PBMs get fresh attention as Congress punts healthcare debate to January 

Congress has closed shop for the year without extending the Affordable Care Act’s enhanced subsidies that expire at the end of the month, leaving Democrats and moderate Republicans in both chambers looking to January for a potential compromise that could include changes for employer plans including new transparency requirements for Pharmacy Benefit Managers.

This final week of the session saw two measures pass the House. After the chamber passed a Republican bill (HR 6703) containing employer-focused policies that leaves out the subsidies and is a nonstarter in the Senate, four House Republicans signed onto Democrats’ discharge petition that forces a January vote on a clean three-year extension of the enhanced subsidies, setting up a renewed debate early next year that could draw employer-focused policies into the mix. 

The House-passed Republican healthcare bill revives a bipartisan proposal to require semiannual PBM reports to employers detailing their direct and indirect compensation and providing extensive data on employers’ prescription drug spending. The proposal was part of a bipartisan spending bill that nearly cleared Congress in December 2024 before being derailed by President-elect Trump and his allies over broader concerns about the cost of the overall package. 

Additional PBM reforms that could be in the mix for employer plans and/or public programs next year would delink list drug prices and PBM compensation; ban PBMs from engaging in “spread pricing” (i.e., charging a plan sponsor or insurer more than the amount reimbursed to the pharmacy dispensing the drug); require PBMs to pass through all rebates, fees and discounts received from drug manufacturers directly to health plans; and extend ERISA fiduciary duty standards to PBM services. Lawmakers also hope to ban so-called patient steering, where PBMs may direct patients to pharmacies in which they have a financial interest.  

Also sure to be on the table early next year are provisions in the Republican healthcare bill aimed at reducing costs for small employers but unlikely to draw support from Democrats. These include proposals to codify and expand 2019 rules that created Individual Coverage HRAs; permit unrelated businesses and self-employed individuals to obtain coverage through association health plans; and restrict states’ ability to regulate “stop-loss” policies that enable employers to protect against catastrophic costs.

While the legislative path ahead next year is uncertain, the year-end revival of PBM transparency reforms and the political imperative to address healthcare affordability looks likely to set up employer-focused policies for a renewed, serious look in Congress.