A new CMS rule to force drug price transparency is poised to reshape the pharmaceutical and healthcare landscape. With regulators signaling stricter enforcement and a growing push to expose net drug prices—long shielded by PBMs as trade secrets—market access and commercialization leaders face a pivotal moment.

This evolving policy direction is not just about compliance. It marks a broader shift toward market correction through transparency. As the government doubles down on exposing true drug transaction costs, manufacturers, payers, and intermediaries alike will need to rethink pricing strategies, rebate structures, and evidence generation.

This article explores what the upcoming changes mean with practical insights on how to prepare for a more transparent and competitive market environment.

Key Insights

• The rule would mandate disclosure of net drug prices (post-rebate costs), which pharmacy benefit managers (PBMs) currently treat as trade secrets.
• It signals a shift toward stricter enforcement. Compliance with existing price transparency rules remains low, with only 21% of hospitals fully compliant as of 2025.
• Oz challenged PBMs to voluntarily reform rebate practices. Experts expressed skepticism due to profit implications.

Background Context

These developments align with President Trump’s February 2025 Executive Order (EO 14221). The order directs agencies to strengthen healthcare price transparency. Existing regulations include:

1. Hospital Price Transparency Rule (2021): Requires hospitals to publish payer-specific rates.
2. Insurer Transparency Rule (2022): Mandates disclosure of negotiated rates and out-of-network costs.
3. May 2025 Updates: CMS now requires hospitals to list actual dollar amounts (not estimates). It plans to standardize insurer data formats by October 2025.

These efforts aim to “foster a more competitive, affordable healthcare system,” according to the HHS, Labor, and Treasury departments.

Implications for Health Economics

1. Research Opportunities: Transparent net prices would enable analyses of rebate impacts on patient costs and PBM pricing power.
2. Market Effects: Forcing price disclosure could increase competition. However, it may reduce manufacturer rebates if competitors’ concessions become public.
3. Enforcement Challenges: Historically, PBM lawsuits blocked similar measures. For example, 2021 litigation scuttled net price disclosure.
4. HEOR Applications: Researchers could use disclosed data to model drug affordability impacts. They could also evaluate value-based payment reforms.

CMS’s evolving approach reflects a broader policy shift. It aims to use drug price transparency as a market-correction tool. However, evidence of its effect on drug pricing remains limited. For more information on this topic and the potential upcoming rule, read more here.