New Reporting on Pharmacy Benefits and Drug Costs Required

Under a new federal law, self-funded ERISA and non-ERISA (including non-federal governmental) group health benefit plans and health insurers offering group or individual health insurance coverage and the U.S. Department Health and Human Services (HHS) are required report on pharmacy benefits and drug costs. 

Here are key takeaways about the new reporting requirements contained in the Consolidated Appropriations Act, 2021 (CAA), which became effective on December 27, 2020. 

• Reports from self-funded health benefit plans: The law requires the first report to be submitted to the Secretaries of Health and Human Services (HHS), Labor and the Treasury no later than Dec. 27, 2021, and subsequent reports by June 1 each following year.
• Public report: The law requires the HHS Secretary to make the first public report available on the HHS website no later than June 2023.

Reports from Group Health Benefit Plans and Insurers
The reports from plans and insurers will identify the following information:

• Beginning and end dates of the plan year
• Number of enrollees
• Each state in which the plan or coverage is offered
• The 50 brand prescription drugs most frequently dispensed by pharmacies for claims paid by the plan or coverage and the total number of paid claims for each such drug
• The 50 most costly prescription drugs with respect to the plan or coverage by total annual spending and the annual amount spent by the plan or coverage for each such drug
• The 50 prescription drugs with the greatest increase in plan expenditures over the plan year preceding the plan year that is the subject of the report and, for each such drug, the change in amounts expended by the plan or coverage in each such plan year
• Total spend on healthcare services by such group health plan or health insurance coverage, broken down by the types of costs, including:
  • Hospital costs, healthcare provider, and clinical service costs, for primary care and specialty care separately
  • Costs for prescription drugs
  • Other medical costs, including wellness services
• In addition to types of costs, spending on prescription drugs must be broken down by health plan or coverage and enrollees spend.
• The average monthly premium paid by employers on behalf of enrollees, as applicable, and paid by enrollees
• The impact on premiums by rebates, fees, and any other compensation paid by drug manufacturers to the plan or coverage or its administrators or service providers, with respect to prescription drugs prescribed to enrollees in the plan or coverage, including:
  • The amounts paid for each therapeutic class of drugs
  • The amounts paid for each of the 25 drugs that yielded the highest amount of rebates and other compensation under the plan or coverage from drug manufacturers during the plan year
• Any reduction in premiums and out-of-pocket costs associated with rebates, fees, or other compensation described in the preceding bullets

Public Reports
The HHS secretary is required to issue a public report available on its website on prescription drug reimbursements under group health plans and group/individual health insurance coverage, prescription drug pricing trends, and the role of prescription drug costs in contributing to premium increases or decreases under such plans or coverage.

The CAA requires such information to be aggregated so that no drug or plan specific information will be made public. The first public report will be issued no later than June 2023, and subsequent reports issued biannually. No confidential information or trade secrets will be included in the public report. 

Luminare Health anticipates federal agencies will issue regulations containing further guidance. We will share additional information as it becomes available.