PBMs hit by Trump transparency rule
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Pharmacy benefit managers are facing more pressure after the Department of Labor issued new requirements for disclosing their financial dealings with drugmakers, pharmacies and others health system players.
Why it matters: The proposed rule stems from President Trump's executive order on lowering drug prices and comes as Congress is targeting the drug supply intermediaries with more transparency rules.
Driving the news: PBMs like CVS Caremark, Express Scripts and Optum Rx would have to make semiannual disclosures to employers of what they earn for negotiating drug prices on behalf of health plans.
- Those would include payments, rebates and incentives from manufacturers for placing drugs on formularies.
- The proposal released late last week would also require them to disclose any compensation they get when a health plan pays more for a drug than the amount reimbursed to the pharmacy.
- Self-insured group health plans would get to audit the PBMs at least once a year. And PBMs would have to provide an explanation if they make 5% or more of what they estimated they would.
Yes, but: The rule stops short of limiting "spread pricing," where a PBM charges a health plan more than it pays a pharmacy for a drug, or requiring 100% of rebates to be passed through to the health plan.
- "In our view, it is not as tough on PBMs as it could have been, and will be manageable for the organizations," Raymond James analyst Chris Meekins wrote in a note.
What they're saying: Labor Secretary Lori Chavez-DeRemer said the rule would bring "unprecedented transparency to an otherwise opaque industry" and better let health plan fiduciaries size up if the PBMs are being paid reasonably.
- A spokesperson for PCMA, a trade group for PBMs, said the companies "have significantly reformed their models to maximize transparency in recent years" and that surveys show employers are "overwhelmingly satisfied."
