PBM Kickback Prohibition Act

Regulatory or Legal Changes Top 1

Ban PBM Referral Payments to Brokers and Consultants

Amends the Employee Retirement Income Security Act of 1974 (ERISA) section 408(b)(2)(B) to prohibit pharmacy benefit managers (PBMs) that contract with covered employee benefit plans from paying any compensation — directly or indirectly — to brokers, consultants, advisors, or other individuals for referring the plan's or health insurance issuer's business to that PBM.

• Population Scope Medium Directly affects PBMs, ERISA-covered plan sponsors, health insurance issuers, and the broker/consultant intermediaries who receive referral fees — a substantial but sector-specific commercial population well under 10% of individuals but spanning a broad class of regulated entities nationwide.
• Budgetary Magnitude Low No funds are authorized, appropriated, or obligated; the bill imposes a conduct prohibition only.
• Legal / Regulatory Depth High Creates a new statutory prohibition with binding effect — categorical bar on referral-based compensation — enforceable under existing ERISA mechanisms against a defined class of service providers.
• Degree of Discretion Granted Low The prohibition is categorical ('no amount of compensation may be paid'), leaving agencies and covered parties no discretion to grant exceptions or vary its application.
• Implementation & Enforcement Burden Medium Relies entirely on existing Department of Labor (DOL) oversight and fiduciary liability structures — no new enforcement infrastructure is created, but covered plans and PBMs must audit and restructure existing compensation arrangements to achieve compliance.
• Temporal Commitment High Persists indefinitely until Congress acts to repeal or amend it.