PBM transparency required in new Labor Department proposal

Bob Herman covers health insurance, government programs, hospitals, physicians, and other providers — reporting on how money influences those businesses and shapes what we all pay for care. He is also the author of the Health Care Inc. newsletter. You can reach Bob on Signal at bobjherman.09.

Pharmacy benefit managers face new, sweeping requirements to disclose all the different ways they get money from providing drug coverage.

The proposed rule from the Department of Labor published on Thursday would be a significant change for an industry that shields prescription drug data from employers and frequently locks its clients into restrictive contracts. Federal officials estimate the increased transparency could save employers and workers $1 billion annually as they have access to lower drug prices and actually take their medications.

Employers and governments hire PBMs to negotiate drug prices, create lists of covered drugs, build networks of pharmacies, and process drug claims. Labor attorneys, watchdogs, and even workers have warned large employers that they are overpaying for drugs.