PBM Fiduciary Accountability, Integrity, and Reform (FAIR) Act; PBM FAIR Act
Summary
The PBM Fiduciary Accountability, Integrity, and Reform (FAIR) Act aims to amend the Employee Retirement Income Security Act of 1974 (ERISA) to classify Pharmacy Benefit Managers (PBMs) as fiduciaries. This reclassification mandates that PBMs act in the best interest of group health plans and their beneficiaries. The bill also includes provisions for increased transparency in compensation and prohibits indemnification for breaches of fiduciary duty.
Expected Effects
If enacted, the FAIR Act would subject PBMs to stricter oversight and accountability under ERISA. This could lead to changes in how PBMs negotiate drug prices, manage formularies, and handle claims. Ultimately, the goal is to reduce conflicts of interest and ensure that PBM practices benefit patients and plan sponsors.
Potential Benefits
- Increased transparency in PBM operations and compensation.
- Greater accountability for PBMs in managing prescription drug benefits.
- Potential for lower drug costs for consumers and employers.
- Reduced conflicts of interest in PBM decision-making.
- Enhanced protection for ERISA plan beneficiaries.
Most Benefited Areas:
Potential Disadvantages
- Potential for increased administrative costs for PBMs, which could be passed on to consumers.
- Possible legal challenges to the fiduciary status of PBMs.
- Uncertainty regarding the specific implications of the new regulations.
- Risk that PBMs may reduce services or innovation to avoid fiduciary liability.
- The act may not fully address all issues related to drug pricing and access.
Constitutional Alignment
The PBM FAIR Act aligns with the general welfare clause of the US Constitution, as it seeks to improve healthcare access and affordability. Congress's authority to regulate interstate commerce (Article I, Section 8) provides a basis for federal regulation of PBMs, which operate across state lines. The Act does not appear to infringe on any specific constitutional rights or freedoms.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).