The PBM FAIR Act would classify pharmacy benefit managers (PBMs)—companies that manage prescription drug benefits for health insurance plans—as fiduciaries under federal retirement and health plan law, meaning they would be legally required to act in the best interest of plan participants rather than prioritizing their own profits. The bill would require PBMs and third-party administrators to disclose all compensation they receive, including rebates, fees, and discounts from drug manufacturers and other sources, giving plan sponsors and participants better visibility into potential conflicts of interest. The legislation also prohibits PBMs from being indemnified (protected from liability) for breaches of their fiduciary duties and clarifies that PBMs cannot serve as the responsible fiduciary overseeing the disclosure process, except in cases where a PBM sponsors health plans for its own employees. These changes would take effect 12 months after the bill becomes law and would apply to plan years beginning after that date. The bill, introduced by a bipartisan group of senators, aims to increase transparency and accountability in how prescription drug benefits are managed for millions of Americans covered by employer health plans.
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