To amend the Employee Retirement Income Security Act of 1974 to ensure that pharmacy benefit managers are considered fiduciaries, and for other purposes.
Summary
What This Bill Does
This bill makes pharmacy benefit managers fiduciaries under the Employee Retirement Income Security Act when they perform core prescription-drug benefit functions for a group health plan, plan sponsor, plan administrator, or group health insurance issuer. Covered functions include maintaining a prescription drug provider network or formulary through drug purchases from manufacturers, distributors, wholesalers, rebate aggregators, group purchasing organizations, or associated third parties. It also covers rebate, fee, discount, or price-concession negotiation or aggregation; prescription-drug claims processing and payment; and utilization review or management for prescription drugs on behalf of a group health plan. Treating PBMs as fiduciaries means their conduct is judged under ERISA duties that generally require loyalty, prudence, and acting in the plan interest rather than only under contract terms.
Who Benefits and How
Group health plan participants benefit if PBMs must handle formularies, rebates, fees, discounts, claims, and utilization management under fiduciary duties tied to plan interests. Employer health plans and plan sponsors benefit from stronger legal accountability over PBM contracting and rebate practices. Health insurance issuers offering group coverage benefit from clearer rules for when PBM partners carry fiduciary obligations.
Who Bears the Burden and How
Pharmacy benefit managers serving employer health plans face higher compliance and litigation exposure because formulary, network, rebate, fee, discount, claims-processing, and utilization-management work would trigger ERISA fiduciary status. Plan administrators must evaluate PBM arrangements under fiduciary-duty rules. Drug supply-chain intermediaries involved in rebate aggregation or group purchasing may face more scrutiny when their arrangements feed PBM fiduciary functions.
Key Provisions
- Amends ERISA fiduciary definitions for pharmacy benefit managers tied to group health plans.
- Requires PBMs maintaining prescription drug networks or formularies for group coverage to be treated as fiduciaries.
- Requires fiduciary treatment for rebate, fee, discount, and price-concession negotiation or aggregation.
- Applies fiduciary status to prescription-drug claims processing, payment, utilization review, and utilization management.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Amends ERISA so pharmacy benefit managers and similar entities are deemed fiduciaries to group health plans when they maintain prescription drug networks or formularies, negotiate rebates or other concessions, process drug claims, or perform utilization review for employer health coverage.
Key Policy Areas
Health Care, Employee Benefits, Prescription Drugs
Primary Purpose
Amends ERISA so pharmacy benefit managers and similar entities are deemed fiduciaries to group health plans when they maintain prescription drug networks or formularies, negotiate rebates or other concessions, process drug claims, or perform utilization review for employer health coverage.
Policy Domains
Substantive provisions
Identified Gains
- Group health plan participants
- Employer health plans
- Plan sponsors
- Health insurance issuers offering group coverage
Identified Costs
- Pharmacy benefit managers
- Plan administrators
- Drug rebate aggregators
- Group purchasing organizations
Sponsors
Legislative Progress
In CommitteeReferred to the House Committee on Education and Workforce.
Introduced in House
Mr. Auchincloss (for himself and Mr. Mackenzie) introduced the following …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
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