Rx market disruption: RxDC data is even more important for employers 

The Trump Administration’s efforts to lower prescription drug prices, encourage direct-to-consumer drug programs and plans to impose 100% tariffs on brand name drugs imported to the US, coupled with state legislation aimed at lowering drug prices, is disrupting the pharmacy market. We’ve seen industry stakeholders move quickly to adapt business models and protect revenue streams. As the market shifts, it will become even harder for employer plan sponsors to effectively manage their prescription drug plans and vendors if they don’t have a clear understanding of drug pricing and PBM revenue. The best starting point for obtaining that understanding is through Prescription Drug Data Collection at the plan level.

What is RxDC reporting?

RxDC is a prescription drug reporting mandate, adopted as part of the 2021 Consolidated Appropriations Act, requiring group health plans to report a wide range of health plan financial data points in both medical and pharmacy plans as well as from certain “point solutions” such as fertility and wellness providers.

RxDC provides two options for employer filing. The first is on an aggregated basis with vendors — pharmacy benefit manager, medical carrier, third-party administrator — filing on behalf of all their plans together. The second option is at the plan level, which requires the plan sponsor to work with vendors and submit the data themselves. It isn’t necessary to make the entire submission at the plan level – employers can continue to rely on their vendors’ aggregate medical benefit submissions but submit pharmacy files at the plan level to gain access to critical financial prescription drug data.

Why is plan level reporting so important?

The main advantage of the plan-level filing is that plan sponsors see previously undisclosed data such as certain PBM “spread” (profit) on their specific plan(s) for that filing year as well as other retained income items from the PBM and drug level rebates for the top 25 drugs. Items like spread were not previously released as PBMs considered that proprietary. That information is not typically provided to employers using aggregated filing.

Simply stated, RxDC plan level reporting is the only current way to see certain prescription drug data.

Access to this data has become much more important for at least three reasons.

• Scrutiny of the traditional PBM model, including some fiduciary lawsuits against employers regarding PBM management, has employers wanting to dive deeper. While more work is required to file at the plan level, some have decided it was worth the effort as an exercise to support their fiduciary duties under the Employee Retirement Income Security Act.
• Some PBMs are offering new models that de-emphasize spread in lieu of flat fees. The employer cannot assess the true value of these new models if key PBM revenue data is unknown.
• State-based legislation has dramatically increased in the last three to four years. If employers do not have the previously unreleased pharmacy data, they cannot accurately determine the legislation’s impact. For example, some state legislation bans spread pricing, but employers cannot assess the financial impact if spread totals are unknown.

The percentage of employers filing at the plan level has increased over the years and will likely continue. We’ve helped employers uncover valuable cost insights from their plan level data. We have seen instances where some key metrics like spread have been higher than expected. There is added value in filing at the plan level year after year, so changes in the data can also be evaluated.  Employers have used results in several ways. Some employers had rebates retained by their PBM at levels higher than allowed contractually. These employers have taken the information to their PBM requesting explanation and a refund of overage. Many employers who were already conducting an RFP have inserted new contractual requirements of the winning bidder to address issues uncovered by the RxDC filing.

Plan level filers need to start early

The value of plan level data does come with an increased administrative burden, so we suggest starting early to meet the June 1, 2026, reporting deadline. Plan sponsors should begin to work on their reporting strategy now, starting with identifying all vendors with required data, confirming the reporting entities for every data file, and responding to all vendor surveys by the specified deadline. CMS did not change the RxDC process in 2025. While we don’t expect any major changes for 2026, keep an eye out for updated instructions (last updated in January 2025 for the 2024 reference year), regulations or other guidance that may require changes.

Room for improvement

While RxDC has great information, there are additional items that hopefully will be added to required reporting in the future. For instance, Group Purchasing Organizations are used by a wide range of PBMs to negotiate rebates. Generally, rebates have gone up but like other financial details the full picture is unclear. Requiring even more disclosure will allow employers to make the most informed decisions.

One or more proposals on transparency may make their way into a legislative package in Congress, this year or next. And additional transparency into PBMs and prescription drugs is expected from the Trump Administration:

• The DOL is expected to propose rules later this year to improve employer health plan transparency into the direct and indirect compensation received by PBMs, as instructed by the President in Executive Order 14273.
• The departments rescinded their enforcement delay of the TiC rule’s prescription drug machine readable file requirement in 2023. In June 2025, regulators sought input on revising the Rx MRF requirements. Proposed TiC regulations may provide Rx MRF implementation guidance as soon as 2025.

The bottom line is that while RxDC is not perfect it’s the only sure way for employers to get critical prescription drug data today.