Congress Moves to Regulate Pharmacy Benefit Managers and Increase Transparency

A bipartisan group of lawmakers has introduced the PBM FAIR Act, legislation that would force Pharmacy Benefit Managers (PBMs) to act as fiduciaries, legally requiring them to prioritize the financial health of patients and employers over their own profits.

• Follow the money: The bill targets the opaque pricing and misaligned incentives that critics say allow PBMs to profit at the expense of patients. “PBMs shouldn’t profit by steering plans toward higher-cost drugs or practices that drive up prices,” said Senator Roger Marshall (R-KS), one of the bill’s sponsors. If passed, it would also mandate detailed disclosures of all PBM compensation.

• Consolidated control: The reform push lands as the heat turns up on the PBM industry, with a 2024 FTC report noting that just three companies control nearly 80% of the market. The bill has drawn strong support from employer groups, with one industry leader stating, "Today’s unregulated, 'honor system' approach is not working."

• The view from the middle: PBMs have a different take. They argue the backlash is a direct result of their success in cutting into the profits of drug makers and pharmacies, pointing to lower U.S. generic drug prices compared to Europe as proof of their effectiveness.

The bill represents a major attempt to force transparency into a notoriously murky corner of health care, potentially shifting leverage from powerful middlemen back to the employers and patients they serve.