PBMs
Olivia C. Welter, PharmD
For years, the pharmacy profession has cited PBMs as a primary reason for pharmacy closures and increased health care costs. A lawsuit, along with a report from the FTC and testimonies at a federal subcommittee hearing, provide substantial backing for these claims.
FTC actions
Since June 2022, FTC has been investigating PBMs and their impact on access and affordability of medicine. FTC announced that it would specifically be looking for information about PBM fees and clawbacks, patient steering methods, unfair auditing practices, lack of transparency, prior authorization prevalence, specialty drug policies, and more.
After a couple years of initial investigations, in September 2024, FTC sued the “Big Three” PBMs: CVS Health’s Caremark, Cigna’s Express Scripts, and United Health Group’s Optum. The lawsuit alleged the Big Three artificially inflated insulin prices using anticompetitive practices to increase PBM profits at the expense of at-risk patients. As of March 2025, the lawsuit is still pending.
FTC released an interim staff report in January 2025 that focused on specialty drug pricing and profits by PBMs. The report indicated the Big Three PBMs have significantly marked up prices on specialty generic drugs for cancer, HIV, and other illnesses, sometimes by thousands of percent. Additionally, FTC found that the Big Three PBMs reimbursed their affiliated pharmacies more than unaffiliated pharmacies for dispensed generic specialty medications, putting more money back into the pockets of the PBMs’ parent companies and less into smaller independent pharmacies. The report also revealed that the Big Three PBMs brought in over $7.3 billion in dispensing revenue in excess of estimated acquisition cost during the study period. Another finding highlighted in the report was the extent of spread pricing within the Big Three PBMs; they generated approximately $1.4 billion in income during the study period by charging plan sponsors more than they reimbursed pharmacies for dispensing generic specialty medications.
Health subcommittee hearing
The U.S. House Energy and Commerce Committee Subcommittee on Health held a hearing on February 26, 2025, to address predatory PBM practices and hear testimony from health care partners.
Reps. Earl L. “Buddy” Carter and Diana Harshbarger, both pharmacists, serve on the subcommittee. They each provided statements alongside other subcommittee members emphasizing how patients ultimately suffer by paying higher prices for prescription drugs, being stripped of the power to choose their own pharmacy, and being stuck in pharmacy deserts where local independent pharmacies have gone out of business.
Hugh Chancy, a pharmacist and former president of National Community Pharmacists Association, submitted written comments to the subcommittee. Chancy’s comments focused on explaining PBMs’ vertical integration and how PBMs use spread pricing to profit off Medicaid and Medicare patients. Chancy urged subcommittee members to continue working in a bipartisan manner to pass PBM reform legislation and level the playing field for community pharmacists.
Various representatives on the subcommittee said that PBM reform is a bipartisan issue with both Democrats and Republicans showing interest in passing PBM-related bills. Rep. Brett Guthrie, chairman of the full committee, said that such bills could be popular enough to pass through Congress outside of the budget reconciliation process.
Trump administration and PBM reform
The Trump Administration has been vocal about its intent to implement PBM reform. Following his election, President Donald Trump committed to “knock out” PBMs, referring to PBMs as the middlemen in the health care system.
Additionally, Robert F. Kennedy, Jr. said in his Senate Finance Committee hearing that the administration plans to roll out federal PBM reform during Trump’s term as president. Andrew Ferguson, Trump’s pick for FTC chair, aligns with the administration on PBM reform and issued a statement in January 2025 that he is committed to completing a final report on FTC’s investigation into PBMs. ■