S. 3549 — PBM FAIR Act

This section amends the Employee Retirement Income Security Act of 1974 (ERISA) to deem pharmacy benefit managers (PBMs) as fiduciaries with respect to group health plans (i.e., ERISA welfare plans providing medical benefits) for specified prescription drug activities, including (1) maintaining prescription drug provider networks or formularies through drug purchases from manufacturers, distributors, or other parties; and (2) negotiating or aggregating prescription drug rebates, fees, or discounts; processing and paying prescription drug claims; or performing prescription drug utilization review and management. (Thus, PBMs must adhere to ERISA fiduciary duties of prudence and loyalty in these activities.) The section further (1) requires PBMs and third-party administrators to disclose direct and indirect compensation for covered services, including prescription drug networks, formularies, drug purchases, provider networks, claims processing, recordkeeping, and reimbursement rate negotiations; (2) prohibits PBMs (as covered service providers) from serving as the responsible plan fiduciary for such disclosures, except when a PBM sponsors its own employee plan; (3) bars indemnification of PBM fiduciaries for ERISA breaches, voiding any violating contract provisions as against public policy; and (4) makes a technical amendment to service provider disclosure rules. The amendments apply to plan years beginning at least 12 months after enactment.