UPDATED: March 20 at 3:45 p.m.
The Pharmaceutical Care Management Association (PCMA) is urging the Labor Department to roll back a proposed rule aimed at boosting price transparency in pharmacy benefit management relationships now that Congress has passed industry reforms.
The department issued the proposed rule at the end of January, and the regulation would require PBMs to disclose key details, such as rebates and payment from drug companies, to employers and plan sponsors. The goal, the agency said, is to support these organizations in meeting their fiduciary requirements under the Employee Retirement Income Security Act (ERISA).
PBMs would also be required to provide details on compensation they earn if a plan pays more for a drug than was reimbursed to the pharmacy as well as any payments they bring in from pharmacies on prescriptions.
In early February, however, Congress passed a number of PBM reforms as part of a bipartisan health funding package. The PCMA argues that with that law on the books, the Department of Labor proposed rule layers "excessive, costly and unnecessary duplicative disclosure requirements on PBMs."
David Marin, CEO of the PCMA, said in a statement that given the requirements signed into law in the funding deal, PBMs will soon be required to provide significant amounts of data to employers, unions and government agencies.
PBMs have also read the tea leaves and took a number of steps to increase transparency in advance of reforms being passed, so many are ahead of the curve on the issue, he said.
As these organizations adapt to the requirements including in the funding package, the Department of Labor should roll back the proposed rule rather than "forcing PBMs to comply with a Rube Goldberg regulatory machine," Marin said.
"“The department has exceeded its statutory authority with its proposed requirements, but importantly, we must ask how this serves patients," he said. "In practice it provides no additional actionable information beyond what the CAA mandates, while creating a completely separate reporting regime that will mean significant compliance costs."
"At this point, the department’s rule is a solution in search of a problem," Marin said.
PUBLISHED: Jan. 30 at 12:15 p.m.
The Department of Labor has issued a proposed rule that aims to inject additional transparency in pharmacy benefit manager relationships.
The agency said Friday that the rule will make it easier for employers and plan sponsors, who serve as fiduciaries on pharmacy coverage, to meet their requirements under the Employee Retirement Income Security Act (ERISA). Under the rule, PBMs would be required to disclose key information, such as rebates and other payments from drug companies, to these fiduciaries for the first time.
In addition, PBMs must provide details on any compensation they receive if the plan pays more for a drug than was reimbursed to the pharmacy, and any payments they recoup from pharmacies on prescriptions.
As part of the proposal, fiduciaries would be able to audit PBMs to determine whether their disclosures are accurate, and whether it would offer greater relief if PBMs do not meet their obligations.
Labor Secretary Lori Chavez-DeRemer said in a press release that the rule brings "unprecedented transparency to an otherwise opaque industry."
"When middlemen are forced to operate in the sunlight, American workers and their families win," she said. "Hidden fees and distorted incentives have no place in American healthcare."
Regulators have been closely scrutinizing the pharmacy benefit management market over the past several years as pharmacy costs and healthcare costs, more broadly, continue to soar. Legislators recently advanced significant reforms for the industry as part of key bills funding the Department of Health and Human Services, moving beyond talk for the first time in years.
The Federal Trade Commission is also conducting a deep dive into the biggest players in the industry and their business practices, and has accused the leading firms of artificially inflating the price of insulin.