{"id":796407,"date":"2026-07-12T23:33:15","date_gmt":"2026-07-12T23:33:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/796407\/"},"modified":"2026-07-12T23:33:15","modified_gmt":"2026-07-12T23:33:15","slug":"big-medicine-threatens-your-wallet-and-your-health-but-there-is-a-solution","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/796407\/","title":{"rendered":"Big Medicine threatens your wallet and your health. But there is a solution."},"content":{"rendered":"

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>, \u201cis 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.\u201d<\/p>\n

The spending bill\u2019s 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 \u201cBig Medicine\u201d middlemen \u2014 such as insurance conglomerates and wholesale drug distributors \u2014 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\u2019s 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.\u00a0<\/p>\n

Big Pharma abuses patents to keep drug costs high and block competition from more affordable generics. But that doesn\u2019t let Big Medicine off the hook.<\/p>\n

PBMs demonstrate,\u00a0in microcosm, the Big Medicine problem. The \u201cbig three\u201d PBMs \u2014\u00a0CVS Caremark, Cigna\u2019s Express Scripts and UnitedHealth Group\u2019s Optum Rx \u2014\u00a0not only control 80% of U.S. prescriptions<\/a> but also are each vertically integrated with a major insurance conglomerate and 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) \u201cit 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.\u201d In other words, wholesalers\u2019 profit margins rather than doctors\u2019 clinical judgment\u00a0can 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\u2019t 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\u2019t even know what a PBM was.)<\/p>\n

\tRecommended<\/p>\n

\t\t\t\"\"\t\t<\/p>\n

\n\t\t\t\t\t\tEmma Freer\t\t<\/p>\n

\n\t\t\t\t\t\tEmma Freer is a senior policy analyst for health care at the American Economic Liberties Project,\u00a0a nonpartisan advocacy group that opposes the concentration of\u00a0economic\u00a0power.\t\t<\/p>\n

\"MS<\/p>\n

\u00a9\u00a02026 Versant Media, LLC<\/p>\n

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