3 Executive Orders Reshape the PBM Regulatory Reality in Just Four Months

Between February and May of this year, three executive orders (EOs) fundamentally changed the regulatory reality for pharmacy benefit management (PBM) platforms.

While those weren’t the EOs grabbing the biggest headlines, they were still likely keeping you up at night. These mandates moved the needle far beyond the point of merely achieving incremental compliance updates.

Overcoming regulatory scrutiny now demands platform modernization for PBMs to deliver on transparency while meeting compliance and consumer expectations.

Is your platform ready?

The 90-Day Regulatory Blitz

February 25: Transparency Infrastructure Becomes Table Stakes

Late February kicked off the EO wave with the "Making America Healthy Again" order that established the new enforcement standards for healthcare price transparency. For PBM platforms, this translates to actual prices in machine-readable files with monthly updates.

Federal agencies issued comprehensive guidance on May 22 detailing what is required for healthcare price transparency. The new order requires standardized pricing data formats and real-time compliance monitoring.

This shift places PBMs under direct scrutiny, accelerating the demand for real-time reporting and fully integrated data to stay compliant.

Your platform reality check:
PBMs need platform-level transparency to administer pharmacy benefits for health plans under these new regulations. If generating quarterly reports takes hours because your data is spread across disconnected systems, it’s clear you won’t meet real-time transparency requirements.

April 15: What Makes a "Middleman"

While it took nearly 50 more days for another PBM-related EO to be issued, when the next one came, it hit hard. Executive Order 14273, called "Lowering Drug Prices by Once Again Putting Americans First" was announced on April 15 and set two critical deadlines:

• By July 14, 2025, federal agencies must review the role PBMs play in the drug supply chain with a focus on transparency around all forms of PBM compensation and provide recommendations for a "more competitive, efficient, transparent, and resilient pharmaceutical value chain".
• By October 12, 2025, the Department of Labor must propose new ERISA-based rules that require detailed disclosures of all direct and indirect PBM compensation arrangements.

The order goes far beyond any kind of regulatory fine-tuning or incremental change. It has put PBMs under direct federal scrutiny, directly challenged the rebate-retention model that has defined many PBMs for decades, and called for a fundamental reevaluation of PBMs role within the drug supply chain.

Your platform reality check:
PBM platforms will need comprehensive compensation tracking and automated audit trails to meet the October ERISA disclosure requirements. Siloed systems that force your compliance team to reconstruct audit trails won’t be able to deliver the granular documentation demanded by these regulations.

May 12: Direct-to-Consumer Bypass

Not long on the heels of the April 15th order came one on May 12th, focused on most-favored-nation pricing. It sought to peg U.S. drug costs to the lowest prices in other developed nations and establish direct-to-consumer purchasing mechanisms from manufacturers at the international benchmark prices. While details were scarce and authority for parts of the EO were debated, the regulatory momentum was clear in its focus on lowering the costs of pharmaceuticals.

To prevent consumers from bypassing traditional PBM distribution entirely, platform leaders must rethink their architecture to support new pricing models, integrate with manufacturer systems, and handle direct-to-consumer transactions without compromising regulatory compliance.

Your platform reality check:
PBM platforms need real-time pricing integration and direct-sale capabilities to compete with manufacturer bypass programs. Your system can’t treat pricing transparency as an afterthought and still require regular manual intervention. Consumers expect a dynamic and intuitive digital experience, regardless of the outcome of this EO.

Why This Time Is Different

Regulatory scrutiny isn’t new for PBMs, but the current wave of executive orders is fundamentally different from any past pressures.

Previous efforts often lacked enforcement teeth or were limited in scope. The EOs over the last few months featured explicit deadlines, aggressive timelines, and comprehensive directives that span both federal and state regulators.

Compliance now is going to require far more than simply checking off some boxes on a form.

It’s also crucial to note that the orders are interconnected and create a cumulative effect that leaves no part of the PBM business model untouched. Transparency demands are colliding with business model reevaluations, all while technology platforms built on legacy systems strain under the weight of new requirements.

The Platform Stakes

The message to PBMs is clear: compliance alone won’t cut it. Not if you want to be a market leader.

These orders have exposed the limitations of legacy systems. Earlier regulations allowed for manual workarounds and batch processing. But legacy platforms that require 15-minute test cycles won’t support the real-time decision-making mandates ahead.

The market and regulations demand and will reward platforms built for real-time data processing, seamless integrations, automated compliance monitoring, and instant audit capabilities. This creates opportunities for platforms that have these elements as their core capabilities and easily deliver transparency by design.

Platforms that cannot provide easily accessible, audit-ready documentation, insight into dynamic pricing data, and a user-friendly experience will struggle to move beyond simply reacting to the changes around them.

The Platform Modernization Imperative

Praxent works with PBM technology leaders to deliver platforms that thrive in this new environment. We've already built multiple transparent-ready platforms and value-based pricing systems for clients facing these exact regulatory demands.

With this extensive hands-on experience, our team knows how to modernize legacy systems, create seamless data integration, and deliver transparent, secure, and user-friendly solutions that position PBMs as market leaders.

These three EOs didn’t create the current platform modernization imperative, but their regulatory timeline absolutely forced it to the forefront.

It’s been easy to postpone platform investment decisions when incremental changes were required. But legacy systems that struggle with simple reporting tasks are no match for supporting these real-time transparency mandates.

This regulatory transformation period will prove who can thrive in the new environment. Platforms with built-in compliance, transparency, and seamless data integration are the ones that will succeed.

Market-leading PBM platforms will emerge because they can turn compliance requirements into competitive advantages. Your choice is no longer whether you should modernize your platform. The EOs and regulatory timeline have already made that choice for you.

The question is when. Ready to get started?