Washington, D.C., October 2, 2024 – Today, The ERISA Industry Committee (ERIC) released the following statement on Governor Gavin Newsom’s (D-CA) veto of SB 966, a bill regulating pharmacy benefit managers (PBMs). While ERIC supports reform of PBMs, ERIC had previously cautioned lawmakers and Governor Newsom that the CA legislation could overstep state authority by directly impacting the design and administration of plans covered under the Employee Retirement Income Security Act (“ERISA”). The statement is attributable to Dillon Clair, Director of State Advocacy, ERIC.
“In Governor Newsom’s veto message, he called on policymakers to do more to increase access and affordability for prescription drugs, a goal that ERIC and its member companies share. We’re all in this together and, ERIC believes that reform and regulation of today’s PBM industry requires federal solutions that can complement state efforts.”
ERIC continues to call on Congress to enact strong PBM transparency and accountability reforms this year, including:
- Providing for comprehensive PBM transparency.
- Banning so-called “spread pricing.”
- Requiring 100% pass-through of rebates and payments from drug manufacturers.
- Applying fiduciary standards to PBMs, in the same way that they apply to employers.
In addition to an issue brief released in September detailing the need to apply fiduciary standards to PBMs, support for reforming PBM practices has broad support from stakeholders in the employer community and bipartisan support in Congress.
- A May 2023 letter from 30 employer groups urged Congress to take meaningful action to implement transparency, accountability, and reform in the PBM industry.
- A September 2023 EmployersRX letter reinforced key PBM reforms including banning spread pricing, transparency, rebate passthrough, and holding PBMs accountable the same as employers.
- A November 2023 letter from EmployersRX and 50 other organizations representing employers, patients, and a wide range of industry sectors, called on Congress to pass strong PBM reforms.
- A June 2024 employer statement echoed this message and keeping the issue front of mind for Congressional action.
- A September 2024 letter from ERIC and the Association for Accessible Medicines (AAM) and its Biosimilars Council urged Congress to enact meaningful legislation to address the harmful practices utilized by PBMs.
ERIC is a national advocacy organization exclusively representing the largest employers in the United States in their capacity as sponsors of employee benefit plans for their nationwide workforces. With member companies that are leaders in every economic sector, ERIC is the voice of large employer plan sponsors on federal, state, and local public policies impacting their ability to sponsor benefit plans. ERIC member companies offer benefits to tens of millions of employees and their families, located in every state and city across the country.