Pharmaceutical Companies and Pharmacy Benefit Managers Fight in Washington as Trump Administration Takes Shape
Policy Priorities
The pharmaceutical industry's top lobbying firm, PhRMA, released its 2025 policy priorities, emphasizing the need to prioritize patients over PBM profits by sharing negotiated savings directly with patients and holding PBMs accountable for limiting patient choices.
Defense from PBMs
CVS Caremark (CVS) defended the value of PBMs in the healthcare system, despite bipartisan scrutiny of their operations and rebate strategy. CVS Health Group President Prem Shah emphasized PBMs' role in lowering drug costs and pushing patients towards more affordable generic options.
Increasing Scrutiny
Research has raised concerns about the potential negative impact of high rebates on patient costs, leading policymakers to increase their scrutiny of PBMs. This includes investigating whether PBMs favor high-priced drugs with higher rebates over more cost-effective options.
Alternative Prescription Access
In recent years, alternative models for low-cost prescription access have emerged, including Walmart's $4 generics, GoodRx coupons, Mark Cuban's Cost Plus Drugs, and telehealth companies partnering with drug manufacturers.
CVS's Response
Despite these new efforts, CVS believes that health insurance companies will continue to rely on PBMs. In 2024, the PBM business was the largest revenue segment for CVS, generating $178 billion. CVS has also launched its own cost-effective prescription service, CostVantage, which bases pricing on the underlying cost of drugs plus a defined markup.
Expert Insights
Anjalee Khemlani, the senior health reporter at Yahoo Finance, covers the pharmaceutical industry, health policy, and digital health. She follows key developments in the market, including the impact of new technologies and regulations on healthcare companies.