Transparency Is Progress. Better Data Is the Next Step.

On August 31, 2026, the Pennsylvania Insurance Department, under Act 77, the Pharmacy Benefit Reform Act,  released its first Annual PBM Transparency Report. The report provides a look at manufacturer rebates, administrative fees and pharmacy reimbursement practices within Pennsylvania’s fully insured commercial health insurance market.

For independent pharmacies, the report provides useful information—but it also raises important questions about what greater transparency should look like going forward.

Nearly $2 Billion in Manufacturer Rebates

• Six PBMs reported receiving approximately $1.91 billion in manufacturer rebates during 2025.

• According to the report, approximately 97.8% of those rebates—or $1.87 billion—were passed through to health insurer clients 

• Approximately $42.14 million was retained by PBMs.

The Insurance Department cautioned that these extremes may represent isolated arrangements and are not necessarily representative of the broader market.

When weighted by rebate volume, the average percentage retained was approximately 0.74%.

Rebates Aren’t the Entire PBM Revenue Picture

One of the report’s most noteworthy findings involves administrative fees.

In addition to manufacturer rebates, PBMs reported collecting approximately $132 million in manufacturer administrative fees.

A PBM may pass through a very high percentage—or even 100%—of manufacturer rebates while generating revenue through administrative fees or other arrangements.

The Pennsylvania Insurance Department itself acknowledges that additional funding mechanisms may exist that are not captured by this report.

What About PBM-Affiliated Pharmacies?

For independent pharmacy, another finding deserves particular attention.

PBMs that are affiliated with pharmacies reported that their reimbursement strategies for affiliated pharmacies were the same as or comparable to the strategies used for non-affiliated pharmacies.

That is an important statement—but it also highlights the need for continued transparency.

There is a difference between comparing reimbursement strategies and comparing actual reimbursement outcomes.

For independent pharmacies, the next question is clear, but the report does not provide enough information to answer it:

Do actual claim-level reimbursement results demonstrate comparable treatment between PBM-affiliated and independent pharmacies?

Rebates and Formulary Decisions

The report also acknowledges the significant role manufacturer rebates play in the prescription drug marketplace.

The Pennsylvania Insurance Department notes that rebates appear to have a significant impact on drug-chain economics and likely influence insurer decisions regarding formularies and plan benefits.

However, many of the underlying pricing arrangements and decision-making processes remain difficult to see.

Greater reporting may help policymakers, pharmacies, employers and patients better understand how those financial incentives ultimately affect prescription drug access and cost.

Important Limitations of the Report

The report represents progress toward greater transparency, but its scope is limited.

The data applies primarily to Pennsylvania’s fully insured commercial health insurance market. It does not provide a complete picture of PBM activity across self-funded employer plans, Medicare, Medicaid, CHIP, TRICARE and other excluded coverage.

The information is also aggregated, which means the report cannot identify individual PBMs, insurers, drugs or specific contractual arrangements.

But transparency is most valuable when it allows stakeholders to understand what is actually happening throughout the prescription drug supply chain.

For independent pharmacy, that means continuing to ask important questions about reimbursement, administrative fees, pharmacy affiliations, formulary incentives and whether reported policies translate into equitable outcomes at the pharmacy counter.

United Pharmacy Network will continue monitoring PBM reform, reimbursement developments and regulatory changes that could affect independent pharmacies. 

Read the full report here

Transparency is improving. The full picture still matters.