Improving Transparency Into Pharmacy Benefit Manager Fee Disclosure
What happened
As directed by President Trump's Executive Order 14273, the Department issued a final rule targeting pharmacy benefit management services and affiliated brokerage and consulting providers. The regulation requires these entities to disclose their direct and indirect compensation to fiduciaries of large, self-insured group health plans subject to ERISA. This action was taken under ERISA's statutory prohibited transaction exemption for service arrangements.
Why it matters
Pharmacy costs are a major driver of employer healthcare spending and are rising faster than medical and surgical expenses. The mandatory disclosures allow plan fiduciaries to assess whether service provider contracts and overall compensation rates are reasonable.
Who it affects
- ›Providers of pharmacy benefit management services
- ›Affiliated providers of brokerage and consulting services
- ›Fiduciaries of large, self-insured group health plans
- ›Sponsors of large, self-insured group health plans
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