Yesterday, we recognized the six-month anniversary of the enactment of historic PBM reform. Today, we take a look at what’s happened since the law was signed and how pharmacy benefit managers (PBMs) are actively engaging employers, policymakers, and federal agencies on implementation.

Bringing Unprecedented PBM Transparency to Life 

The Consolidated Appropriations Act (CAA) guarantees that the transparency PBMs provide, and the reporting that is required, will be second to none. Once fully implemented, the law will provide employers, unions, health plans, and the government with unprecedented visibility into PBM operations, including claims and fee data, drug-level information, contractual arrangements, and compensation structures. With recent business model changes, PBMs have been sharing more information with the employers they serve. The industry is now in the process of building out the systems needed to comply with CAA requirements and respond to audit protocols under development.

Rebate Pass-Through Trend Expedited 

PBMs have been passing more and more manufacturer rebates to clients over the past decade. In fact, PBMs are already passing through 99.6% of rebates to Part D plans and more than 90% to employers. The CAA cements this into law by requiring PBMs to pass through 100% of rebates, fees, alternative discounts, and other dollars received from drug manufacturers that are tied to drug utilization or spending. Today, PBMs are working with employers and unions to recalibrate their benefit designs around the total pass-through model. Efforts are underway to revisit contracts and ensure that rebates remain a powerful tool for lowering astronomically high list prices for prescription drugs.

Rulemaking and Restructuring to Implement “Delinking” 

Known as Big Pharma’s “big win,” “delinking” means PBMs cannot be paid for performance or rewarded for how far they drive down a drug’s price in negotiations with manufacturers. Over the past six months, the Department of Health and Human Services (HHS) has been actively establishing rulemaking definitions for these flat-fee standards ahead of upcoming contract cycles. At the same time, PBMs are working with Medicare plans to adjust contracts to align with the mandates included in the legislation.

Guidelines Impacting Medicare Part D in Development 

New changes in the CAA are reshaping how Medicare Part D’s any willing pharmacy (AWP) rules are applied and enforced. PBMs are constructively engaging with the Centers for Medicare & Medicaid Services (CMS) in the rulemaking process. Additionally, PCMA recently submitted comments to CMS urging them to follow the statutory framework intended by Congress when it comes to Part D while maintaining the flexibility needed to account for the wide range of business models, contractual arrangements, and services that exist across the prescription drug marketplace.

The Path Ahead: Ensuring PBM Reform Delivers on Its Goals 

Six months after Congress enacted the most significant PBM reform ever, the focus has shifted from debate to implementation. To ensure the law is implemented in a way that delivers greater transparency while protecting affordable access to prescription drugs for patients, PBMs are working closely with the employers and unions they serve, along with policymakers and government agencies.