California Attorney General Rob Bonta, along with a bipartisan group of 39 attorneys general, is urging Congressional leaders to adopt legislation prohibiting Pharmacy Benefit Managers (PBMs) from owning or operating pharmacies. The coalition asserts that such legislation is necessary to protect consumers and small businesses.
PBMs, originally established in the late 1960s to assist consumers in accessing affordable medications through negotiating discounts and rebates, are now perceived by the attorneys general as entities with excessive market power. According to them, PBMs' ownership of pharmacies contributes to manipulated pricing, the rise of pharmacy deserts, and restricted access to prescription medications.
“PBMs’ priority is not consumers, but rather their own bottom line. They must be reined in,” stated Attorney General Bonta. He emphasized the need for more competition in the market to combat rising drug prices and protect consumers and small businesses.
The letter from the attorneys general outlines how the consolidation of PBMs has shifted the industry. Companies like CVS Caremark, Optum Rx, and Express Scripts handle a significant majority of prescriptions in the U.S. and generate a substantial portion of specialty drug revenue. The majority of the largest PBMs own affiliated pharmacies and are part of larger conglomerates with interests in insurance and healthcare clinics.
PBMs not only own pharmacies but also contract with non-affiliated entities to form networks that dictate where consumers can access their medications. This dual role hampers independent pharmacies, forcing them to comply with unfair terms, ultimately pushing some out of business.
Over the last ten years, approximately 10% of rural independent pharmacies in the United States have closed, impacting consumers in rural and underserved areas by reducing their access to nearby pharmacies.
Attorney General Bonta, together with attorneys general from numerous states and territories, has sent a letter to Congressional leadership advocating for the proposed federal law.
A copy of the complete letter is available for review.