January proposed a first-of-its-kind rule to require PBMs serving self-insured and level-funded group health plans to disclose their fees and compensation under ERISA’s service-provider rules — manufacturer rebates, spread compensation when the plan’s price is higher than what the pharmacy was paid, and amounts recouped from pharmacies, with audit rights for plan fiduciaries.
The White House budget office finished its evaluation of the final regulation in October, so publication is likely. A bipartisan coalition of 45 state attorneys general supported the plan; when attorneys general of both parties agree on anything related to medication prices, pay heed.
Workers’ comp is not an ERISA plan, and this rule will not apply directly to comp programs. It still matters for two reasons.
- First, the vocabulary shifts. Once a risk manager sees a line-item disclosure of PBM remuneration on the group health side of the house, the question “why can’t I see the same thing on my comp program?” becomes self-evident. That rule will establish the de facto standard of transparency by which all PBM contracts will be judged in the upcoming renewal cycle.
- Second, the rule is the last element of a federal one-two punch: the Consolidated Appropriations Act of 2026 previously delinked Part D compensation from prescription pricing and imposed rebate pass-through, and this rule now operationalizes disclosure for the employer market. The transparent-PBM paradigm is no longer a pipe dream; it is becoming the default regulatory option.
The PBMs who are ahead of the curve — with stated admin fees, auditable pricing and plain-English contracts — will have a marketing edge at the very time their group health affiliates are being pulled in that direction by legislation. As I have consistently advocated, PBMs play a valuable and important role in our healthcare system; we just need to adjust our pricing model to reflect what the market demands (transparency).
Can a State Tell a PBM What It Can Own? The Eighth Circuit Will Tell Us.
On September 22, the Eighth Circuit heard oral argument on Arkansas’s appeal of the injunction against Act 624, the first-in-the-nation statute prohibiting PBM ownership and operation of pharmacies. In July 2025, the district judge stayed the statute, ruling it likely violates the dormant Commerce Clause and is preempted by TRICARE. A ruling is likely in the coming months and will be the biggest PBM decision since Rutledge.
The stakes are much larger than Arkansas. Tennessee’s FAIR Rx Act mandates that PBMs sell off their pharmacies by January 1, 2027, a deadline now around sixty days away. A dozen legislatures are awaiting the appeal before choosing whether to adopt their own structural-separation measures in 2027. If the Eighth Circuit upholds the injunction, the structural-separation movement heads to Congress and subtler state instruments like affiliate pricing parity. Expect a swell if it comes back up. For workers’ comp payers, the practical concern is the same under either outcome: identify which of your pharmacy, bill review, and PBM contractors are under common ownership, since affiliate connections are about to be exposed—and negotiable —whether by statute or by disclosure rule.
Colorado Enters the Picture on Topical and Compound Crackdown
Colorado’s Division of Workers’ Compensation is moving forward with changes to its Rule 18 fee schedule that will increase the reimbursement cap on all non-sterile compounded medications — payable only when there is no suitable FDA-approved, commercially available alternative — and will strengthen preauthorization for combination topical agents, patches and similar products whenever there is a lower-cost, therapeutically equivalent prescription or over-the-counter alternative available on the shelf. If you read this column, you know the pattern: Texas has audited topical prescriptions, Arizona has re-anchored topical reimbursement to purchase cost, Mississippi restored its $30 cap on manufactured topicals, and California has topical legislation in progress. But Colorado’s addition is the prior-authorization perspective: instead of arguing over the price of a $1,700 tube after it’s dispensed, the law asks the obvious question beforehand: why this product when a $16 counterpart exists? That is the correct order and should be followed by other states.
Bonus Ohio, New York and Texas
Three quick hits:
- Ohio: the Bureau of Workers’ Compensation proposed its next round of updates to the outpatient medication formulary and first-fill list in early October, with additions, removals, and coverage changes across both; comments closed October 20. The formulary binds state-fund claims, and self-insuring employers may adopt it voluntarily — worth a look if Ohio is in your book, because the BWC now refreshes it roughly twice a year. A sensible consolidation worth a comment letter if Ohio is in your book.
- New York: Pharmacy-choice legislation remains a live issue after Governor Hochul vetoed similar measures in 2024 and 2025. A new proposal seeks to address those objections by codifying existing pharmacy-access protections while preserving regulatory flexibility. Its current legislative status and prospects for enactment warrant watching.
- Texas: The DWC’s topical analgesic audit has progressed to fieldwork with the comment window closed; if your Texas book is showing elevated topical utilization, your documentation should already be in order – the findings will inform reimbursement criteria for the category.
Visibility is the through-line this month. A federal rule is on the way that will make PBM compensation accessible to employers. A federal court is weighing whether states can make PBM ownership structures not only visible, but illegal. States continue to make the cost of uncontrolled medication categories visible, one charge schedule at a time. No matter what the Eighth Circuit says, the direction of travel is the same: the period when any portion of pharmacy pricing could stay hidden is ending, and the first payers and PBMs to get comfortable working in the light of day will be glad they did.
Dennis M. Sponer, J.D., LL.M., MBA, is the founder of SRX Advisors, a regulatory intelligence and consulting firm that helps PBMs and payers control pharmacy costs in workers’ compensation. He is Of Counsel to Goldsand Friedberg, a healthcare law firm with offices in Washington, D.C., and Miami. Sponer founded and led two PBMs, including ScripNet, a PBM focused exclusively on workers’ compensation pharmacy costs nationwide. In September, he participated in workers’ compensation pharmacy sessions with Optum colleagues at the Elevate Work Comp Conference in San Diego and National Comp in Las Vegas. Together with attorney Cliff Goldstein, he works to control out-of-network pharmacy costs by attacking unreasonable and unnecessary pharmacy bills for workers’ compensation payors.
