The Trump administration is preparing a Labor Department regulation requiring pharmacy benefit managers, or PBMs, to disclose detailed information about drug prices, manufacturer payments and other sources of revenue to employer clients, as part of its effort to reduce health care costs, The Wall Street Journal reports.
Expected to take effect in July, the rule will apply to self-insured employers, including many large businesses that pay their employees’ medical claims directly. PBMs, which negotiate drug prices and manage prescription benefits, have faced criticism from regulators and lawmakers over a lack of transparency and practices that critics say can increase costs.
Under the new requirements, PBMs must disclose expected compensation from drugmakers and pharmacies upfront, report actual earnings every six months and allow employers to audit their operations. They must also disclose rebates and other payments that could influence which medications patients receive, including payments collected through affiliated group purchasing organizations.
The rule also targets “spread pricing,” a practice in which employers pay more for a medication than the pharmacy receives, allowing the PBM to retain the difference. The regulation follows a separate law passed by Congress in February that includes additional transparency requirements and mandates the return of drugmaker rebates to clients, with most provisions scheduled to take effect in 2028.
Some PBMs opposed the earlier version of the Labor Department proposal, arguing that it duplicated the legislation, while a group representing smaller PBMs supported it. Major companies, including Cigna’s Express Scripts and CVS Health’s Caremark, have already introduced new models they say improve transparency.
Meanwhile, PBMs are expanding other revenue sources, including affiliated specialty pharmacies and private-label versions of lower-cost biologic drugs known as biosimilars.
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