Prescription or proscription? The general failure of attempts to litigate and legislate against PBMS as "fiduciaries," and the role of market forces allowing PBMS to contain private-sector prescription drug prices.

Pharmacy benefit managers (PBMs), which generally administer prescription drug benefits as one component of an employer's or other sponsor's health insurance plan, have come under fire in recent years for turning profits at a time when consumer advocates and employers are struggling to contain the costs of health insurance and prescription drugs. Lawsuits alleging that PBMs are breaching certain fiduciary duties to the health plans they serve, however, have failed for the most part on grounds that PBMs are not "fiduciaries" under the Employee Retirement Income Security Act (ERISA). Moreover, states' attempts to regulate PBMs through legislation imposing fiduciary obligations and other related requirements have also generally failed for many different reasons. This Article examines the PBM industry, recent legal developments concerning PBMs' status as ERISA "fiduciaries", the arguments being made for and against stricter regulation of PBMs' business practices, and why litigation and legislation attempting to impose fiduciary obligations upon PBMs have generally failed. The authors conclude that it is market forces and competition, rather than litigation or legislation, that will effectively motivate PBMs to play a role in the cost containment of prescription drugs in the years ahead.