Through the lobbying arm PhRMA (Pharmaceutical Research and Manufacturers of America), manufacturers like Pfizer, Eli Lilly, Amgen, and AstraZeneca are seeking to erode confidence in Pharmacy Benefit Managers (PBMs) and actively work to fuel the legislative backlash occurring to remove their stranglehold on the pharmaceutical industry. Even with President Donald Trump’s executive order to lower prescription drug prices, actual federal legislation to rein in PBMs only nibbles around the edges of the problem, leaving the job to the states to battle this industry. A number of states across the country have already introduced restrictive bills and passed laws undercutting PBMs’ power, and other measures are in the works. Many state lawmakers lay the destruction of independent pharmacies at the feet of PBMs like CVS Caremark and UnitedHealthcare. Because of the drug prices set by PBMs, as well as shifting standards in reimbursing pharmacies for their costs, independent pharmacies are unable to compete and choose instead to close their doors.
As pharmacist and business owner Dr. Michel Daher affirmed in an email exchange on the subject:
PBMs play such nasty games… they own their own stores, they have access to our patients within our stores, and under reimburse us to put us out of business. The games are absolutely nasty.
So, the cry for PBM reform is legitimate, and PhRMA is just as complicit as the PBMs. But if it is up to PhRMA, PBMs will be left holding the bag.
250 pharmacies have closed in Iowa over the last decade, with 31 closing in the last year. This could only rise if the state fails to pass PBM reform.
“It’s not unusual [for local pharmacists] to lose $50 to $100 on that prescription… How do I keep my doors open?” pic.twitter.com/PVhh1LQa5H
— American Economic Liberties Project (@econliberties) April 28, 2025
PBMs negotiate with drug manufacturers and pharmacies to set prices, determine patients’ access to different medications, and contract with pharmacies to participate in networks. Insurers pay fees to PBMs for performing these functions. PBMs also derive revenue in other ways: for example, they receive a share of the drug rebates they negotiate with pharmaceutical companies; they collect the difference between what insurers are reimbursed and the amount that pharmacies are paid (the “spread”); and they steer business to their affiliated pharmacies.
Because of the significant behind-the-scenes impact they have on the total amount insurers pay, how much pharmacies are paid, and which drugs are available to patients, PBMs have faced growing scrutiny about their role in rising prescription drug costs and spending.
This is a lot of power that is only equaled by Big Pharma. So, this competition between Big Pharma and PBMs is like the Devil and Mephistopheles squaring off: The consumer will only end up with the lesser of two evils.
Rising healthcare costs have triggered a battle within the industry over who is to blame. Drugmakers argue that the middlemen are at fault and profit from higher prices. The managers in turn say that pharmaceutical companies have set the list prices for drugs far too high, and that they have actually won billions of dollars in savings thanks to their efforts.
This is at the heart of the Arkansas law that outlawed PBMs from operating pharmacies in the state. Arkansas became the first state in the nation to do this, and several other states are looking closely to see what the outcome will be. On Monday, VA Gov. Glenn Youngkin also signed legislation into law that outlaws PBMs from operating or owning pharmacies in the state.
Governor Glenn Youngkin has signed into law a bill that prohibits pharmacy benefit managers (PBMs) from owning or operating pharmacies in Virginia. The legislation, part of the Save Local Pharmacies Act, will take effect on July 1, 2025.
The move follows a broader effort to rein in the influence of PBMs—third-party companies that negotiate drug prices between manufacturers and insurers. Some of the largest PBMs, including Caremark (CVS Health), Express Scripts (Cigna), and OptumRx (UnitedHealth Group), also own pharmacies, a practice critics say creates a conflict of interest.
In April, Attorney General Jason Miyares joined 38 other state attorneys general in urging Congress to take similar action at the federal level.
For PBMs, it’s death by a thousand papercuts, as states work to either restrict their reach or remove them entirely. The state of Alabama has taken this type of action. In April, Gov. Kay Ivey signed SB252 into law, prohibiting PBMs from paying pharmacists less than Medicaid does, and blocking them from charging miscellaneous fees. In the 2025 Alabama legislative session, Senate Bill 93 is making its way through. This bill goes even further, prohibiting PBMs from reimbursing pharmacies in amounts that are less than what the pharmacy itself paid for the medication. The Alabama Pharmacy Association coordinated a walkout day in February to bring attention to this bill and engage customers in a conversation on how PBMs work to increase the cost of their medications and what they can do about it.
Last year, executives at the drug industry trade group PhRMA told the group’s lobbyists that taking on the firms, known as PBMs, was a top priority in 2025, a lobbyist who attended the meeting said. Drug executives spent much of their time at a million-dollar dinner with Trump urging him to focus his criticism on benefit managers, according to people familiar with the dinner. They have repeatedly talked to Trump and his top aides in recent months, and some are slated to be in the Oval Office on Wednesday.
“Pharmaceutical companies have been pretty successful in shifting a disproportionate amount of blame to the PBMs,” said Steve Knievel, a health-policy expert with Public Citizen, a nonprofit consumer-advocacy group.
So, PhRMA is pouring lemon juice on those papercuts while amplifying the hostility toward PBMs nationwide. Aside from lobbying Congress and the Trump administration, PhRMA is using trusted community health and minority advocacy organizations to push the message that PBMs are to blame for their woes.
Drugmakers spent a record $31 million to lobby in Washington last year, and about $13 million in the first quarter of 2025, according to public filings. Millions more went to donations to political groups and ads, many of which blamed benefit managers for the high price of drugs.
[…]
PhRMA’s targeting of middlemen predates the Trump administration and has taken several forms, including sending money to minority healthcare nonprofits, some of which then publicly attacked benefit managers. The group nets about half a billion dollars each year and gives money to more than a hundred nonprofits.
According to financial reports, in 2022 and 2023, this largesse included $25,000 to MANA, an organization that targets Latinas, with another $270,000 to MANA Action Fund, the organization’s PAC. PhRMA also gave $50,000 to Black, Gifted & Whole which is a self-described “movement dedicated to transforming the collective narrative of Black Queer men.”
The group’s CEO, Guy Anthony, wrote op-eds calling for changes to the system to curb “abuses” by benefit managers. “As a Black queer man living with HIV, it’s fair to say that I take special interest in lawmakers’ attempts to lower drug prices,” he wrote in one in 2022. Anthony didn’t respond to a request for comment.
Lots of money has been poured out the door from PhRMA to other organizations whose outreach is to other Black and Latino groups, as well as senior citizens. PhRMA also bought targeted ads in legacy and social media, at parties and events like the White House Correspondents’ Dinner, and in podcasts.
This is what seniors are going to pay once the competition is gone, and PBMs get what they want. This is proof that PBMs don’t save money. PBMs are trying to put competition out of business, so they can rip off the sick and elderly. pic.twitter.com/acjFmsnvkW
— Pharmassists (@Pharmassists) May 2, 2025
But the PBM lobby has been mounting its own PR campaign as well as lobbying Congress and the White House.
Benefit managers and insurers are also trying other tactics. UnitedHealth Group’s CEO announced in January that the company’s PBM subsidiary will shift drug rebates it negotiates back to consumers by 2028, saying it will show that drug companies themselves are to blame for high drug prices.
While federal legislation could divest and deregulate quickly, it is doubtful it would pass. The love triangle between elected officials, Big Pharma, and PBMs works to effectively kill any legislation presented. So, while Mephistopheles and the Devil work to lay blame and steal ground, it is left up to the states to pull the rug out from under both of them.
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