Pharmacists United for Truth and Transparency said that pharmacy benefit managers (PBMs) are the primary driver of high drug prices in the United States, emphasizing how PBMs profit from negotiated savings.
"PBMs have been identified in numerous independent studies and investigative reports as the primary driver of high drug prices in the U.S," said United for Truth and Transparency. "We are the only country that utilizes PBMs, middlemen who promise to 'negotiate' lower drug prices while being allowed to take a cut of the so-called savings as part of a legalized kickback revenue scheme called 'safe harbor protection'. If the Trump Administration is serious about dramatically reducing drug prices for Americans, we urge Secretary Kennedy and Directors Oz and Makary to focus on eliminating the pay-to-play payments the vertically-integrated PBM middlemen currently get in exchange for including manufacturer's drugs on patient plan formularies."
Pharmacy benefit managers serve as third-party administrators of prescription drug programs for health insurers, self-insured employers, and government agencies. They negotiate with drug manufacturers to secure discounts and rebates on medications, manage pharmacy networks, and process prescription drug claims. Additionally, PBMs provide services such as medication therapy management and mail-order pharmacy services.
According to a Federal Trade Commission (FTC) report, the "Big 3 PBMs"—Caremark Rx, LLC (CVS), Express Scripts, Inc. (ESI), and OptumRx, Inc.—marked up numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent, with many others marked up by hundreds of percent. These significant markups generated more than $7.3 billion in revenue from dispensing drugs at prices far exceeding the estimated acquisition costs from 2017 to 2022. The report also identified the practice of spread pricing, where PBMs charge health plans a higher price for a drug than they reimburse to pharmacies, keeping the difference as profit.
The FTC report further highlighted that rebate agreements between PBMs and drug manufacturers may incentivize higher list prices for medications. It also cited PBM fees and reimbursement rates as factors threatening the financial stability of small pharmacies, potentially reducing patient access to essential medications. Patients in affected areas may face higher out-of-pocket costs and fewer options for obtaining necessary prescriptions.
Pharmacists United for Truth and Transparency is an advocacy organization aiming to expose the role of PBMs in increasing drug costs while supporting legislative efforts to reform prescription pricing practices. The organization actively campaigns for transparency and fair practices within the pharmacy industry.
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