In Washington, D.C., a renewed clash is emerging between pharmaceutical companies and pharmacy benefit managers (PBMs) as the newly formed administration of President Donald Trump embarks on addressing key policy areas in healthcare. Central to the debate is the growing tension around the role of PBMs in the U.S. healthcare system, with significant questions being raised about their impact on prescription drug costs.
The Pharmaceutical Research and Manufacturers of America (PhRMA), the largest lobbying body representing the drug industry, unveiled its policy agenda for 2025, which focuses on ensuring that patients benefit from the savings negotiated by PBMs. PhRMA’s new stance calls for more transparency, advocating for PBMs and health plans to share negotiated savings directly with patients and hold these intermediaries accountable for limiting patient access to medications.
This call for reform comes amidst increasing scrutiny from policymakers, who are questioning whether the rebate strategy employed by PBMs—where they negotiate discounts off of list prices in exchange for ensuring access to certain drugs—actually results in meaningful cost savings for consumers. Critics argue that the rebate-driven approach leads to higher list prices for drugs, ultimately inflating the out-of-pocket costs borne by patients.
While PBMs such as CVS Caremark defend their value in reducing drug costs by pushing for the use of generics and offering significant rebates, their role has been questioned. The 2018 law that allowed pharmacists to inform patients of lower-cost options has intensified pressure on PBMs. As a result, platforms like GoodRx, Walmart, and even the CostVantage service launched by CVS have introduced alternative models aimed at providing access to lower-cost prescriptions.
These developments highlight the growing shift towards transparency and competition in the prescription drug market, particularly as new players like telehealth companies partner with major drug producers to offer more affordable drug options. However, CVS Health, which saw a total of $178 billion in PBM revenues in 2024, maintains that health insurance companies will always require the services of a PBM, despite increasing alternatives in the market.
As this debate continues to unfold, both the pharmaceutical and PBM sectors are facing mounting pressure to reconsider their pricing structures and ensure that patient affordability is placed at the forefront of the national discussion on healthcare.
