To amend the Employee Retirement Income Security Act of 1974 to ensure that pharmacy benefit managers are considered fiduciaries, and for other purposes.
Sponsored By: Representative Rep. Auchincloss, Jake [D-MA-4]
Introduced
Summary
Would treat pharmacy benefit managers (PBMs) as ERISA fiduciaries when they create formularies, negotiate rebates, process drug claims, or run utilization management. It would also require new compensation disclosures by PBMs and third-party administrators and bar indemnifying those fiduciaries for breaches.
Show full summary
- Workers and plan participants would get clearer information about how PBMs and administrators are paid and how drug networks and formularies are set. This adds transparency about compensation tied to prescription drug services.
- Employers and plan sponsors would face clearer rules on which vendors are legal fiduciaries for their group health plans. Contracts that try to indemnify PBMs deemed fiduciaries for breaches would be void.
- PBMs and third-party administrators would have to disclose expected direct and indirect compensation related to running pharmacy networks, buying drugs, processing claims, and negotiating reimbursements. A PBM that sponsors its own employee plan could be treated as that plan's responsible fiduciary. Changes would apply to plan years beginning at least 12 months after enactment.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 1 benefits, 0 costs, 2 mixed.
Pharmacy managers treated as fiduciaries
This bill would treat pharmacy benefit managers (PBMs) and similar vendors as ERISA fiduciaries for employer group health plans in defined situations. It would apply when they run a drug network or formulary, buy drugs, negotiate rebates or discounts, process drug claims, or perform drug utilization management. The rule would start for plan years beginning at least 12 months after enactment. If enacted, this would change the legal duties PBMs owe to plans and participants and could affect plan decisions on formularies and rebates.
PBMs must disclose fees and rebates
This bill would expand ERISA disclosure rules to require PBMs and similar service providers to report expected direct and indirect compensation. It would specifically cover running drug networks and formularies, buying drugs, claims processing, provider network setup, and negotiating reimbursement rates. The rule would apply to plan years that begin at least 12 months after enactment. If enacted, plan fiduciaries and participants would get more information about how money flows between PBMs, manufacturers, and other parties.
Limits on PBM liability and roles
This bill would bar indemnifying any person deemed a fiduciary under the new PBM rule for ERISA duties. It would make contract terms that try to indemnify those fiduciaries void, with one listed exception. The bill would also say covered service providers generally cannot be the responsible plan fiduciary for certain disclosure duties, except a PBM that sponsors a plan for its own employees. These rules would apply to plan years beginning at least 12 months after enactment.
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Sponsors & CoSponsors
Sponsor
Rep. Auchincloss, Jake [D-MA-4]
MA • D
Cosponsors
Rep. Mackenzie, Ryan [R-PA-7]
PA • R
Sponsored 12/18/2025
Roll Call Votes
No roll call votes available for this bill.
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