New Employer Drug Cost Reporting Mandate Will Pose Significant Challenges

Washington, DC – The ERISA Industry Committee (ERIC), along with HR consulting and asset management firm Mercer, responded to the U.S. Departments of Health and Human Services, Labor, and the Treasury, and the Office of Personnel Management’s Request for Information (RFI) regarding new employer requirements related to reporting on pharmacy benefits and prescription drug costs.

ERIC’s and Mercer’s comments highlight the challenge inherent in attempting to collect information from employers, who are unlikely to have immediate access to prescription drug cost, coupon, and rebate information. More often, this information lies with pharmacy benefit managers (PBMs), insurance carriers acting as third-party administrators (TPAs), and sometimes pharmaceutical manufacturers. Additionally, employers raised concerns that the new rule comes as employers are expected to be already undertaking significant new administrative burdens to comply with both the Transparency in Coverage rule and the No Surprises Act rules that both come into effect in January 2022. As such, the RFI response requests that the Agencies consider delaying the final rule.

“Employers work hard to provide the best health care benefits to their employees, and they engage with numerous different vendors to build and administer their suite of health benefits. Much of the information called for in this RFI is not in the hands of the employer. It is owned and often kept as proprietary by PBMs, insurers, and pharmaceutical companies. The Tri-Agencies should either collect this information directly from those vendors or overtly require the vendors to supply this information to employers. Otherwise, it will be impossible for employers to comply,” said James Gelfand, Senior Vice President of Health Policy, ERIC.

Employers do not have total access to the information required by the new rule. They would be reliant on PBMs to provide information about prescriptions filled through the pharmacy benefit. In contrast, drugs administered in an in-patient setting (like a hospital or physician’s office) are likely to be under the auspices of a medical plan benefit, meaning that an insurance company most likely keeps the information. And when a patient uses a coupon or copay assistance program, the only reliable source on where that money comes from and goes is the pharmaceutical company that pays it. Additionally, even if the Agencies do mandate transparency requirements on these vendors, it will take time for employers to collect and organize this information, necessitating a delay in implementing the rule.

ERIC and Mercer also raised concerns about duplicative reporting requirements, including drug cost information already required under the Transparency in Coverage rule. The RFI requests that the Agencies do an audit to confirm which information will already be collected elsewhere and streamline the rules accordingly.

“ERIC implores the Agencies to work with employers to ensure the correct information is collected and done so in a way that is practical, efficient, and enforced with good faith compliance,” said Gelfand.

Click here to read ERIC’s and Mercer’s full comments.

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All media inquiries to The ERISA Industry Committee should be directed to:

Kelly Broadway, 202.627.1918, kbroadway@eric.org

About The ERISA Industry Committee
ERIC is a national advocacy organization that exclusively represents large employers that provide health, retirement, paid leave, and other benefits to their nationwide workforces. With member companies that are leaders in every sector of the economy, ERIC advocates on the federal, state, and local levels for policies that promote flexibility and uniformity in the administration of their employee benefit plans.