In an era of intense political polarization, Republicans and Democrats are uniting to target pharmacy benefit managers (PBMs) over rising healthcare costs. Federal lawmakers passed the Consolidated Appropriations Act of 2026 to overhaul PBM compensation, while the FTC reached settlements with Express Scripts and CVS Caremark. Meanwhile, states like Tennessee are moving to ban PBMs from owning retail pharmacies, prompting fierce resistance and lawsuits from industry giants like CVS Health.
Bipartisan push to ban pharmacy ownership
- ▪U.S. Representative Diana Harshbarger, a Republican from Tennessee, has sponsored a federal bill to ban pharmacy benefit managers from owning brick-and-mortar pharmacies.
- ▪The federal legislative push to ban pharmacy benefit managers from owning pharmacies has united politically diverse lawmakers, including Senators Elizabeth Warren and Josh Hawley.
Tennessee's pharmacy ownership ban and backlash
- ▪Tennessee passed a law to ban companies that own pharmacy benefit managers from also owning brick-and-mortar pharmacies, though the ban is challenged in court and scheduled to take effect in 2028.
- ▪An analysis by Tennessee state legislative researchers concluded that the state's pharmacy benefit manager ownership ban could drive up healthcare costs in the short term.
- ▪CVS Health launched a $7 million television advertising campaign in Tennessee and sent text messages to customers warning that the state's pharmacy benefit manager ownership ban would force it to close all 134 of its pharmacies in the state.
Consolidated Appropriations Act of 2026 reforms
- ▪The Consolidated Appropriations Act of 2026 requires commercial market pharmacy benefit managers to pass through 100% of rebates to payers and comply with new transparency reporting rules enforced by CMS.
- ▪The Consolidated Appropriations Act of 2026 includes an any-willing-pharmacy provision that weakens pharmacy benefit managers' leverage to exclude pharmacies from Medicare Part D networks, which Ge Bai warns could lead to higher pharmacy prices.
- ▪The Consolidated Appropriations Act of 2026 overhauls pharmacy benefit manager compensation in Medicare Part D by shifting payments from drug list prices and rebates to flat administrative fees.
FTC settlements with major pharmacy benefit managers
- ▪The Federal Trade Commission reached settlement agreements with Express Scripts and CVS Caremark following an investigation into practices that contributed to high insulin costs.
- ▪Rachel Sachs noted that the Federal Trade Commission settlements do not fully address private-label biosimilars, which major pharmacy benefit managers are increasingly developing or marketing through relationships with manufacturers.
- ▪Washington University in St. Louis law professor Rachel Sachs stated that the Federal Trade Commission settlements with major pharmacy benefit managers leave opportunities for employers to adopt alternative offerings that bypass the new restrictions.
Bipartisan campaign messaging
- ▪Republicans and Democrats are increasingly uniting around populist, anti-industry messaging that targets pharmacy benefit managers, insurers, and drug companies to address rising healthcare costs.
- ▪During the 2026 midterm campaigns in Iowa, Republican Ashley Hinson and Democrat Josh Turek both adopted populist messaging targeting health insurance companies and pharmacy benefit managers.
State actions against PBMs
- ▪Every U.S. state has imposed restrictions on pharmacy benefit managers in recent years.
- ▪Attorneys general from nearly 40 U.S. states and territories wrote a letter to congressional leaders arguing that horizontal consolidation and vertical integration have turned pharmacy benefit managers into market-dominating behemoths.
Analysis of federal reforms
- ▪Johns Hopkins University professor Ge Bai stated that patients may not see immediate reductions in out-of-pocket drug costs under new federal reforms because patient cost sharing remains based on drug list prices rather than net prices after rebates.
- ▪Johns Hopkins University professor Ge Bai warned that pharmacy benefit managers might negotiate smaller rebates under the new federal rules, potentially putting upward pressure on premiums.
Debatable claims
- ▪Federal PBM reforms will fail to lower out-of-pocket drug costs for patients
- ▪Congress should ban pharmacy benefit managers from owning brick-and-mortar pharmacies
- ▪The FTC settlements with major PBMs leave too many loopholes to lower drug costs
- ▪Weakening PBM leverage over Medicare networks will lead to higher pharmacy prices
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