PBMs are being transformed into the most transparent actors in the health care system.

How did that happen?

PBMs have come a long way to change how they do business, ultimately leading to patients being better informed about their drug coverage and employers knowing how their health care dollars are being spent. PBMs provide employers, unions, and government programs comprehensive reports that show drug savings data, present specific drug utilization, and outline spending information on prescription drugs. For patients, PBMs offer digital tools that provide real-time information on how much a drug will cost at the pharmacy counter.

The Consolidated Appropriations Act (CAA), passed into law this year, is the last mile on the PBM transparency journey. The transparency PBMs provide, and the reporting that is required, is second to none. Soon, data on every claim, every drug, every contract, and every fee will be easily accessible to employers, unions, and the government.
The enactment of the CAA subjects PBMs to a broad range of detailed reporting mandates:

• Enhanced Reporting: PBMs will report drug-by-drug, claim-by-claim, and pharmacy-specific pricing to employers, unions, and government programs. These reports will dive deep on generics, biosimilars, rebates, agreements with drugmakers, and in some situations, additional information about drug coverage.
• New Audit Rights: Part D plans, employers, and unions will have greater authority to audit PBMs during a plan year. While audits have always been available, standardizing the terms and frequency will make the results more usable for plans.
• Additional Government Studies: The legislation commissions a new comprehensive public report on compensation and payment structures tied to prescription drug prices within the retail prescription drug supply chain under Medicare Part D. Additionally, Congress will receive annual reports on trends and patterns in PBM contracts for Part D, building on earlier reporting on PBM rebates and fees.

The CAA enacted this year includes wide-ranging provisions that dictate how employers, unions, and the government contract with PBMs, mandate new reporting, and impose additional requirements. This post is part one in the Inside PBM Reform series that explores how the provisions in the bill will impact patients, employers, and taxpayers.