PBM Kickback Prohibition Act

This legislative proposal seeks to amend the Employee Retirement Income Security Act of 1974 (ERISA) by introducing a new prohibition against specific financial practices within the pharmacy benefit management sector. It directly targets the payment of kickbacks by pharmacy benefit managers (PBMs) to third parties involved in securing business from covered plans. The bill stipulates that for contracts involving pharmacy benefit management services, PBMs are forbidden from providing any direct or indirect compensation to brokerage firms, brokers, consultants, advisors, or other individuals for the referral of a covered plan's or health insurance issuer's business. This measure is designed to enhance transparency and prevent conflicts of interest in the selection of PBMs for employee benefit plans. The amendment will take effect for plan years beginning after the date of its enactment.