Press Releases

This week, Congressman Rick W. Allen (GA-12), Chairman of the Health, Employment, Labor, and Pensions (HELP) Subcommittee, introduced the PBM Kickback Prohibition Act. This legislation would amend the Employee Retirement Income Security Act of 1974 (ERISA) to prohibit pharmacy benefit managers (PBMs) from paying kickbacks or referral fees to brokers, consultants, advisors, or similar intermediaries in exchange for directing employer health plan or insurer business to the PBM. Upon the bill's introduction, Congressman Allen issued the following statement:

"The Trump Administration and House Republicans are laser-focused on lowering prescription drug prices and making health insurance more affordable. The PBM Kickback Prohibition Act—a signature component of the President's 'Great Healthcare Plan'—would rein in PBMs by ending kickbacks that deceptively raise the cost of health insurance for patients, workers, and families. I thank Chairman Walberg for his support in introducing this bill and look forward to working with the administration and my colleagues to get it across the finish line," said Congressman Rick Allen.

"If we’re serious about lowering health care costs, we have to take on the middlemen driving prices higher. Banning kickbacks paid by pharmacy benefit managers to a medical plan’s advisor or consultant is a commonsense reform that protects workers, employers, and patients. Simply put, Rep. Allen’s bill makes sure decisions are made based on what’s best for patients and plan sponsors—not who’s paying the biggest kickback. This kind of transparency is a key part of the broader effort Republicans are advancing with President Trump to bring down health care costs and make the system work better for American families," said Education and Workforce Committee Chairman Tim Walberg (R-MI).

BACKGROUND: Specifically, the PBM Kickback Prohibition Act adds a restriction to ERISA section 408 stating that when a PBM provides pharmacy benefit management services to a covered health plan, the PBM may not provide any direct or indirect compensation to third parties for referring that plan’s business. The prohibition would apply to plan years beginning after the bill’s enactment, aiming to reduce conflicts of interest and increase transparency in PBM contracting with employer-sponsored health plans.