WASHINGTON, D.C., April 22, 2026 – Today, James Gelfand, President and CEO of The ERISA Industry Committee (ERIC), testified before the U.S. House of Representatives Education and Workforce Committee’s Subcommittee on Health, Employment, Labor, and Pensions at a hearing titled “Profits Over Patients: The PBM Business Model Under Scrutiny.” The hearing focused on core issues affecting prescription drug affordability and industry reforms to prevent practices like the use of kickbacks or referral fees to steer business to select vendors.
During his testimony, Gelfand shared that ERIC member companies pay 75 to 80% of health care costs for employees and their families. While he praised action taken earlier this year to require transparency and improve the practices of pharmacy benefit managers (PBMs), he cautioned that severe conflicts of interest exist between brokers and consultants hired by employers and other plan sponsors to help them select and manage PBMs.
“When PBMs pay brokers or consultants to steer employer business, it undermines the trust employers place in the advice they receive. Hidden fees, vendor kickbacks, and unfair competition between vendors leads to higher drug costs for working families – the current system prioritizes profits over patients,” said Gelfand. “The lack of transparency makes it difficult for plan sponsors to ensure that their decision-making isn’t manipulated by PBMs and their industry partners. Meaningful reform is needed to close these gaps, increase accountability, and ensure that vendor selection and plan design maximize value for employers and patients—not the next generation of middlemen.”
Gelfand specifically applauded “The PBM Kickback Prohibition Act” (H.R. 7895), introduced by Chairman Rick Allen (R-GA), as a way to drive greater accountability across the drug supply chain. The legislation would prohibit PBMs from providing kickbacks or referral fees to intermediaries in exchange for steering business to them. This week, ERIC led a letter to Congress with more than 50 employer and patient organizations in support of the legislation.
Gelfand added, “While important progress has been made, the reality is that prescription drug costs account for roughly 24 cents of every dollar spent by a health plan. More affordable prescription drugs are within reach, but only if policymakers build on current transparency and reform efforts – particularly by addressing systemic inefficiencies, eliminating conflicts of interest, and ensuring accountability across the entire drug supply chain.”
ERIC has made prescription drug access and affordability a central feature of its work and has supported a broad set of actions to close outstanding loopholes, address gaps, and ensure patients and plan sponsors realize the full value of these reforms. ERIC supports increasing transparency, reducing anti-competitive behavior, accelerating access to lower-cost options such as biosimilars, and applying full fiduciary standards to PBMs. ERIC also encourages reforms that bring visibility into wholesaler margins, GPO fee structures, and the RFP processes used by employers.
Link to ERIC’s testimony from James Gelfand here.
