Price Transparency Rules

Federal price transparency requirements, initially focused on hospitals and health insurers, are expanding to include pharmacy benefits. These rules are creating new data access opportunities for employers and shifting the information asymmetry that has historically favored PBMs.

Transparency in Coverage (TiC)

The Transparency in Coverage final rule requires health plans and issuers to make detailed pricing information available to the public. Machine-readable files must include negotiated rates with in-network providers, allowed amounts for out-of-network providers, and prescription drug pricing data. These files, while technically complex, provide unprecedented visibility into the actual prices paid for prescription drugs across plans and PBMs.

Prescription Drug Reporting

The Consolidated Appropriations Act of 2021 introduced new prescription drug reporting requirements for group health plans. Plans must report the 50 most costly drugs, the 50 drugs with the greatest year-over-year cost increase, total spending on prescription drugs, rebate amounts, and the impact of rebates on premiums and cost sharing. These reports are submitted to federal agencies and provide a standardized framework for pharmacy cost analysis.

What Employers Can Do Now

The expanding transparency landscape gives employers new tools for managing pharmacy benefits. Machine-readable files from competitor plans can be analyzed to benchmark your PBM's negotiated rates. Prescription drug reporting data provides standardized metrics for evaluating cost trends. Federal reporting requirements create documentation that can support audit findings and contract renegotiations.