Crossing Our Fingers
As we start 2024, we know it will be difficult to move forward any federal legislative priorities beyond funding the government, due to the oxygen-sucking upcoming campaign season.
That said, we’re crossing our fingers that the momentum from late last year on pharmacy benefit manager (PBM) transparency will continue and we’ll have some movement and legislation signed into law.
At The Council, we’ve worked for the past couple years on a niche issue within the goliath of PBM transparency. At the direction of our membership, we have focused on the way PBMs report (or don’t report) their compensation. When Congress passed the Consolidated Appropriations Act of 2022, language was included in a section of the bill that requires brokers to report their compensation if they provide services to a group health plan and expect to receive at least $1,000 in direct or indirect compensation. We interpret the section to also include PBMs because it specifically calls out “consultants” and defines consultants to include those who provide “pharmacy benefit management services.” Yet this isn’t happening. In fact, we worked with the Department of Labor to help them understand the intricacies of broker compensation before they issued their bulletin on compliance. DOL has yet to issue any sort of guidance for PBMs.
Fortunately, Congress is on our side. In December 2022, the chair and ranking member of the House Education and Workforce Committee, Virginia Foxx (R-N.C.), sent a letter to the Department of Labor asking the agency to clarify that the requirements “fully apply to covered service providers…including pharmacy benefit management.” And just before Christmas 2023, the House passed a bill containing language that essentially reaffirms PBM inclusion. Now, we just need the Senate to move forward. They’re currently working through the details of their own PBM transparency legislation and how it can be combined with what the House passed. While the Senate has different language on our compensation issue, it fundamentally accomplishes the same.
The momentum behind PBM transparency has been churning for years. Members of Congress regularly tell us the price of all goods, prescription drugs included, is top of mind for constituents. While the reporting of compensation by PBMs won’t cut commercial healthcare prices in half, it’s a start toward helping employers understand the Pandora’s box of drug prices.