The landscape of pharmacy benefit manager (PBM) reform is evolving as healthcare stakeholders grapple with rising prescription drug prices and opaque industry practices. Recent legislative and regulatory developments highlight the increasing scrutiny PBMs face and the uncertain road ahead.
Congressional Push for PBM Reform
New bills introduced in Congress aim to curb prescription drug prices by increasing transparency and accountability for PBMs. Lawmakers are calling for greater oversight to ensure that PBMs prioritize patients over profits. Key provisions in the proposed legislation include eliminating spread pricing – where PBMs charge insurers more for a drug than they reimburse pharmacies – and requiring PBMs to disclose rebate agreements with drug manufacturers. Despite bipartisan interest in PBM reform, corresponding legislation was not included in Congress’s recent funding package, delaying potential changes that could reshape the industry. This omission signals ongoing political and industry resistance to reform.
FTC Intensifies Scrutiny of PBM Practices
The Federal Trade Commission (FTC) has taken a more aggressive stance on PBM practices, with its second report delving into the operations of major players like Caremark, Express Scripts and OptumRx. The report scrutinizes how PBMs leverage their market power to control drug pricing, potentially stifling competition and limiting consumer choices. PBMs have been accused of steering patients toward higher-cost drugs that offer better rebates, rather than prioritizing lower-cost alternatives.
The FTC is also investigating the role of PBMs in pharmacy closures, particularly independent pharmacies that struggle to compete against PBM-affiliated chains. Findings from this investigation could serve as a catalyst for future regulatory actions designed to curb PBM influence and promote a more competitive pharmaceutical landscape, potentially leading to new enforcement measures or policy changes that favor transparency and consumer protection.
Legal Developments on Employer Fiduciary Responsibilities
Beyond legislative efforts, the PBM industry is under growing legal scrutiny. A Wells Fargo lawsuit underscores the fiduciary responsibilities of employers in managing prescription drug benefits, highlighting the potential financial risks associated with PBM contracts. The case has drawn attention to the opaque nature of PBM fee structures and their impact on employer-sponsored health plans.
Additionally, a recent court decision dismissed ERISA fiduciary breach claims against Johnson & Johnson, setting a precedent that may influence future legal challenges against PBMs and pharmaceutical firms. This ruling raises questions about the ability of the courts to hold industry players accountable for pricing and reimbursement practices. The legal landscape remains uncertain, with ongoing lawsuits and regulatory investigations likely to shape the future of PBM governance and employer fiduciary obligations.
Implications For Employers and Patients
With reform efforts stalling in Congress but gaining traction in legal and regulatory arenas, employers and patients must stay informed about PBM strategies that impact drug pricing. Evaluating programs that work in tandem with the pharmacy benefit may provide additional savings both for members and plans.
One example of these programs is the RxSaveCard program, which offers cost-saving alternatives for medications that may be overpriced within the PBM contract, allowing patients to access medications at more affordable rates. However, these initiatives alone cannot address the systemic issues at play. Employers must conduct thorough reviews of PBM contracts to ensure they are securing the best pricing for their employees. Additionally, greater industry transparency, employer due diligence and continued regulatory oversight will be essential in driving meaningful reform.
Sources:
- Ayesha Rascoe. “New Bills in Congress Aim to Curb Prescription Drug Prices,” NPR, 2024.
- “FTC Releases Second Interim Staff Report on Prescription Drug Middlemen,” FTC, 2025.
- “Court Dismisses ERISA Fiduciary Breach Claims Against J&J,” NFP, 2025.
- Rita Numerof. “The PBM Bill Failed: Implications for PBM Reform,” Forbes, 2025.
