Pharmacy Benefit Managers, or PBMs, play a behind-the-scenes role in how Americans get their prescription medications. These companies act as middlemen between drug manufacturers, health insurance plans, and pharmacies.
PBMs negotiate prices with drug makers, create lists of covered medications (called formularies), and set reimbursement rates for pharmacies. Their goal, in theory, is to help insurance companies and employers keep drug costs down while making sure patients have access to needed medicines.
However, PBMs have increasingly drawn scrutiny from lawmakers, pharmacists, and consumer advocates, who argue that their business practices may contribute to the rising cost of prescription drugs. Critics say that by steering patients toward higher-cost brand-name drugs or favoring their own affiliated pharmacies, PBMs can reduce competition and drive up prices over time.
Independent and local pharmacy owners have also voiced concerns, saying that PBMs reimburse them at rates below the cost of some medications, threatening the viability of small, community-based drugstores. Some pharmacy groups argue that these practices have caused many local pharmacies to close or cut services, limiting access to care in rural and underserved areas.
In states like Louisiana, the role of PBMs is the focus of proposed legislation aimed at increasing transparency, regulating reimbursement practices, and limiting the control PBMs have over the prescription drug supply chain with the intent of lowering prescription drug prices for consumers and leveling the playing field for local pharmacies.
