For
years,
Congress
has
signaled
that
it
wants
to
crack
down
on
Pharmacy
Benefit
Managers,
the
middle
men
that
have
come
under
fire
for
their
vertical
integration
with
insurers
and
their
role
in
spiking
drug
costs.
This
week,
it
finally
happened
via
the
Consolidated
Appropriations
Act
of
2026,
prompting
employer
groups
including
the
Purchaser
Business
Group
on
Health
(PBGH)
and
the
ERISA
Industry
Committee
to
cheer
its
passage.
“Taken
together,
the
bipartisan
health
care
reforms
in
this
law
will
lower
health
care
costs
for
employers
and
employees
alike,
introduce
new
accountability
for
PBMs,
and
will
deliver
purchasers
an
unprecedented
amount
of
transparency
into
their
pharmacy
benefit
plan,”
according
to
a
statement
from
PBGH.
But
the
reality
is
more
complicated.
While
it
is
true
that
there
were
major
gains
made
by
employers,
one
of
the
most
significant
parts
of
the
law
—
the
delinking
of
PBM
compensation
from
the
price
of
a
drug
in
Medicare
Part
D
—
eluded
employer
groups.
This
is
a
provision
in
the
new
law
that
only
applies
to
Medicare
Part
D,
according
to
Jesse
Dresser,
a
partner
in
Frier
Levitt’s
Life
Sciences
Department.
In
Medicare
Part
D,
spread
pricing
was
also
prohibited
as
PBMs
will
no
longer
be
able
to
derive
any
revenue
tied
to
the
cost
of
the
drug,
Dresser
stated.
Spread
pricing
occurs
when
a
PBM
charges
a
health
plan
more
for
a
drug
than
it
pays
the
pharmacy
and
keeps
the
difference
as
profit.
The
changes
will
take
effect
in
2028.
Employers,
meanwhile,
didn’t
get
a
ban
on
spread
pricing,
noted
Shawn
Gremminger,
president
and
CEO
of
the
National
Alliance
of
Healthcare
Purchaser
Coalitions.
Neither
did
they
get
the
“longshot
ask”
of
making
PBMs
fiduciaries
to
their
clients,
which
would
require
PBMs
to
act
in
the
best
financial
interest
of
employers.
Still,
this
shouldn’t
diminish
what
the
law
achieves,
as
it
is
a
“big
deal
and
will
meaningfully
change
the
way
PBMs
operate
in
the
commercial
space,”
Gremminger
said.
If
delinking
from
list
price,
a
ban
on
spread
pricing
and
PBMs
not
becoming
fiduciaries
to
customers
ultimately
failed
in
the
final
passage,
what
gains
were
made?
What
the
law
does
include
for
employers
is
a
requirement
for
PBMs
to
provide
more
detailed
reporting
to
plan
sponsors,
such
as
a
list
of
covered
drugs
dispensed,
prescriptions
dispensed
by
affiliated
pharmacies
and
information
on
biologics
and
biosimilars.
In
addition,
PBMs
are
mandated
to
pass
along
all
rebates,
discounts,
fees
and
other
payments
they
receive
on
drugs
directly
to
employers
or
group
health
plans.
“After
eight
years,
ERIC-led
reforms
to
the
PBM
industry
that
instill
greater
accountability
and
transparency
made
it
across
the
goal
line,
and
the
result
will
be
lower
drug
costs
for
more
than
160
million
Americans
who
get
their
health
insurance
through
a
job,”
said
James
Gelfand,
president
and
CEO
of
the
ERISA
Industry
Committee,
in
a
statement.
This
does
put
PBMs
on
the
road
to
greater
transparency,
but
the
battle
is
not
won.
As
Wendell
Potter
pointed
out
in
his
newsletter,
employers
may
actually
get
some
of
what
they
want
via
a
rule
the
Department
of
Labor
recently
proposed.
The
rule
would
require
PBMs
to
disclose
all
rebates
and
other
payments
from
manufacturers
to
employer-sponsored
health
plan
fiduciaries,
including
any
compensation
tied
to
the
difference
between
plan
payments
and
pharmacy
reimbursements.
