TAPP Responds to Request for Comments from Employee Benefits Security Administration on Improving Transparency into PBM Fee Disclosure
The Trade Alliance to Promote Prosperity today responded to a request for comments from the Employee Benefits Security Administration (EBSA) on Improving Transparency into Pharmacy Benefit Manager Fee Disclosure pursuant to section 12 of President Trump's Executive Order 14273, Lowering Drug Prices by Once Again Putting Americans First.
EBSA is proposing a regulation that would require providers of pharmacy benefit management services and affiliated providers of brokerage and consulting services to disclose information about their compensation to fiduciaries of self-insured group health plans subject to the Employee Retirement Income Security Act (ERISA). These disclosures are needed so that fiduciaries can assess the reasonableness of the contracts or arrangements with these service providers, including the reasonableness of the service providers’ compensation. These disclosure requirements would apply for purposes of ERISA’s statutory prohibited transaction exemption for services arrangements. This proposal implements section 12 of President Trump's Executive Order 14273, Lowering Drug Prices by Once Again Putting Americans First, which instructs the Department to propose regulations to improve employer health plan transparency into the direct and indirect compensation received by pharmacy benefit managers. If finalized, this regulation would affect sponsors and other fiduciaries of self-insured group health plans and certain service providers to such plans.
TAPP supports the rule because it would improve the drug market for Americans and help the United States maintain global leadership in pharmaceuticals.
In part, TAPP wrote, “This proposal represents a necessary and overdue step toward restoring accountability, reducing costs, and protecting patients within the prescription drug market. Greater transparency into pharmacy benefit manager (PBM) compensation structures is essential to ensure that employer-sponsored health plans function in the best interests of beneficiaries… The Department’s proposal to require disclosure of both direct and indirect compensation paid to PBMs and their affiliated entities is a critical advancement. By bringing these previously hidden financial flows into the open, the rule will:
Enable fiduciaries to make informed decisions regarding plan contracts
Improve oversight of service provider arrangements
Strengthen accountability across the prescription drug supply chain
Promote more competitive and efficient market behavior…
The Department’s proposed rule is a critical first step toward restoring a functional, competitive, and patient-centered prescription drug market. TAPP strongly supports the Department’s efforts and encourages the finalization of a robust disclosure framework that ensures comprehensive, consistent, and actionable information for plan fiduciaries.”