Protecting Your Plan: The Importance of Fiduciary Responsibility in Pharmacy Benefits
Recent lawsuits from employees of Johnson & Johnson and Wells Fargo have raised concerns from payers about transparency, accountability, and ultimately, fiduciary responsibility as it relates to pharmacy benefits. Selecting a partner your plan can trust is essential to success.
What is Fiduciary Responsibility?
By definition, fiduciary responsibility is a legal and ethical obligation to act in the best interest of others. In pharmacy benefits, this means that your pharmacy partner is expected to prioritize members and payers over their own financial gains. Fiduciaries must be transparent, avoid conflicts of interest, and ensure that their actions and the services they provide are aligned with the best interests of their clients and members.
The Role Pharmacy Benefit Managers Play in Fiduciary Responsibility
Pharmacy Benefit Managers manage prescription benefits by doing things like negotiating with drug manufacturers for rebates, managing formularies, processing claims, operating clinical programs, and much more. Through these services, PBMs have the power to control drug prices and who receives payment throughout the supply chain, how and where members receive their medications, and overall costs for plan sponsors and their members.
The complex and sometimes opaque nature of the current pharmacy benefits landscape has led to concerns from payers (and even legislators) about whether all PBMs are acting in the best interests of payers and members. The big question is, how can plan sponsors be sure about their pharmacy partner’s intentions and are their interests aligned with yours?
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Legislative Fiduciary Requirements for PBMs
Given the role that PBMs play in drug access and healthcare spend for a large number of Americans, recognition of the need for fiduciary requirements is increasing. As a result, a growing number of states are enacting fiduciary requirements aimed specifically at PBMs and this trend will likely continue. State fiduciary requirements generally fall into the following categories:
While a few PBMs have select contract language that falls into the “general good faith” bucket, that’s typically the extent of the contract language (if any) that might fall into these categories. It’s important to ask your pharmacy partner if they are incorporating fiduciary language into their contracts in the 16 states that currently require it, at a minimum, and if contract language differs in states without fiduciary requirements.
The Future of PBM Fiduciary Responsibility: Protecting Your Plan
As healthcare costs continue to rise and PBMs remain under scrutiny, the importance of fiduciary responsibility in pharmacy benefits will only grow. States will likely continue to implement regulations that seek to force PBMs to act in the best interest of their clients. But are you comfortable working with a partner that was forced to perform duties in your best interest?
As a start, state-level regulations on PBM fiduciary responsibility are a critical step in promoting transparency, accountability, and fairness in the pharmacy benefits market. But ultimately, plan sponsors should seek a partner who will act in their best interests willingly at all times.
Learn more about SlateRx's fiduciary protections for your plan at www.Slate-Rx.com.