The U.S. Department of Labor building in Washington. Photo: Diego M. Radzinschi/ALM
President Donald Trump might use the federal regulatory machinery to make pharmacy benefit managers give employers more information about their prescription drug benefits.
Trump released an executive order Tuesday that calls for administration departments and agencies to find ways to lower prescription drug prices.
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Much of the order is about Medicare and Medicaid drug benefits, but a section with the title "Improving Transparency into Pharmacy Benefit Manager Fee Disclosure" refers directly to employers and the newly confirmed secretary of the U.S. Labor Department, Lori Chavez-DeRemer.
"Within 180 days of the date of this order, the secretary of Labor shall propose regulations pursuant to section 408(b)(2)(B) of the Employee Retirement Income Security Act of 1974 to improve employer health plan fiduciary transparency into the direct and indirect compensation received by pharmacy benefit managers," according to the text of the section.
Other sections that could affect employer plans tell:
◆ Presidential advisors to come up with a proposal for improving the entire "pharmaceutical value chain."
◆ Robert Kennedy Jr., the secretary of the U.S. Department of Health and Human Services, to speed up the processes for letting safe prescription drugs be sold over the counter and for letting manufacturers create "biosimilar" competitors for drugs created through "biological" processes, such as insulin and Humira.
◆ Kennedy to lower barriers to prescription drug imports.
◆ Federal regulators to "reduce anti-competitive behavior from pharmaceutical manufacturers."
One of the Medicare sections directs Kennedy to come up with ideas for improving the Medicare drug price negotiation program established by the Inflation Reduction Act.
The executive order follows earlier indications that Trump could be tough on pharmaceutical manufacturers, PBMs and pharmaceutical distributors.
Related: What the election results mean for employer health plans
The new efforts may run into some of the concerns that have slowed adoption of PBM legislation in Congress and in some state capitals.
Jason Borschow, the founder and president of Abarca Health, a relatively new PBM that emphasizes transparency, has argued that federal efforts to increase PBM oversight may be necessary but may also end up increasing prescription drug costs.
The big PBMs say much of the opposition they face is the result of their successful efforts to squeeze costs out of the pharmaceutical production and distribution system.
Adam Fein, the president of the Drug Channels Institute, maintains that the average inflation-adjusted prices of U.S. brand-name prescription drugs have been falling for seven straight years and that many complaints about prescription drug prices are based on outdated data and the current performance of a few popular, unusually expensive drugs.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
