The federal government funding bill signed into law last week was a watershed moment for the pharmacy benefit manager industry, and significant new enforcement and litigation will likely follow as a regulatory vacuum begins to fill in, according to legal experts.

The Consolidated Appropriations Act of 2026, which temporarily funds large swaths of the federal government and headed off a shutdown, also dismantles key features of the PBM business model.

Signed into law on Feb. 3, the act creates a new regulatory landscape for pharmacy benefit managers operating in both federal and commercial sectors. Many of the reforms were designed to shift the industry from a rebate-driven model often criticized as opaque to one focused on fee and cost transparency, according to health and drug industry experts.

These legislative changes are occurring alongside a landmark $7 billion settlement by Cigna's Express Scripts subsidiary that overhauls the PBM's business model and resolves Federal Trade Commission allegations that it inflated insulin prices through "convoluted rebate games."

The legislation also provides federal agencies and regulators with new enforcement teeth, although many core provisions of the act do not take effect until 2028 or 2029.

Jonathan L. Swichar, chair of the pharmacy litigation group Duane Morris LLP, told Law360 the act "provides increased investigative and enforcement powers to the HHS OIG to ensure that PBMs comply with the Act."

"Very likely, HHS will increase the implementation of civil monetary penalties against PBMs for noncompliance," said Swichar, who frequently represents independent pharmacies and healthcare providers.

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