A newly proposed rule from the Department of Labor (DOL) could significantly reshape oversight of pharmacy benefit managers (PBMs) by requiring greater transparency into the fees, compensation structures, and potential conflicts of interest associated with PBM services provided to employer-sponsored health plans. The proposal, introduced through the Employee Benefits Security Administration, would amend ERISA disclosure requirements so that plan fiduciaries receive more detailed financial information about both direct and indirect PBM compensation.
The rule is part of a broader wave of PBM reform activity, including recent federal legislation expanding CMS oversight of PBM-pharmacy contracts and high-profile enforcement actions targeting PBM pricing practices. Together, these developments signal a coordinated policy push toward increased accountability and scrutiny of PBM business models, particularly from the perspective of employer plan sponsors responsible for managing prescription drug benefits.
Jesse Dresser, partner in Frier Levitt’s Life Sciences Department and head of the Pharmacy Practice Group, weighed in on one of the most consequential policy shifts tied to these reforms:
“The notion of delinking PBM reimbursement from list prices is essentially trying to remove that perverse financial incentive that aligned a PBM’s profits and revenue with the list price of the drug,”
As Jesse explained, traditional PBM revenue models have created financial incentives tied to higher list prices, meaning PBMs could generate greater profits as drug prices increased. Efforts to delink reimbursement from list prices are intended to remove that incentive structure and shift focus toward clinical value and patient outcomes rather than pricing alone.
Read the full article with Drug Topics.
