Congress Introduces Bill to Make PBMs Fiduciaries

The call from more than 100 organizations to increase transparency and accountability among pharmacy benefit managers materialized in Congress this month.

Representatives Jake Auchincloss, D-Massachusetts, and Ryan Mackenzie, R-Pennsylvania, alongside Senators Chuck Grassley, R-Iowa; Maggie Hassan, D-New Hampshire; Tim Kaine, D-Virginia; and Roger Marshall, R-Kansas, introduced on December 17 the PBM Fiduciary Accountability Act, a bill to establish fiduciary responsibilities for PBMs under the Employee Retirement Income Security Act.

Under the Consolidated Appropriations Act of 2021, plan sponsors are required to attest that the fees they pay for ERISA health care plans are fair and reasonable for the services provided. Sponsors should therefore apply a fiduciary process to evaluating their health plans and be aware of pending litigation.

If passed, the bill would amend Section 3(21) of ERISA to add that PBMs will be deemed fiduciaries of a group health plan if they:

• Maintain a “prescription drug provider network or prescription drug formulary through the purchase of prescription drugs”;
• Negotiate or aggregate “rebates, fees, discounts or other price concessions for prescription drugs”;
• Process the payment of claims for prescription drugs; or
• Perform “utilization review and management for prescription drugs on behalf of a group health plan.”

In July 2024, the Federal Trade Commission released an interim report arguing that PBMs were “powerful middlemen” inflating costs and “squeezing Main Street pharmacies.” In its report, the FTC revealed that the three largest PBMs—OptumRx (UnitedHealth Group), Caremark (CVS Health) and Express Scripts (Cigna Group)—managed nearly 80% of all prescriptions filed in the U.S.

This year, issues related to drug pricing and cost transparency have been the subject of both litigation and state legislation, as well as a topic on the Department of Labor’s regulatory agenda.

“For too long, middlemen have used opaque pricing and misaligned incentives to line their own pockets at the expense of employers,” Marshall said in a statement. “PBMs shouldn’t profit by steering plans toward higher‑cost drugs or practices that drive up prices.”

The ERISA Industry Committee voiced support for the legislation.

“Employers, workers and families should be able to rely on those who provide services to employer-sponsored group health plans, such as [PBMs], to adhere to the same fiduciary duties the employer is held to. … Today’s unregulated, ‘honor system’ approach is not working,” said Melissa Bartlett, ERIC’s senior vice president of health policy, in a statement. “When PBMs are performing services on behalf of the employer, they are standing in the shoes of the plan sponsor and should be held accountable.”

The ERIC has previously expressed concern over the issues the bill addresses. In September 2024, the organization released an issue brief asking Congress to clarify that ERISA’s fiduciary standard for employer health benefit plans applies in full to PBMs performing services on behalf of a plan.

As of December 31, the bill had been read twice and referred to the Senate Committee on Health, Education, Labor and Pensions.