It
also
allows
fiduciaries
to
audit
these
disclosures
and
provides
protections
if
PBMs
fail
to
comply.
“With
the
new
Consolidated
Appropriations
Act
of
2026,
along
with
the
Department
of
Labor’s
proposed
regulation,
I
do
think
that
there
will
be
some
more
protection,
more
relief
aimed
at
compelling
disclosure
of
certain
information,”
Dresser
said.
However,
according
to
Gremminger,
while
the
Department
of
Labor’s
proposed
rule
and
the
Consolidated
Appropriations
Act
of
2026
give
purchasers
“unprecedented
transparency”
into
PBMs,
employers
still
won’t
have
everything
they’re
looking
for.
“Even
after
both
the
regulation
and
the
law
are
implemented,
PBMs
will
still
be
allowed
to
engage
in
spread
pricing
and
link
their
fees
to
the
price
of
drugs
in
the
commercial
market.
PBMs
will
still
not
be
statutory
fiduciaries,”
Gremminger
said.
“The
events
of
the
past
week
are
a
huge
leap
forward,
but
much
more
needs
to
be
done.”
Dresser
also
noted
that
it’s
possible
that
the
Department
of
Labor’s
proposed
rule
may
change
down
the
line,
especially
given
the
fact
that
it
was
released
in
the
same
week
as
the
Consolidated
Appropriations
Act
of
2026.
“Some
of
what
they’re
looking
to
do
in
the
new
regulations
is
already
being
directed
by
law
and
also
calls
for
the
enactment
of
regulations
aimed
at
enforcing
and
implementing
these
new
rules,”
he
said.
“So
I
do
think
that
there
is
a
possibility
that
this
particular
iteration
of
the
Department
of
Labor’s
proposed
regulation
doesn’t
go
through,
but
instead
it
gets
kind
of
converted
into
something
that
maybe
more
aligns
with
the
recently
enacted
law.”
He
added
that
it’s
unlikely
for
future
iterations
of
the
DOL
rule
to
include
a
ban
on
spread
pricing,
as
this
will
likely
need
congressional
action.
However,
it’s
possible
it
could
come
from
agency
enforcement
action.
He
pointed
to
the
recent
FTC
settlement
with
Express
Scripts
over
insulin,
in
which
Express
Scripts
agreed
to
a
series
of
changes,
including
moving
away
from
a
model
that
involves
rebates.
Companies
that
serve
employers
are
also
applauding
the
efforts
made
to
rein
in
PBMs,
including
Carrum
Health.
“We
are
pleased
to
see
these
developments
in
the
approach
to
PBM
pricing
and
compensation
as
it
will
create
more
transparency
for
employers,”
said
Doug
Cole,
vice
president
of
health
plan
partnerships
at
Carrum
Health.
Meanwhile,
AJ
Loiacono,
CEO
of
Judi
Health
(a
tech-enabled
PBM
formerly
Capital
Rx),
agrees
that
this
is
a
major
step
forward,
but
acknowledges
that
more
needs
to
be
done.
For
example,
the
law
doesn’t
address
PBMs
steering
patients
to
affiliated
specialty
pharmacies
or
vertical
integration.
Judi
Health
bills
itself
as
a
transparent
PBM.
“When
PBMs
own
mail-order
and
specialty
pharmacies,
they
have
financial
incentives
to
steer
patients
toward
those
channels—often
at
higher
cost
to
the
plan.
Greater
transparency
into
affiliate
pharmacy
pricing
and
utilization
is
a
great
start,
but
structural
separation
may
ultimately
be
needed,”
he
said.
In
other
words,
Loiacono
is
suggesting
that
PBMs
be
broken
up
such
that
an
insurance
company,
a
PBM
and
a
pharmacy
don’t
have
the
same
corporate
parent,
as
is
the
case
with
many
large
PBM
players
today.
That
may
be
the
longest
shot
of
them
all.
Photo:
cagkansayin,
Getty
Images
Kathryn
