One of the key provisions of the CAA is the requirement for PBMs to provide more transparency regarding their pricing, compensation and rebate practices. Under the new law, PBMs will be required to disclose information about the amount and type of rebates they receive from drug manufacturers and how they are used. This information will be made available to patients and policymakers, allowing them to better understand how PBMs impact the cost of prescription drugs.

The Consolidated Appropriations Act (CAA) of 2021 includes several important provisions related to Pharmacy Benefit Managers (PBMs) that became effective last year. Many plan sponsors are still confused over what they must do, and a number of PBMs have been less than thorough in helping their clients comply with the new regulations. These provisions aim to increase transparency and reduce costs for patients, who have long struggled with the high cost of prescription drugs in the United States. At WBC (, we help clients receive all of the details necessary to meet this obligation.

Another important provision of the CAA is the establishment of a pharmacy price comparison tool. This tool will allow patients to compare the cost of prescription drugs at different pharmacies and determine which pharmacy offers the best price. PBMs will be required to provide data to the Department of Health and Human Services (HHS) for the development of this tool. This provision is intended to help patients make informed decisions about where to fill their prescriptions and reduce out-of-pocket costs.

The CAA also requires plan sponsors to complete a form that describes vendor compensation disclosure and submit the information to the Department of Labor. It is incumbent on the PBM to provide their clients with this information in order for the plan sponsor to determine whether the compensation paid to the PBM is “reasonable.” This information includes ALL compensation, paid to the PBM and their broker/consultant. This provision may prove particularly sticky, since many consultants are paid commissions or fees, unbeknownst to their client and may far exceed what the client pays to the consultant!

Additionally, the CAA also includes provisions related to drug importation and the use of biosimilars, which could impact PBMs. The legislation allows for the importation of certain prescription drugs from Canada, potentially providing a lower-cost alternative to patients. Additionally, the CAA encourages the use of biosimilars, which are lower-cost alternatives to biologic drugs, and provides incentives for healthcare providers to prescribe them.

While the provisions of the CAA related to PBMs are intended to increase transparency and reduce costs, some critics argue that they do not go far enough. For example, some advocates for lower drug prices have called for the elimination of the rebate system altogether, arguing that it contributes to high drug costs. Others have called for greater regulation of PBMs to ensure that they are acting in the best interest of patients and not just their own financial gain.

Overall, the CAA of 2021 includes several provisions related to PBMs that could impact the cost of prescription drugs for patients. While it remains to be seen how effective these provisions will be in practice, they represent an important step towards increasing transparency and reducing costs in the healthcare system. As the debate over drug pricing and access continues, PBMs will remain a key player in the discussion. Stay tuned for more fireworks in this area!