Conservatives are raising concerns about a rule proposed by the U.S. Department of Labor (DOL) purportedly aimed at boosting pharmacy benefit manager (PBM) transparency. In reality, it will add unnecessary and duplicative government red tape on top of transparency reforms that President Trump already delivered into law — saddling employers, families and taxpayers with higher costs and a system made more complicated, not less.
The proposal would layer new mandates into the prescription drug marketplace as reforms passed as part of the Consolidated Appropriations Act (CAA) have yet to take effect. More government red tape will not lower health care costs, and DOL should rescind the proposed rule.
Ike Brannon, senior fellow at the Jack Kemp Foundation, warned in RealClearMarkets that the proposal will force employers to build duplicative compliance systems:
“That redundancy would be a reason for indifference if it were free, but it is not. Most of the CAA’s provisions phase in over the next several years, with the central requirements taking effect for plan years beginning in 2028 and 2029; the DOL rule starts sooner and would impose its own categories, formats, and timing.
“As a result, employers will be forced to sign up to build compliance infrastructure twice: once to the DOL’s near-term specifications, and again — soon after — to the broader, differently structured federal standard that supersedes much of it.”
Layal Bou Harfouch, a policy analyst at the Reason Foundation, wrote in The Daily Economy that the proposal will create a parallel compliance structure on top of the framework Congress recently enacted:
“Transparency itself is not the problem. The problem is that Congress already established a broad federal transparency framework through the CAA just months ago. Instead of allowing those reforms to be implemented and evaluated, the DOL is building a parallel compliance structure with separate timelines, reporting expectations, and disclosure obligations.”
Lawrence J. Spiwak, president of the Phoenix Center for Advanced Legal & Economic Public Policy Studies, argued in The Regulatory Review that Congress has already established a framework for PBM transparency and that DOL should respect Congress’s authority rather than impose its own competing regime:
“The CAA represents a clear statement by Congress on exactly how the federal government should regulate transparency in the PBM industry. Congress could have codified—and even expanded—the Labor Department’s approach but specifically refused to do so … Congress has said its piece about what it wants for PBM reform. The Labor Department needs to put down its pen.”
Jack Verrill wrote in the Washington Examiner that the DOL’s proposed rule could complicate the new transparency framework before it has had a chance to work:
“Whatever your opinions are of America’s health insurance industry, the DOL’s proposed rules will raise costs and lower competition in an already consolidated healthcare market. Transparency might be the goal, but it won’t be the result … This excessive bureaucracy is a recipe for slow-moving insurance claims and higher administrative costs on both sides, sure to be passed on to consumers and taxpayers alike.”
Tyler Curtis explained in DC Journal that requiring the same information under different reporting regimes could increase compliance costs without providing additional transparency:
“Too much of a good thing can be a bad thing. There are diminishing returns to making more information public, especially if the reporting requirements are redundant … When the government artificially adds substantial compliance costs, it makes it more difficult for small companies to compete. To help insurers and patients reap the full benefits of better price transparency, the Labor Department should rescind its proposal and allow time for the CAA to take effect.”
Alex Rosado argued in American Thinker that the DOL proposal is nothing more than duplicative regulation that would undermine competition:
“PBM reform should champion employers, patients, and taxpayers. It still can, if the DoL rescinds its proposal, substantially realigns it to fit the CAA’s scope, or lets HHS run the show. In its current state, duplicative and extra regulation serves no greater purpose. It stifles the spirit of competition and choice that boosts small businesses and plans.”
