Anne McDonald Pritchett, founder of Pritchett Policy Associates, said on May 20 that pharmacy benefit manager (PBM) practices such as preferential formulary placement, rebate structures, and exclusive contracting are limiting patient access to biosimilar medicines in insurance plans. She said PBMs, rather than patents, represent the primary barrier to broader biosimilar adoption.
“PBMs are the problem not patents,” Pritchett said in a social media post. “PBMs use tactics like preferential formulary placement of branded biologics over biosimilars, complex rebate structures, and exclusive contracts to limit the inclusion of biosimilars in insurance plans.”
She said these practices restrict competition by steering coverage decisions toward higher-cost branded drugs rather than lower-cost alternatives.
The issue of biosimilar access is significant because lower-cost alternatives can reduce overall prescription drug spending when widely adopted. According to the Association for Accessible Medicines, FDA-approved generic and biosimilar medicines generated an estimated $445 billion in savings in 2023 and more than $3 trillion over the past decade.
The structure of the PBM industry has also drawn scrutiny from regulators. The Federal Trade Commission (FTC) has noted that the market is highly concentrated and often vertically integrated with insurers and pharmacy operations, giving PBMs significant influence over formularies, reimbursement rates, and patient access to medications.
From 2017 to 2022, the three largest PBMs marked up numerous specialty generic drugs dispensed through affiliated pharmacies by hundreds or thousands of percent—including medicines used for cancer and other serious conditions—generating more than $7.3 billion above estimated acquisition costs, according to the FTC. The commission also found that a larger share of high-markup commercial prescriptions—those exceeding $1,000 per fill—flowed through PBM-affiliated pharmacies, with dispensing patterns that may steer profitable prescriptions away from independent pharmacies and toward corporate-owned channels managing pharmacy benefits.
Pritchett Policy Associates is led by Anne McDonald Pritchett, PhD, who also serves as a senior associate with the Center for Strategic and International Studies’ Renewing American Innovation Project. Her work focuses on life sciences policy and innovation challenges.
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