State attorneys general ask Congress to bar PBMs from owning pharmacies

Key takeaways

• State attorneys general argue that PBMs owning pharmacies creates conflicts of interest and inflates drug prices, urging Congress to prohibit PBMs and their affiliates from owning or operating pharmacies to restore fair competition.

• Critics claim PBMs manipulate the drug supply chain, prioritizing shareholder profits over patient care and disadvantaging independent pharmacies, despite being originally intended to lower drug costs.

• PBMs maintain they help lower prices, but the coalition of 39 attorneys general contends that legislative action is needed to prevent anti-competitive practices and improve patient access to affordable medications.

A coalition of state attorneys general are pressing Congress to prohibit Pharmacy Benefit Managers (PBMs) and their affiliates from owning or operating pharmacies, saying that would help reduce prescription drug costs.

This argument has been going on for years. A Pharmacy Benefit Manager – also known as a PBM – is a third-party administrator that manages prescription drug benefits on behalf of health insurers. As such, PBMs play a critical role in the healthcare system by influencing drug pricing, access, and reimbursement.

Critics have long argued that PBMs keep drug prices higher than they should be. The Pharmaceutical Care Management Association, an industry group representing PBMs, counters that its mission is just the opposite, to help patients get lower drug prices. It recently called on drug companies to lower prices.

But 39 state attorneys general argue it isn’t working out that way. In a letter to Congress, the state officials urge legislative action to “restore fair competition.”

“Pharmacy Benefit Managers were created to reduce drug costs, but they’ve instead abused their position to enrich themselves at the expense of patients,” said Missouri Attorney General Andrew Bailey. “This is legalized profiteering—PBMs are manipulating the system, crushing independent pharmacies, and denying Americans access to affordable, life-saving medications.”

Too much control?

The coalition claims the current structure of the pharmaceutical supply chain allows PBMs to control pricing, availability, and access at every level—manufacturing, distribution, and retail. The state officials charge “prescription decisions are being made in boardrooms that focus on shareholder profits rather than doctors’ offices that prioritize patient care.”

The attorneys general are urging Congress to pass legislation prohibiting PBMs—or their parent companies—from owning or operating pharmacies. That law, they say, would restore balance to the market, ensure patients have access to affordable care, and prevent anti-competitive behavior that favors affiliated pharmacies over independent ones.

Joining Missouri in signing the letter were the attorneys general from Alaska, American Samoa, Arizona, Arkansas, California, Delaware, District of Columbia, Hawaii, Illinois, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, U.S. Virgin Islands, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.