Fiduciary PBM Obligations
- Act in the best interest of plan participants — not in the PBM's financial interest
- Disclose all compensation — no undisclosed revenue streams
- Avoid conflicts of interest — no ownership of pharmacies that benefit from formulary decisions
- Prudent expert standard — manage the pharmacy benefit with the care of a prudent expert
- Loyalty — act solely in the interest of plan participants
Legal Protection
A fiduciary PBM contract provides the strongest legal protection for employer fiduciaries. When the PBM accepts fiduciary status, the employer can rely on the PBM's fiduciary obligation to act in the plan's best interest. If the PBM fails to act as a fiduciary, the employer has a legal claim against the PBM — not just a contract claim.
Fiduciary PBM Availability
IQ Insight
Few PBMs accept fiduciary status — the Big Three (CVS Caremark, Express Scripts, OptumRx) do not. Independent and transparent PBMs — Capital Rx, SmithRx, Navitus — are more likely to accept fiduciary status. When evaluating PBMs, ask specifically whether they will accept ERISA fiduciary status in the contract. A PBM that refuses is signaling that they are not willing to be held to the fiduciary standard.