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To make the new draft pharmacy benefit manager transparency regulations useful to employers and benefits advisors, federal regulators need to develop a standard PBM transparency language.
Benefits advisors at Butler Benefits & Consulting gave that advice in a comment on the draft regulations.
The draft would require PBMs that work with self-insured employers to send the employers detailed prescription benefits transaction reports.
"Disclosures should be standardized enough to allow fiduciaries to compare PBM arrangements over time and across vendors," Butler Benefits told the Employee Benefits Security Administration, the arm of the U.S. Department of Labor that developed the draft.
"Key terms, including what constitutes indirect or 'other' compensation, should be clearly defined to avoid ambiguity," the firm added.
The firm predicted that requiring PBMs to send plan sponsors detailed reports would help the sponsors save money.
"In practice, when employers receive clear, contractually enforceable disclosures and retain appropriate audit and data access rights, they are able to negotiate better PBM agreements, reduce unnecessary drug spending, and improve outcomes for plan participants," the firm said. "When disclosures are incomplete or delayed, employers are often locked into contracts that shift risk and cost away from the PBM and onto the plan without the fiduciary ever fully understanding the tradeoffs."
Butler Benefits is an Amarillo, Texas-based benefits firm that runs the High Plains Health Plan, a plan that contracts directly with health care providers in its market area.
The draft PBM regulations: EBSA posted the draft PBM reporting regulations in January. The comment period ends April 15.
At press time, EBSA had received 20 comments. Most were anonymous or came from pharmacists or pharmacy groups.
Any new federal PBM definitions that EBSA develops for the draft regulations could also affect how the government interprets and implements the new PBM transparency mandate laws included in the new Consolidated Appropriations Act of 2026 spending package.
Definitions: Efforts to define the terms used in federal benefits laws and regulations are often important to implementation and may take years, or decades.
EBSA is still working on definitions of many of the terms, such as "fiduciary," included in the Employee Retirement Income Security Act of 1974.
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