S. 3349: PBM Disclosure Act

This bill, known as the PBM Disclosure Act, seeks to enhance transparency in the compensation structures associated with pharmacy benefit management (PBM) services and third-party administration services provided to employer-sponsored health plans. Here are the key aspects of the bill:

1. Modification to Disclosure Requirements

The bill amends an existing section of the Employee Retirement Income Security Act (ERISA) to clarify that entities providing pharmacy benefit management services must disclose both direct and indirect compensation that they expect to receive. This includes compensation received from:

• Pharmacy benefit managers.
• Other service providers offering related services.

2. New Regulations

Within 180 days of the bill’s enactment, the Secretary of Labor is required to create regulations that outline the specific requirements for covered service providers. These new regulations will determine how compensation disclosures should be handled in relation to PBM services. The regulations will take effect for any plan year that begins at least six months after they are established.

3. Legislative Intent

The bill expresses the sense of Congress that its amendments provide clarity to existing requirements without imposing additional obligations than what was already outlined under current law, particularly in relation to a previous statute known as the No Surprises Act.

4. Implications for Employers and Plans

By enhancing the disclosure of compensation, the legislation aims to assist employers in better understanding the costs associated with PBM services. This transparency may help in decision-making regarding the selection of health plans and pharmacy benefit managers.

5. Impact on Stakeholders

Stakeholders affected by this legislation include:

• Employers offering health plans.
• Pharmacy benefit managers and third-party service providers.
• Employees enrolled in employer-sponsored health plans who may benefit from improved cost structures.

Relevant Companies

• MCK - McKesson Corporation, a major pharmacy benefit manager, may need to adjust its compensation disclosure practices to comply with the new regulations.
• CVS - CVS Health, which operates PBM services, may face additional requirements for transparency in its compensation models.
• ANTM - Anthem, Inc., involved in providing pharmacy benefit management services, could be directly impacted by the new disclosure regulations.