Jan 29 (Reuters) - The U.S. Department of Labor's Employee Benefits Security Administration on Thursday issued a proposed rule aimed at increasing transparency around fees and compensation collected by pharmacy benefit managers.

The move, which follows a directive under President Donald Trump's executive order on lowering drug prices, seeks to clarify PBM business practices that affect employer-sponsored health plans covering millions of Americans.

PBMs — including units of CVS Health CVS.N, Cigna CI.N and UnitedHealth UNH.N — negotiate drug prices and manage formularies for health plans, but have faced scrutiny from U.S. officials over business practices and a lack of transparency.

The department said PBMs often do not disclose the full scope of payments they receive, leaving plan fiduciaries unable to assess whether compensation is reasonable.

"This action will allow employers to see the full extent of the fees charged by pharmacy benefit managers, enabling them to negotiate a better deal for themselves and American workers," said Deputy Secretary Keith Sonderling.

The proposed regulation would require PBMs to disclose rebates and other payments from drug manufacturers, compensation collected when plans pay more for a drug than pharmacies are reimbursed, and funds recouped from pharmacies.

Fiduciaries would also gain new authority to audit PBM disclosures and receive additional protections if PBMs fail to comply, the department said.

(Reporting by Siddhi Mahatole in Bengaluru; Editing by Alan Barona)

((siddhi.mahatole@thomsonreuters.com;))