ATLANTA, GA – Georgia Attorney General Chris Carr has joined a bipartisan coalition in submitting a comment letter in support of a proposed rule from the U.S. Department of Labor that requires greater transparency from pharmacy benefit managers (PBMs). Specifically, those PBMs that service employer-funded health plans covered under the Employee Retirement Income Security Act of 1974 (ERISA). 

The rule requires PBMs to disclose twice a year how they generate revenue and gives employers the right to audit them. PBMs have long sought to avoid state regulation by claiming federal preemption under ERISA. For this reason, the attorneys general also urge the Department to clarify that the proposed rule does not preempt state PBM transparency laws. 

“Protecting access to affordable medications is critical for Georgia families, especially those in underserved and rural communities,” said Carr. “That’s why we have taken steps to regulate PBMs in our state. Those laws are not preempted by federal regulations, and we’re proud to support any measure that builds off our efforts to benefit Georgia consumers.”

Created in the late 1960s to process prescription drug claims, PBMs now play a far broader and more powerful role in the health care system by managing prescription drug benefits for health insurers. This includes, among other things, negotiating rebates and reimbursements with drug manufacturers and determining which drugs are covered and at what cost. Approximately 136 million Americans receive health coverage through an employer — either their own job or a family member’s — and the proposed rule responds to concerns that employers often lack visibility into how PBMs are making money or why drug costs change. 

In the comment letter, the attorneys general ask the Department to clarify that it supports working with them to enforce the rule. According to the coalition, there should be mention that nothing in the rule is intended to prevent the Department from referring matters to state attorneys general, requesting their investigative or enforcement assistance, or coordinating with them when the Department discovers violations of state law.

Today, the top three PBMs manage approximately 80 percent of prescription drug claims. Due to the power imbalance held by PBMs and the negative effects of such power on drug pricing, all 50 states, the District of Columbia, and Puerto Rico have enacted laws to rein them in. Common provisions include limits on patient out-of-pocket costs, bans on “gag clauses” that prevent pharmacists from telling patients they could save money by paying for their prescription out of pocket instead of using insurance, and protections against unfair treatment of independent pharmacies. 

Joining Carr in submitting this comment letter are the attorneys general of Alaska, American Samoa, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, Virginia, Washington, West Virginia, and Wyoming.

Find a copy of the letter here  (PDF, 814.87 KB) .