As we head into 2024, employers are keeping a close watch on the evolving efforts by state and local governments to enforce stricter regulation on pharmacy benefit managers (PBMs). The anticipated crackdown has now led employers to push for a more stringent federal law preemption of these measures. Bloomberg Law recently reported this emerging trend, detailing the concerns shared by many employers.
PBMs, entities that manage prescription drug plans on behalf of health insurers, have often come under criticism due to their lack of transparency and allegations of inflating costs to health plans. Up to the present moment, the federal government has not introduced any legislative measures in an attempt to constraint these intermediaries.
It is anticipated that in the face of state and local attempts to regulate PBMs, employers are increasingly supporting a federal law preemption approach. This trend evidences increasing apprehension among companies with self-insured health plans as they see state interventions in PBM regulation as a potential threat to preemption protections afforded under the federal Employee Retirement Income Security Act.
While it remains to be seen how these dynamic issues will be resolved, they are unquestionably central to discussions regarding the healthcare landscape in 2024. Employers, PBMs, and both state and federal lawmakers will have crucial roles to play in their outcome.