By NextBestFitRegulate PBMs: delink pay from drug prices, ban spread pricing
PBMs are paid flat fees, must pass rebates through, and may not own pharmacies they steer patients to.
Interim rules until public drug purchasing starts.
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Regulate PBMs: delink pay from drug prices, ban spread pricing
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Delink PBM pay from drug prices (flat fees)
- Ban spread pricing
- Require 100% rebate pass-through
- Ban PBM ownership of pharmacies they steer patients to
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
What it fixes
- Pharmacy benefit managers profit from opaque drug pricing
Flat PBM fees, rebate pass-through, and restrictions on ownership of pharmacies receiving steered patients help independent pharmacies. The approach retains private drug plans at low government cost.
What it creates or worsens
- Requires difficult enforcement
PBMs may adapt to flat-fee and rebate rules by introducing new fees.
- Takes years, or money up front, before it pays off
Enforcing rules against dominant PBM firms is slow.
Who's affected
Who gains
- People with unaffordable deductibles or coinsurance
- Pharmacy benefit managers profit from opaque drug pricing: List-price-based coinsurance exposes them to higher drug prices.
- Community pharmacies
- Pharmacy benefit managers profit from opaque drug pricing: PBM-owned pharmacies dominate specialty drugs.
- Employers
- Pharmacy benefit managers profit from opaque drug pricing: Opaque spread pricing hides prescription benefit margins.
Who loses
- Pharmacy benefit managers and their pharmacies
- Pharmacy benefit managers profit from opaque drug pricing: Rebates and opaque pricing generate revenue for benefit managers and their insurer parents.
- Health insurers, brokers, and their shareholders
- Pharmacy benefit managers profit from opaque drug pricing: Rebates and opaque pricing generate revenue for benefit managers and their insurer parents.
- Drug and device makers
- Pharmacy benefit managers profit from opaque drug pricing: Rebates buy formulary placement for their products.
Where it has been tried
- Arkansas (2025): Law banning PBMs from owning pharmacies in the state; a federal court blocked it before it took effect.Sources: Federal Trade Commission (2025)