By Alison LaPidus, Director, Policy & Regulatory Affairs
Congress enacted the most comprehensive federal PBM transparency and accountability reforms in history in the Consolidated Appropriations Act (CAA). Now comes the equally important task of sorting out the details.
First up, based on the law’s timeline, are several changes to Medicare Part D. The Centers for Medicare & Medicaid Services (CMS) will of course take the lead on these provisions. For continuity, CMS should carry the mantle on all of the CAA’s provisions to make sure the CAA is enacted fully and with minimal disruptions for patients and other key stakeholders. This will help minimize additional administrative, financial, and operational burdens that other agencies might introduce, such as the Department of Labor’s proposed PBM transparency rule, which will overlap with parts of and complicate the Administration’s efforts to implement the CAA.
PBMs are committed to being constructive partners in CMS’s efforts.
In comments submitted to CMS this week, the Pharmaceutical Care Management Association (PCMA) outlined recommendations to help ensure the new law delivers meaningful transparency while avoiding unintended consequences that could increase costs, create administrative burdens, or disrupt access to prescription drugs for patients. The goal should be providing the right information in a way that helps patients without raising costs for taxpayers or the Medicare program.
The CAA established a clear framework for regular reporting and accountability, ensuring PBMs are the most transparent entities in the payment supply chain. CMS should follow that statutory framework 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. Specifically, PCMA encouraged CMS to consider the following:
- Successful implementation starts with clear definitions. CMS should ensure that its definition aligns with Congressional intent so that only entities actually performing PBM functions are regulated as PBMs. Similarly, instead of defining all entities in the supply chain as affiliates simply because of their role in the supply chain, CMS should look to establish clear objective standards that only recognize affiliates in cases where there is meaningful majority ownership interests. Creating overly broad definitions will add complexity and cost without advancing transparency or accountability.
- New reporting requirements should be practical and balanced. New reporting systems should provide useful information to employers, Medicare plans, and the federal government while avoiding duplicative, overly restrictive, or inconsistent requirements that increase administrative burden without improving oversight.
- Transparency must include strong protections for sensitive information. Congress intended to provide greater visibility into PBM operations, not to expose competitively sensitive business information or patient-specific data. A standardized, secure reporting framework can help CMS achieve both objectives.
- Avoid one-size-fits-all approaches that will raise costs for patients. PBMs perform a wide range of services, including claims processing, pharmacy network management, formulary administration, manufacturer contracting, and patient safety programs. As CMS implements the law, guidance should reflect the operational realities of administering drug benefits for millions of Americans and avoid one-size-fits-all approaches that could increase costs.
- Implementation should preserve competition. The reforms enacted in the CAA were designed to enhance transparency and accountability, not to undermine successful arrangements that have helped keep Medicare costs low while providing beneficiaries with broad access to medicines.
While Congress carefully developed a timeline for implementing these provisions in Medicare by 2028, PBMs are urging CMS to propose guidance as soon as possible. PBMs and the plans they support will need time to update contracts, develop and test systems, and implement compliance processes before the 2028 plan year.
PBMs stand ready to work with CMS, employers, and policymakers to ensure practical implementation, clear rules, and meaningful transparency to deliver on the promise of PBM reform.
Read the full letter HERE.