April 2025 Executive Order Targets PBM Price Transparency
Among the current flurry of Executive Orders is one that narrowly targets pharmacy benefit managers (PBM). Thus far, PBMs have exempted themselves from the Broker Disclosures required by the expansion of 408(b)2 under the 2021 Consolidated Appropriations Act. The President is now directing the DOL to propose additional regulations under 408(b)2 to “improve transparency into pharmacy benefit manager fee disclosures.”
Employer plan sponsors are required to operate employee benefit plans and act in the best interest of the participants. Ensuring the plan is paying reasonable fees, and analyzing the services provided for these fees is a cornerstone of exercising this duty. With pharmacy prices still very much undisclosed, employers need to reply on their advisor for assistance. In their 2024 report to Congress, HHS states:
“Post-rebate or net prices paid by private health insurance plans and issuers may be higher than the net prices received by manufacturers given supply chain markups and amounts retained by or paid to PBMs. However, comprehensive data on the net prices paid by private health insurance plans, issuers, and consumers do not exist for private health insurance coverage.”
We are anxiously awaiting these regulations from the DOL, which promise to be a significant step forward toward cost control.
The full text of this Executive Order can be viewedhere.