Georgia Attorney General Chris Carr joined a bipartisan group of attorneys general in supporting a proposed rule from the U.S. Department of Labor on Apr. 15 that would increase transparency requirements for pharmacy benefit managers (PBMs) serving employer-funded health plans under the Employee Retirement Income Security Act of 1974.
The proposed rule would require PBMs to disclose twice a year how they generate revenue and allow employers to audit them. The attorneys general also asked the Department of Labor to clarify that this new federal regulation does not override existing state laws aimed at PBM transparency.
“Protecting access to affordable medications is critical for Georgia families, especially those in underserved and rural communities,” said Carr. “That’s why we have taken steps to regulate PBMs in our state. Those laws are not preempted by federal regulations, and we’re proud to support any measure that builds off our efforts to benefit Georgia consumers.”
PBMs were originally created in the late 1960s to process prescription drug claims but now play a much larger role by managing benefits, negotiating with drug manufacturers, and determining which drugs are covered and at what cost. The Department of Labor’s proposal comes as approximately 136 million Americans receive health coverage through an employer plan, with concerns growing about employers’ lack of insight into how PBMs make money or set drug prices.
In their comment letter, the coalition requested that the Department work closely with state attorneys general when enforcing these rules and include language confirming cooperation between federal and state authorities if violations occur.
Currently, three major PBMs handle about 80 percent of prescription drug claims nationwide. All states as well as Washington D.C. and Puerto Rico have enacted laws targeting PBM practices such as patient out-of-pocket costs limits, bans on gag clauses preventing pharmacists from advising patients on cheaper options, and protections for independent pharmacies.