Congress Turns Up the Heat on PBMs: What Employers Need to Know Now

Why Employers Can’t Ignore the Congressional Crackdown on PBM Practices

In today’s complex healthcare environment, employers are expected to manage rising costs while delivering quality benefits to their workforce. One key area that’s drawing increasing attention, especially from Congress, is the role of Pharmacy Benefit Managers (PBMs). Recent developments on Capitol Hill have highlighted alarming discrepancies between what PBMs are saying and what investigations are uncovering. The message is clear: employers can no longer afford to ignore how these middlemen are operating behind the scenes.

PBMs: Designed to Cut Costs, Now Fueling Concerns

PBMs were originally created to streamline prescription drug benefits, negotiating with manufacturers, managing formularies, and processing pharmacy claims. In theory, they should help lower drug costs and improve access. But in practice, the reality often looks very different.

Investigations by the House Oversight Committee and the Federal Trade Commission (FTC) have raised serious concerns about PBMs prioritizing profits at the expense of patients and payers. At a recent hearing, top PBM executives delivered testimony that appears inconsistent with these findings, prompting Congress to demand clarification.

This isn’t just a bureaucratic spat. It’s a wake-up call for every employer that contracts with a PBM.

Transparency Troubles: If PBMs Mislead Congress, What About Employers?

The inconsistencies in congressional testimony point to a bigger issue: if PBMs aren’t being transparent with federal investigators, what are they hiding in their business dealings with employers? Are contracts fair? Are rebate savings actually being passed along? Or are employers unknowingly footing the bill for hidden profits?

Employers should be asking:

• Am I receiving full access to claims and pricing data?

• Are the rebates and discounts negotiated on my behalf being fully disclosed?

• Are patients being steered toward higher-cost drugs to benefit the PBM?

Why Fiduciary Responsibility Matters More Than Ever

Under the Consolidated Appropriations Act (CAA), employers are now legally obligated to act in the best interest of plan participants. This includes ensuring that benefit programs, like prescription drug coverage, are managed fairly, transparently, and cost-effectively.

Failing to investigate PBM practices or review contract terms may no longer be just a bad business decision, it could lead to lawsuits and even personal liability for benefit administrators.

A recent lawsuit involving a major corporation underscored this risk:

• Employers must have access to complete data to make informed decisions.

• Individual fiduciaries may be held personally responsible for any failure to uphold these duties.

The Ripple Effect: Impact on Pharmacies and Patient Access

PBM practices don’t just affect employers’ bottom lines, they also hurt independent pharmacies and the patients they serve. Common tactics include:

• Reimbursing pharmacies below the cost of acquiring drugs

• Blocking community pharmacies from dispensing certain medications

• Favoring high-rebate, high-cost drugs over lower-cost, clinically effective alternatives

The result? Pharmacies close. Patients face higher costs and fewer options. Communities, especially rural or underserved ones, lose access to essential care.

What Employers Can Do Right Now

This moment calls for action. Employers should:

• Audit their PBM contracts for hidden fees, spread pricing, and rebate retention clauses

• Request full claims-level data and pricing transparency

• Engage benefit advisors or legal counsel to assess CAA compliance

• Explore competitive alternatives that align with transparency and value-based care

The healthcare landscape is shifting, and fast. Class action lawsuits are already targeting companies that have failed to manage PBM relationships responsibly.

Final Thoughts: It's More Than a Policy Issue—It's a Business Risk

The recent congressional scrutiny of PBMs isn’t just about government oversight, it’s a direct signal to employers that they need to reassess their partnerships. When prescription benefit managers operate without transparency or accountability, employers and employees both lose.

By staying informed and demanding better, employers can protect their organizations, their people, and their reputations. The time to act is now!