Yesterday, the Education and Workforce Committee
advanced H.R. 7895, Congressman Rick W. Allen's (GA-12)
PBM Kickback Prohibition Act. Congressman Allen
introduced this legislation in March, which 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.
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During yesterday's markup, Congressman Allen delivered the following remarks, as prepared for delivery, prior to the bill's passage:
"Pharmacy benefit managers, or PBMs, are third party intermediaries that wield enormous power over the prescription drug supply chain, affecting 90 million patients covered by ERISA health plans.
"Yet, PBMs operate through a complex and opaque system of fees and rebates that drive up costs for patients and employers while lining the pockets of PBM middlemen. To navigate this system, employers often hire consultants or brokers to help design and manage their health plans. These consultants and brokers are trusted to act in the best interests of employees and employers.
"Too often, however, consultants and advisors are incentivized to steer employers to a particular PBM in exchange for significant financial kickbacks from those PBMs. These arrangements are rarely transparent, leaving employers in the dark about the financial incentives influencing plan recommendations while patients continue to face rising drug costs and higher insurance premiums.
"Employers deserve to know that their consultants and brokers are providing independent, unbiased guidance—not recommendations influenced by hidden financial incentives.
"That is why I introduced, H.R. 7895, the PBM Kickback Prohibition Act. It would prohibit PBMs from paying kickbacks to brokers or consultants in exchange for steering health plans toward preferred PBMs. This is a key element of President Trump’s Great Healthcare Plan and will eliminate these opaque pricing tactics which will help lower health care costs for patients and employers.
"Today, I am offering an Amendment in the Nature of a Substitute to strengthen the bill and ensure PBMs cannot evade these prohibitions by simply calling the kickbacks something else. I urge my colleagues to vote yes on the ANS and the underlying bill."
