Phamacy Benefit Manager (PBM) Transparency and Fiduciary Standards
Thursday November 20th, 2008
Model Policy
The Model Policy follows the Maine law1, the first such law enacted in the country, which has been upheld by the federal courts as constitutional and within the authority of the state.2 The Model PBM Policy requires that PBMs act as fiduciaries for their clients and adhere to certain specific duties. For example, they must disclose conflicts of interest, disgorge profits from self-dealing, and disclose to the covered entities certain of their financial arrangements with third parties. Transparency and a fiduciary duty are valuable tools for buyers to prevent fraud and deception and help market forces to work in the interest of lowering prices to end users of medicines. Violations of the law become violations of a state’s unfair trade practices or consumer protection laws, which generally provide for treble damages for violations and give authority to the Attorney General to bring actions on behalf of the state.

PDF icon    Model Policy: PBM Transparency and Fiduciary Standards (24 KB PDF)
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Sharon Treat
Learn more about Pharmacy Benefit Managers

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