PBMs Are Back in the Hot Seat – Where They Belong

If you’ve ever wondered why a trip to the pharmacy can feel like highway robbery, the answer often comes down to three little letters: PBM. These are the middlemen—pharmacy benefit managers—who are supposed to negotiate lower drug prices on behalf of patients and employers. But according to the Federal Trade Commission (FTC) and Congressman James Comer (R-KY), the “help” PBMs provide is actually costing us more, while they reap the benefits.

Here’s what’s going on: the FTC just re-ignited its case against the three largest PBMs—CVS Caremark, Cigna’s Express Scripts, and UnitedHealth’s Optum Rx. Regulators say these companies have set up rebate schemes that reward drugs with higher list prices. Translation? The more expensive the drug, the more money the PBMs make. Insulin, one of the most vital and widely used medications, has been a prime target of this system. Patients end up paying more out-of-pocket while PBMs pocket fat fees.

Comer, meanwhile, is digging into another shady corner of the business: offshore group purchasing organizations (GPOs). These entities, technically subsidiaries of the PBMs, handle the majority of rebate negotiations. The catch? Many are based overseas—Switzerland for Express Scripts’ “Ascent,” and Ireland for Optum Rx’s “Emisar.” By operating offshore, these GPOs dodge U.S. oversight and keep their deals in the shadows. Comer’s blunt warning: these corporate maneuvers are “hurting patients and costing taxpayers.”

At the same time, President Trump’s April 2025 executive order pushes for greater transparency into how PBMs operate. It directs the Department of Labor to propose new rules requiring PBMs to disclose both direct and indirect compensation from employer health plans. It also calls for sunlight on the fees PBMs pay brokers to steer employers toward their services—and insists that rebate savings be passed back to employers and consumers, rather than captured as profit. Taken together, the order signals that federal scrutiny of PBMs isn’t just a passing interest; it’s becoming a sustained effort to crack one of the most opaque corners of the healthcare system.

Naturally, PBMs push back hard on this narrative. They insist drugmakers alone set prices, and that PBMs are the only ones fighting to keep costs down—but the reality looks very different. I spent many years negotiating drug prices with PBMs while I was at Johnson and Johnson and can speak at length about their tactics. They are not pretty.

When the system rewards higher list prices and secretive rebate deals made overseas, it’s hard to argue that patients and employers are the ones coming out ahead. Comer’s investigation is asking the uncomfortable questions—and demanding documents that could shed light on whether PBMs designed these structures specifically to avoid scrutiny.

Here’s the bottom line: PBMs claim to be the watchdogs of drug pricing, but more and more evidence suggests they’re also the fox guarding the henhouse. With the FTC moving forward, an executive order requiring new transparency, and Congress stepping in, the pressure is on. If these efforts succeed, we could finally see some daylight in an industry that’s thrived on complexity and secrecy—while ordinary Americans foot the bill.