The Department of Labor’s proposal would force pharmacy benefit managers to disclose drug pricing details to employers and open their books to audits. More than 500 comment letters show PBMs and insurers fighting the rule, while some employers and startups back it and drugmakers offer mixed support.

• DOL's proposed rule would force PBMs to disclose rebates, fees, and spread pricing to employers and submit to audits
• Over 500 comment letters split along predictable lines: PBMs/insurers oppose it as exposing confidential contracts, while Cost Plus Pharmacy and business groups support it as curbing hidden markups
• Drugmakers back reining in PBMs generally but want the disclosure rules narrowed to administrative fees, excluding drug-specific rebate data that competitors could exploit
• Rule could shift negotiating power from PBMs to employers, though employers would then face more complex data to manage in contract talks

This article highlights the legal risks of Pharmacy Benefit Manager (PBM) contracts for employers due to new fiduciary duties. It introduces RootTrust, a platform that analyzes these contracts, providing clarity and compliance to protect companies from financial and legal pitfalls.

• New fiduciary duty laws are shifting legal liability for opaque PBM contracts from PBMs onto employers themselves.
• RootTrust uses AI to translate dense PBM contract legalese into risk scores and flag problematic clauses.
• It positions itself as an independent auditor rather than a PBM competitor, monetizing via consulting firm subscriptions and one-time fees for self-insured employers.
• Its data moat comes from accumulating analyzed contracts over time, improving its ability to detect risky contract language.

Mark Cuban and Optum CEO Patrick Conway engaged in a heated discussion about drug prices and pharmacy benefit managers, highlighting their differing views on how to reform the healthcare system. Cuban argued for breaking up large insurance companies and criticized the lack of transparency in PBM contracts, while Conway emphasized the need to tackle high hospital and pharmaceutical costs. Both acknowledged the other's contributions but remained divided on the root causes of high drug prices and solutions.

• Cuban challenged Conway to name a specific Optum customer he could call to verify claims about PBM contract transparency
• Cuban advocates breaking up large insurance companies as a fix, blaming opaque PBM contracts for inflated drug prices
• Conway countered that high hospital and pharmaceutical costs, not just PBMs, are the core drivers of the problem
• Despite the confrontational exchange, both men acknowledged each other's contributions while disagreeing on root causes and solutions