PBM Rebate Aggregators and GPO Fees: Where the Affiliate Enters the Contract

PBM rebate aggregator GPO fees are payments to the affiliated businesses that negotiate manufacturer rebates for pharmacy benefit managers. The manufacturer pays one company, the health plan contracts with another, and the agreement decides which dollars reach the client. If you work with manufacturer contracts, rebate invoices or plan reconciliations, you may see the amount before an affiliate takes its share.

What Does the FTC Say About Pharmacy Benefit Managers?

The Federal Trade Commission describes PBM rebate aggregators as separate affiliates that negotiate manufacturer contracts, including rebates, a job PBMs historically handled directly. Its first interim staff report, published in 2024, distinguishes them from traditional group purchasing organizations that buy drugs and medical supplies for hospitals and other health care providers.

The report identifies the businesses behind the names on those agreements:

For the contract question, the useful connection is which entity negotiates with the manufacturer, which receives the payment and which owes money to the plan.

That distinction also separates the manufacturer contracting affiliate from a dispensing pharmacy. An aggregator negotiates rebates. A mail-order or specialty pharmacy buys and dispenses drugs.

Do Pharmacy Benefit Managers Have a Role in the Prescription Drug Supply Chain?

Pharmacy benefit managers negotiate drug rebates and can pay pharmacy claims on a health plan’s behalf. A rebate aggregator adds another business to the manufacturer side of that financial relationship.

The physical drug and the rebate take different routes. As the Government Accountability Office explains in its report on Part D rebates and patient spending, manufacturers generally sell drugs to wholesalers, which sell them to pharmacies. The pharmacy receives payment from the plan or its PBM and from the patient through cost sharing. Manufacturer rebates generally arrive after the purchase.

A plan’s net drug cost therefore depends on more than the pharmacy claim. The manufacturer payment, any amount retained by an aggregator, the amount reaching the PBM and the amount credited to the plan belong in the same comparison.

What Does 100% Rebate Pass-Through Cover?

When a rebate pass-through contract excludes PBM affiliate fees, it changes which dollars count before any percentage is applied. A pass-through promise depends on the contract’s definition of the money being passed through. The manufacturer agreement and the plan agreement may describe different pools of money.

A public Sandia National Laboratories PBM procurement statement of work shows how specific the language can be. Its rebate definition includes administrative and data fees received from manufacturers or through a contracted intermediary when attributable to the plan’s prescription drug services. It also calls for quarterly rebate reports, annual reconciliation and audit access to the processes used to report to manufacturers, account for rebates and allocate them to Sandia.

Those terms connect the headline promise to the underlying transactions. An administrative fee paid by a manufacturer can sit in a different account from the rebate, yet the contract can still include it in the amount owed to the client. The name of the account is only the start of the inquiry.

For an insider, the relevant comparison is the manufacturer’s payment against the client’s credit, with the fee schedule and service description beside them. Who performed the service? Who received the fee? Did the plan’s definition reach that recipient? We work through those connections with you.

What the Ascent Audit Found

The Office of Personnel Management’s inspector general found that Express Scripts had failed to pass through all manufacturer rebates collected by Ascent for Compass Rose Health Plan. Its November 2024 audit traced a $9,524,945 rebate underpayment for June 2019 through December 2021, after accounting for payments Express Scripts had already made toward its contractual minimum.

The auditors compared manufacturer agreements with the rebates the carrier actually received. They found that Express Scripts and Ascent had agreed internally to lower rebate percentages, allowing Ascent to keep the difference. In the auditors’ account, the PBM’s arrangement with its own affiliate left the federal plan short. The auditors went back to the manufacturer’s agreement.

The federal contract reached beyond the PBM. It required the PBM or any other entity negotiating and collecting manufacturer payments allocable to the carrier to credit their value to the carrier. Manufacturer payments included rebates regardless of category, commissions and administrative or management fees.

Compass Rose confirmed that Express Scripts wired the rebate shortfall in March 2024 and that the dollars were returned to the Federal Employees Health Benefits Program.

The practical point is in that comparison. Moving the contract to another company changed where the money landed. The plan’s entitlement still depended on the language reaching that company and that payment.

What Does the GPO Safe Harbor Cover?

The GPO safe harbor addresses supplier payments to qualifying purchasing organizations under the Anti-Kickback Statute. Its fee provisions turn on the written agreement, the amount disclosed and the relationship between the purchasing organization and the businesses it serves.

The written agreement must state either a fee of 3% or less of the purchase price or the amount each vendor will pay, with a maximum if the amount is not known. That alternative has no such percentage ceiling.

