Christmas. 12, 2026, 6:00 AM EDT<\/time><\/p>\n

By<\/span>Emma Freer<\/span><\/p>\n<\/div>\n

When Congress passed a spending package<\/a> earlier this year, few industries were more disappointed than pharmacy benefit managers. PBMs are middlemen who liaise between insurers, drug manufacturers and pharmacies to determine which drugs are covered at what price. Their job, as the New York Times reported in 2024<\/a>“is to reduce drug costs. Instead, they frequently do the opposite. They steer patients toward pricier drugs, charge steep markups on what would otherwise be inexpensive medicines and extract billions of dollars in hidden fees.”<\/p>\n

The spending bill’s provisions limited some common PBM practices, and the industry declared itself<\/a> sufficiently regulated. But policymakers are rightly refusing to move on. They are now proposing even more aggressive legislation that would extend not just to PBMs but to other “Big Medicine” middlemen — such as insurance conglomerates and wholesale drug distributors — that drive healthcare costs up and independent providers out of business.<\/p>\n

Americans receive middling healthcare<\/a> yet face the highest medical costs<\/a> in the world. Meanwhile, six of the country’s 15 most valuable companies<\/a> are Big Medicine conglomerates, more than from any other sector, including Big Tech. Together, these six generated nearly $34 billion<\/a> in profits last year alone, according to annual reports.<\/p>\n

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Big Pharma abuses patents to keep drug costs high and block competition from more affordable generics. But that doesn’t let Big Medicine off the hook.<\/p>\n<\/blockquote>\n<\/figure>\n
PBMs demonstrate, in microcosm, the Big Medicine problem. The “big three” PBMs — CVS Caremark, Cigna’s Express Scripts and UnitedHealth Group’s Optum Rx — not only control 80% of U.S. prescriptions<\/a> but also are each vertically integrated with a major insurance conglomerate and<\/em> a major pharmacy. There is overwhelming evidence<\/a> that these three companies leverage their market power to drive drug costs up and independent pharmacies out of business. For example, a 2025 report by the Federal Trade Commission<\/a> found that the big three PBMs paid their affiliated pharmacies up to 7,736% more than unaffiliated competitors.<\/p>\n
In addition to the three PBM parent companies are three drug wholesalers: McKesson, Cencora and Cardinal Health. They control 96% of U.S. drug distribution<\/a> and, like the PBMs, are increasingly vertically integrated with medical providers, including oncology clinics and other specialty practices with high drug costs. This arrangement is rife with conflicts. For instance, in March 2026, Cencora agreed to pay $1 million<\/a> to resolve allegations that (in the words of the Justice Department) “it violated the False Claims Act by paying kickbacks to health care providers (HCPs) and medical practice executives to induce them to purchase specialty pharmaceutical products.” In other words, wholesalers’ profit margins rather than doctors’ clinical judgment can dictate which drug a patient receives in the chemo chair or during another potentially lifesaving treatment.<\/p>\n
PBMs have been quick to point the finger elsewhere, recently launching a seven-figure advertising campaign<\/a> to blame the pharmaceutical industry for high drug costs. To be clear, Big Pharma abuses patents to keep drug costs high and block competition from more affordable generics. But that doesn’t let Big Medicine off the hook. Unfortunately, even incremental PBM reform efforts stalled for years in the face of fierce opposition<\/a> from industry groups. Elon Musk even played a supporting role, tanking a bipartisan government funding<\/a> bill that included PBM reforms at the behest of President Donald Trump. (Musk later admitted<\/a> he didn’t even know what a PBM was.)<\/p>\n
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Lawmakers were finally able to get reforms into a different spending bill, which Congress passed in February<\/a>. The provisions included banning PBMs from pocketing manufacturer rebates, excluding independent pharmacies from their networks in Medicare Part D or withholding certain pricing information from employer health plan sponsors.<\/p>\n
But these reforms left the big three PBMs’ vertically integrated business model intact. So policymakers are starting to broaden their focus. Deep-red Arkansas and Tennessee have passed laws<\/a> prohibiting PBMs from owning pharmacies. Although the laws have yet to take effect, research estimates that such a ban would reduce drug prices by more than 7%<\/a>. This is likely a conservative projection, given the FTC’s findings.<\/p>\n
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This bill would break up all six of the Big Medicine companies in an effort to lower healthcare costs and promote competition. <\/p>\n<\/blockquote>\n<\/figure>\n
At the federal level, earlier this year Sens. Elizabeth Warren, D-Mass., and Josh Hawley, R-Mo., introduced the Break Up Big Medicine Act<\/a>which would prohibit insurers, PBMs and wholesalers from owning or controlling healthcare providers, including medical practices and pharmacies. In practice, this bill would break up all six of the Big Medicine companies in an effort to lower healthcare costs and promote competition. Indeed, research shows<\/a> that UnitedHealthcare — the insurer arm of UnitedHealth Group — pays its affiliated Optum medical providers 17% more than competitors and up to 61% in markets where UnitedHealthcare has 25% or more market share.<\/p>\n
Public support for this kind of legislation is mounting. A Morning Consult poll from May<\/a> found that more than 80% of voters agreed that health insurance companies “have too much control over medical decisions” and “drive up costs without investing in the healthcare needs of the patients they cover.” Business leaders like Mark Cuban, the billionaire co-founder of Cost Plus Drugs, endorse breaking up these companies<\/a>. My organization, the American Economic Liberties Project, is part of a coalition of 25 organizations<\/a> — representing patients, clinicians, employers and policy experts — that support the Break Up Big Medicine Act.<\/p>\n
During the Great Depression, President Franklin Delano Roosevelt signed into law the Glass-Steagall Act, which structurally separated commercial banks from investment banks, given the systemic risks of their common ownership. Big Medicine poses a similarly catastrophic threat to the U.S. healthcare system. The Break Up Big Medicine Act won’t heal all of the system’s problems, but it will begin the path to recovery.<\/p>\n<\/div>\n
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Emma Freer<\/p>\n<\/div>\n
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Emma Freer is a senior policy analyst for health care at the American Economic Liberties Project, a nonpartisan advocacy group that opposes the concentration of economic power.<\/p>\n<\/div>\n<\/div>\n<\/section>\n
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Christmas. 12, 2026, 6:00 AM EDT ByEmma Freer When Congress passed a spending package earlier this year, few industries were more disappointed than pharmacy benefit managers. PBMs are middlemen who liaise between insurers, drug manufacturers and pharmacies to determine which drugs are covered at what price. Their job, as the New York Times reported in […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-25740","post","type-post","status-publish","format-standard","hentry","category-trump"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/posts\/25740","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/comments?post=25740"}],"version-history":[{"count":0,"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/posts\/25740\/revisions"}],"wp:attachment":[{"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/media?parent=25740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/categories?post=25740"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bluelightnews.com\/category\/politics\/wp-json\/wp\/v2\/tags?post=25740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}