Ranking Member Scott: DOL’s PBM Rule Should Go Further to Improve Transparency and Affordability

Ranking Member Scott: DOL's PBM Rule Should Go Further to Improve Transparency and Affordability

WASHINGTON - Ranking Member Robert C. "Bobby" Scott (VA-03), House Committee on Education and Workforce, released the following statement after the Department of Labor (DOL) proposed a new rule regarding pharmacy benefit manager fee disclosures under the Employee Retirement Income Security Act (ERISA).

"Working families across the country are facing skyrocketing health care costs and exorbitant drug prices. I have long been concerned that pharmacy benefit managers (PBMs) are not complying with the rules established by the Consolidated Appropriations Act of 2020 that require they disclose direct and indirect compensation, including rebates from drug companies that often lead to profits for PBMs and higher costs for patients and families.

"I am pleased that this proposed rule takes steps to improve disclosures under Employee Retirement Income Security Act (ERISA) to address rising drug costs associated with self-insured plans. However, its narrow scope is a missed opportunity to tackle the larger issues in the health care market. The rule exempts insurance companies that act as PBMs on behalf of fully insured plans. It also does not improve transparency for other types of service providers such as third-party administrators that often charge excessive fees or operate with conflicts of interest that raise costs for workers and employers alike.

"The Department of Labor (DOL) should address these deficiencies in the final rule, and Congress should move forward with the bipartisan Hidden Fees Disclosure Actto provide meaningful transparency and lower health care costs for working families."

Background:

In 2022, Representatives Scott (D-VA-03) and Foxx (R-NC-05), sent a bipartisan letterurging the Employee Benefits Security Administration (EBSA) to issue guidance to ensure PBMs disclose their compensation and potential conflicts of interest.

Last year, Representatives Courtney (D-CT-02) and Houchin (R-IN-09) reintroduced the bipartisan Hidden Fees Disclosure Act to shine a light on the opaque prescription drug pricing system and the fees charged by health plan service providers to ensure patients get a fair deal. In 2023, the House passed his bill (320-71) as part of the Lower Cost, More Transparency Act.

The Labor, Health and Human Services, Education and Related Agencies (Labor-H) funding bill includes much of the work undertaken by the Education and Workforce Committee to require transparency in PBM services, but more needs to be done to make sure excessive fees can't drive up health care costs for workers and their families.

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