Ownership is another part of the safe-harbor question, including when a purchasing organization and the businesses it serves share a parent. A manufacturer contracting employee may know what the fee buys, how it is calculated and who negotiated it. We assess those payments and corporate relationships with you and pharmaceutical whistleblower lawyers who understand PBM contracts.

What Changes for PBM Affiliate Fees in 2028?

The Consolidated Appropriations Act, enacted in February 2026, adds Medicare Part D compensation restrictions that reach PBMs and their affiliates beginning in calendar year 2028. The Centers for Medicare & Medicaid Services described the requirements in its June 2026 request for information on PBM compensation and data collection.

Under the new law’s bona fide service fee definition, the payment must be a flat dollar amount at a fair price for specified work actually performed. It cannot depend on the drug’s price, rebate amounts, formulary placement or referral volume. Calling the payment an administrative fee will not answer what work it paid for.

The law reaches ownership and control relationships and contractors performing covered PBM functions. The Centers for Medicare & Medicaid Services specifically names group purchasing organizations and rebate aggregators in its inquiry. Annual reports beginning in 2028 must cover the prior plan year and include revenue retained by the PBM or its affiliates. The fee can sit outside the PBM and still belong in the report.

The Earlier Rebate Rule Is on a Different Clock

The separate November 2020 rebate rule would remove protection for certain Part D manufacturer rebates and add protections for point-of-sale reductions and specified PBM service fees, but those amendments are delayed until January 1, 2032. The existing GPO safe harbor remains in force.

The Patient Can Still Pay From the Higher Price

A rebate credited to a plan can reduce its net cost while leaving the patient’s payment tied to the price before the rebate. GAO’s September 2023 report found that Part D beneficiaries paid more than plan sponsors, after rebates, for 79 of the 100 drugs receiving the most rebates in 2021. A large rebate can look attractive on the plan’s reconciliation and still leave the person taking the medicine with the larger bill.

The USC Schaeffer Center’s 2020 study, The Association Between Drug Rebates and List Prices, examined the relationship between rebates and list prices from 2015 through 2018. It found a positive relationship between changes in estimated rebates and list prices, with a stronger relationship for drugs without generic competition:

When a Fee Label Hides What the Payment Bought

The Medco and AdvancePCS cases show why the payment’s purpose matters alongside its name. Both involved allegations that manufacturer money bought something more consequential than administrative work.

Medco agreed to a $7.9 million settlement in 2015 over allegations that it solicited concessions from AstraZeneca in exchange for making Nexium the sole and exclusive proton pump inhibitor on certain formularies. The Justice Department’s announcement identified reduced prices on Prilosec, Toprol XL and Plendil as the alleged payment. The products carrying the discount were different from the product getting the preferred position.

Former AstraZeneca employees brought the whistleblower case. The government alleged that the arrangement caused false Nexium claims to the Medicare Retiree Drug Subsidy Program. AstraZeneca separately agreed to a settlement of the same amount over the same alleged conduct.

In the AdvancePCS matter, the Justice Department and HHS described allegations that manufacturer kickbacks were disguised as administrative fees and sales and service agreements. The alleged exchange was marketing drugs to providers reimbursed by federal health programs. The resolution also covered allegations that AdvancePCS paid customers to secure or retain PBM business.

The Reporting Question Follows the Money

A whistleblower’s complaint against US WorldMeds alleged that payments benefiting Novation members were called administrative fees to Novation and excluded from the Average Sales Price reported to CMS. The allegation connects the label to a government price report: who benefited from the payment affected what the manufacturer reported.

A separate Amgen complaint alleged that an intermediary could obscure the same connection:

The fee-label question also reaches Medicaid Best Price and Average Manufacturer Price. In a 2019 review, the Department of Health and Human Services’ inspector general found that manufacturers used differing assumptions about service fees in those calculations. Manufacturers told the agency that treating certain PBM administrative fees as discounts would lower Best Price, while excluding them as service fees would raise it.

These allegations put the contract, payment recipient and government report beside one another. For someone in rebate operations, contracting or finance, that is where an internal fee classification becomes consequential outside the business.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You See the Money Before the Client Does

If your manufacturer agreement, affiliate fee schedule and plan rebate report tell different stories, speak to one of our whistleblower experts about where the rebate money stops. We build your strongest pharmaceutical whistleblower case around the gap between those transactions and the promises made to healthcare plans and government programs. We bring in pharmaceutical whistleblower lawyers who understand PBM contracting and rebate reporting, and stay with you as the case develops.