Straight to the Source: What Direct Drug Models Mean for Employer Plan Sponsors in 2026

Alternative prescription drug access models—including direct-to-employer (DTE) and direct-to-consumer (DTC)—are gaining traction as employers reassess traditional pharmacy benefit manager (PBM)-based pricing structures. As these models expand, plan sponsors must evaluate their impact on plan design, fiduciary oversight, data transparency, and PBM contracting.

For decades, employer-sponsored group health plans have relied on PBMs to manage prescription drug access and pricing. That model remains firmly in place in 2026, but it is increasingly being supplemented by alternative pathways that change how certain drugs are purchased, priced, and delivered. These emerging models, including DTE, DTC, and government-backed pricing initiatives, are not replacing PBMs, but they are creating parallel channels that challenge long-standing assumptions about how drugs are purchased and delivered. For plan sponsors, understanding and evaluating these options within ERISA’s legal framework has become a key aspect of fiduciary responsibility.

A SHIFT TOWARD DIRECT ENGAGEMENT

Manufacturers such as Eli Lilly and Novo Nordisk have introduced DTE purchasing arrangements for select high-cost drugs, particularly GLP-1 therapies. These arrangements are intended to focus on a narrow set of high-cost drugs and offer simpler, more transparent pricing, clearer terms, and defined clinical rules.

For employers, the primary appeal is not to disrupt the core PBM relationship but to evaluate alternative pricing structures for medications that have historically been difficult to cover due to cost volatility and complex rebate dynamics. DTE models provide a valuable opportunity to test fixed-cost options for specific high-impact drugs.

DIRECT-TO-CONSUMER ACCESS AND ITS IMPLICATIONS

At the same time, DTC drug access has expanded meaningfully through manufacturer programs, digital health platforms, and cash-pay or subscription models. These pathways allow individuals to obtain certain medications, often those an employer’s plan may exclude or restrict, like GLP-1s for weight loss, without navigating the plan’s formularies or PBM networks.

For plan sponsors, DTC models create a parallel access channel that operates outside the plan design, financial structure, and oversight. This does not diminish the value of employer-sponsored coverage, but it does alter employee expectations around access, transparency, and affordability. As these models become more common, key considerations for sponsors include the following:

• Communication: Clearly distinguishing between covered plan benefits and consumer-driven options
• Data Gaps: Off-plan usage creates a blind spot, resulting in the loss of data crucial for care management, safety checks, and outcomes tracking
• Perception: How DTC access influences employee perceptions of the plan’s adequacy and value

REGULATORY LANDSCAPE AND PUBLIC POLICY PRESSURE

Policy developments are also contributing to the sense that the ground is shifting under pharmacy benefits. Initiatives aimed at price transparency, such as TrumpRx and PBM reform, may not directly change how employer-sponsored plans operate, but they signal a broader regulatory and political focus on drug pricing and transparency. Policymakers and regulators are paying closer attention to whether traditional rebate-driven pricing structures effectively serve participants and beneficiaries.

For plan sponsors, the implications are largely indirect but significant:

• Increased likelihood of additional reporting and disclosure requirements
• Greater scrutiny of fiduciary decision-making processes
• A heightened need to justify coverage decisions and cost-management strategies to a more informed employee population

ERISA FIDUCIARY OVERSIGHT IN A CHANGING MARKET

From an ERISA perspective, the rise of these direct drug access models does not change the fundamental duties of plan fiduciaries, but it does change the context in which those duties are assessed. Plan sponsors remain responsible for acting prudently and solely in the best interest of participants, which increasingly includes an understanding of available pricing and access alternatives.

Traditional PBM arrangements have long relied on rebate-driven economics, often with limited transparency into true net cost. As more visible fixed-price and manufacturer-direct options merge, fiduciary focus naturally shifts toward process.

Fiduciary risk is now driven less by the specific model chosen and more by whether the decision-making process:

• Includes periodic reviews of pharmacy strategies
• Demonstrates an understanding of the clinical and financial trade-offs of all available options
• Is thoroughly documented to show a reasoned rationale for coverage and vendor decisions

PBM CONTRACTS AND EXCLUSIVITY CONSTRAINTS

Exploring these new models often intersects with PBM contract terms, particularly exclusivity provisions that require plans to route pharmacy utilization through defined channels. As employers explore carve-outs or alternative purchasing arrangements, contractual constraints may limit flexibility or introduce financial tradeoffs tied to rebates and guarantees.

Rather than signaling the end of PBM relationships, these developments increase the importance of contract negotiation. Employers may find value in reassessing exclusivity terms, specialty pharmacy requirements, accumulator/maximizer program policies, performance guarantees, data-sharing obligations, audit rights, and amendment provisions to ensure that plan design can adapt as the market continues to evolve.

CONCLUSION: GOVERNANCE IS KEY

The pharmacy benefits ecosystem emerging in 2026 is not defined by a single dominant model. Instead, it reflects a layered structure where traditional PBM arrangements can coexist with new, alternative pathways. For plan sponsors, success in this new environment depends on proactive governance. The most resilient strategies will likely be those grounded in informed oversight, contractual clarity, and clear communication with participants about what the plan does and does not cover. By understanding these evolving options, plan sponsors can make more prudent, defensible decisions that best serve their plan and its members.