Services for In-house Counsel
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PBM Negotiator for In-house Counsel
Overview
In-house counsel plays a vital role in protecting their organization from legal, financial, and fiduciary risks, particularly in the oversight of employee benefits and vendor agreements. Responsible for ensuring regulatory compliance and minimizing exposure to liability, in-house counsel is often at the forefront of negotiating Pharmacy Benefit Manager (PBM) contracts. With increasing scrutiny from regulators, including legislative efforts at both the state and federal levels to address PBM transparency, organizations must proactively reassess their PBM agreements to align with evolving legal and fiduciary obligations.
For in-house counsel, renegotiating PBM contracts is not just about cost containment—it is a crucial strategy for mitigating fiduciary risk, eliminating hidden fees, and ensuring contract terms prioritize transparency and accountability. By taking a proactive approach to PBM negotiations, counsel can safeguard their organization’s benefits plan against excessive costs, undisclosed pricing schemes, and compliance pitfalls. A well-structured PBM contract serves as a powerful mechanism for strengthening financial oversight, ensuring plan integrity, and reinforcing fiduciary protections. As regulatory oversight tightens and prescription drug costs continue to escalate, addressing PBM contract vulnerabilities remains a critical priority for in-house counsel.
Years of Experience
Our collective experience delivers consistent results.
Cases
Relevant matters and negotiations, prepared for all the possibilities.
Wins for In-house Counsel
Mitigating Fiduciary Risk
In-house counsel play a pivotal role in protecting their organizations from fiduciary liabilities associated with employee benefit plans, particularly in the oversight of Pharmacy Benefit Manager (PBM) agreements. Ensuring compliance with the Employee Retirement Income Security Act (ERISA) and other applicable regulations requires careful contract review and renegotiation. PBM agreements are often structured with hidden fees, opaque pricing models, and ambiguous rebate terms that can create significant fiduciary risks. Recent legislative initiatives—including federal and state-level regulations targeting PBM transparency—make it essential to scrutinize and revise PBM contracts. Our services help in-house counsel identify and address potential fiduciary risks in existing PBM agreements, ensuring compliance with evolving legal requirements while protecting the financial interests of the organization.
Ensuring Regulatory Compliance
The regulatory landscape surrounding pharmacy benefits is undergoing significant change, with increased legislative scrutiny aimed at curbing PBM abuses. New laws at both the federal and state levels seek to enforce greater transparency, prevent spread pricing, and ensure that rebates benefit plan sponsors rather than PBMs. In-house counsel must stay ahead of these regulatory shifts by ensuring that PBM agreements reflect updated legal requirements. Our expertise lies in analyzing existing PBM contracts to identify vulnerabilities, ensuring that they align with emerging laws and compliance mandates. We guide organizations in incorporating necessary contract provisions that enhance transparency, safeguard against legal exposure, and ensure compliance with new and forthcoming regulations.
Clarifying Roles and Responsibilities
Unclear contractual terms in PBM agreements can lead to misaligned expectations, operational inefficiencies, and costly disputes. Many PBMs operate with complex, non-transparent pricing structures that obscure critical cost components, making it difficult for plan sponsors to hold them accountable. Legislative efforts targeting PBM practices emphasize the importance of transparency in pricing and rebate structures. Our services focus on revising PBM agreements to explicitly define the roles and responsibilities of all parties, including detailed provisions on pricing methodologies, rebate pass-throughs, and claims adjudication. By establishing precise contractual obligations, we help in-house counsel mitigate risks associated with misinterpretation, excessive costs, and compliance failures.
Establishing Audit Rights
Robust audit rights are essential for ensuring that PBMs adhere to contractual terms, maintain transparency, and provide accurate cost reporting. In-house counsel must ensure that PBM agreements include strong audit provisions that allow for independent verification of pricing, rebates, and administrative fees. With increasing regulatory emphasis on PBM accountability, the ability to conduct comprehensive audits has never been more critical. Our approach involves strengthening PBM contracts with clear, enforceable audit clauses that specify scope, frequency, and access to detailed transaction data. These provisions empower organizations to hold PBMs accountable, identify discrepancies, and ensure that all negotiated savings and rebates are passed through as intended.
Limiting Indemnification Obligations
Indemnification clauses in PBM agreements determine the allocation of financial responsibility in the event of pricing disputes, compliance failures, or regulatory penalties. Many PBMs attempt to shift liability onto plan sponsors, leaving organizations exposed to financial and legal risks. Given the heightened regulatory focus on PBM practices, it is essential for in-house counsel to negotiate indemnification terms that fairly allocate responsibility and protect their organization from undue liability. Our services include a thorough review of indemnification provisions to ensure they are balanced, ensuring that PBMs are held accountable for their actions. We work to minimize unnecessary financial exposure for plan sponsors, ensuring that PBMs assume responsibility for their own compliance and operational obligations.
By addressing these critical areas, our services help in-house counsel renegotiate PBM agreements that comply with evolving regulations, enhance financial transparency, and protect the organization from excessive costs and legal risks. We provide the expertise needed to navigate the complexities of PBM contracts, ensuring that your organization’s pharmacy benefits are structured to maximize value, maintain compliance, and minimize fiduciary exposure.
