The U.S. Department of Labor’s Employee Benefits Security Administration announced a proposed rule intended to improve transparency around compensation practices used by pharmacy benefit managers, or PBMs. The initiative is aimed at clarifying payment flows that affect employer-sponsored health plans that cover millions of Americans.
PBMs - which include units of CVS Health, Cigna and UnitedHealth - act as intermediaries that negotiate drug prices and manage formularies on behalf of health plans. Department officials say those entities have come under scrutiny for business practices and a lack of clear disclosure about the payments they receive.
According to the department, PBMs frequently do not reveal the full scope of the payments they collect, a gap that leaves plan fiduciaries unable to determine whether such compensation is reasonable for the plans they oversee. The proposed rule seeks to close that gap by specifying the categories of payments PBMs must disclose.
The regulation would require PBMs to make public rebates and other payments from drug manufacturers, as well as compensation that arises when plans pay more for a drug than the reimbursement provided to pharmacies. It would also cover funds that PBMs recoup from pharmacies. These disclosure requirements are designed to give plan fiduciaries a clearer picture of how PBMs are compensated.
"This action will allow employers to see the full extent of the fees charged by pharmacy benefit managers, enabling them to negotiate a better deal for themselves and American workers," said Deputy Secretary Keith Sonderling.
Beyond forcing broader disclosure, the proposed rule would grant fiduciaries enhanced authority to audit PBM disclosures. The department also said fiduciaries would receive additional protections in situations where PBMs do not comply with the new disclosure requirements.
The department positioned the proposal as part of a broader effort to make PBM business practices more transparent for the benefit of employer-sponsored plans and the workers they cover. The regulation is at the proposal stage and would need to go through the established rulemaking process before becoming final.