Escalating Battle Between Pharma and PBMs in Washington
As the Trump administration takes shape, a fierce battle between pharmaceutical companies and pharmacy benefit managers (PBMs) is brewing in Washington, D.C.
The Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry's primary lobbying group, has prioritized patient over PBM profits in its 2025 policy agenda. This has prompted PBMs like CVS Caremark to vigorously defend their value within the healthcare system.
Amidst bipartisan scrutiny, PBMs are facing questions about their rebate strategy and whether it truly benefits patients. Research suggests that higher rebates correlate with inflated list prices and increased out-of-pocket costs for patients.
CVS Health executive Prem Shah emphasizes the role of PBMs in reducing branded drug costs, despite recent price hikes by pharma companies. He highlights the push towards generic drugs, which significantly lower expenses for patients.
However, alternatives like Walmart's $4 generic program, GoodRx coupons, and Mark Cuban's Cost Plus Drugs have emerged as viable options. CVS has also launched CostVantage, offering drugs at cost plus a markup fee.
Despite these efforts, PBMs remain an integral part of the healthcare landscape, with CVS's PBM business generating $178 billion in revenue in 2024. Telehealth companies and online platforms are also partnering with drug manufacturers to offer low-cost drugs.
Anjalee Khemlani, senior health reporter at Yahoo Finance, provides in-depth coverage of this ongoing battle and its implications for the industry and consumers alike.