The Trump administration has finalized a regulation requiring pharmacy benefit managers to disclose fees and other compensation to self-funded employers, adding a federal reporting requirement to the increasingly contested business of managing prescription-drug benefits.
The rule was finalized by the Department of Labor’s Employee Benefits Security Administration. The department said the disclosures are intended to give employers a clearer view of payments involving drug manufacturers, pharmacies, affiliated brokers and consultants. Employers could use that information when negotiating contracts and seeking to reduce prescription-drug costs for workers and their dependents.
What PBMs will have to disclose
The regulation covers several forms of compensation connected with prescription-drug plans. The required information includes manufacturer rebates, payments linked to differences between the price paid by a plan and the amount reimbursed to a pharmacy, and money recouped from pharmacies for drugs they dispense.
| Disclosure category | What the rule identifies |
|---|---|
| Manufacturer payments | Rebates paid by drug manufacturers |
| Plan and pharmacy pricing | Compensation tied to the gap between a plan’s payment and pharmacy reimbursement |
| Pharmacy-related payments | Amounts recouped from pharmacies for dispensed drugs |
| Related service providers | Payments to affiliated brokers and consultants |
Labor Secretary Keith Sonderling described the regulation as a measure aimed at workers who face high costs at pharmacies. The department said greater access to compensation data should strengthen employers’ position in contract negotiations and help them examine how money moves through their drug-benefit arrangements.
“This is a win for every American worker who has ever paid too much at the pharmacy counter. For years, PBMs have operated in the shadows, pocketing hidden fees while workers and employers were left in the dark.” — Keith Sonderling, Secretary of Labor
Industry groups challenge the approach
The rule was first proposed in late January and has received support from employer groups. PBMs, however, have argued that the regulation could overlap with reforms Congress enacted as part of a bipartisan health funding package. Those measures include several provisions related to transparency.
The Pharmaceutical Care Management Association, the leading lobbying organization for PBMs, called in March for the proposed regulation to be withdrawn. The group said the Labor Department’s requirements could create duplicative reporting and disclosure obligations for PBMs to manage alongside the congressional reforms.
PCMA President David Marin said Thursday that the organization was concerned the rule could produce results contrary to the department’s stated goal. He also questioned whether the Labor Department had exceeded Congress’s intent and its own authority. The dispute places the regulation within a broader argument over how employers, benefit managers and other participants in the prescription-drug supply chain should account for fees, rebates and related payments.
