Executive Action Aims to Slash Drug Prices and Enhance PBM Clarity and other notes from around the interweb:
- Executive Action Aims to Slash Drug Prices and Enhance PBM Clarity. The Employer Retirement Income Security Act (ERISA) mandates strict standards for fiduciaries managing employee benefit plans, requiring careful selection, and monitoring of third-party providers like PBMs. Recently, the PBM industry faces increased scrutiny over drug costs, transparency issues, and lawsuits alleging mismanagement of prescription benefits. On April 15, 2025, President Donald Trump issued an executive order (EO) to reduce prescription drug prices in the U.S. This order instructs the Department of Labor (DOL) to enhance transparency in employer health plans regarding compensation from pharmacy benefit managers (PBM). While these changes will take time to implement, immediate cost reductions are not expected.
- The Rise in Direct-to-Consumer Advertising of Prescription Drugs. From the marketing of drugs with low-added benefit to manufacturers’ inability to follow FDA guidelines, direct-to-consumer advertising for prescription drugs has increased in the US and is beginning to raise alarms. “Under FDA guidelines, pharmaceutical companies are supposed to provide a balanced view of drugs in advertising in terms of their risks and benefits,” said Jenny Markell, BA, PhD Candidate of Health and Public Policy at the Johns Hopkins Bloomberg School of Public Health. “They’re supposed to avoid any misleading information. It’s illegal, for example, to overstate a drug’s benefits, misrepresent data from studies, or make claims that are not supported by adequate evidence.” However, even after FDA attempts of holding manufacturers accountable, drug companies continue to skew the country’s perceptions of specific prescription drugs.
- PBMs Score a Win in Federal Court Against State Regulation. A recent federal court decision has the potential to tip the balance in an ongoing series of skirmishes over state regulation of pharmacy benefit managers (PBMs). In McKee Foods Corp. v. BFP Inc. d/b/a/ Thrifty Med Plus Pharmacy, the US District Court for the Eastern District of Tennessee declared that an “any willing pharmacy” requirement in Tennessee was preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA), as amended. On one side, self-funded group health plans argue that ERISA allows them to comply with a single set of rules nationwide, rather than having to navigate a patchwork of different, overlapping, and sometimes conflicting state laws.
- Arkansas governor signs legislation banning PBMs from simultaneously owning pharmacies. Arkansas lawmakers in the Senate on Wednesday passed a bill that would stop pharmacy benefit managers (PBMs) from owning pharmacies and selling drugs retail in the state. The bill now heads to the governor’s desk for her signature. PBMs are the middlemen who negotiate with insurance companies, manufacturers, and pharmacies to set drug prices. Where the controversy comes in is when PBMs also own their own pharmacies, creating what many believe is a conflict of interest. CVS officials said a new law restricting Pharmacy Benefit Managers from owning pharmacies will result in the closure of more than 20 Arkansas pharmacies.
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