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Letting pharmacy benefit managers own pharmacies is probably good for the patients, according to Jeremy Nighohossian.
Nighohossian, an economist at the Competitive Enterprise Institute, attacks state and federal efforts to outlaw PBM ownership of pharmacies in a new CEI commentary.
"There is plentiful evidence that consumers benefit from having these pharmacies as an option," he writes.
PBM-owned pharmacies face plenty of competition, and, if there are any problems, policymakers should let the other pharmacies cure the problems, not try to regulate a market they are unqualified to manage, Nighohossian says.
What it means: Independent pharmacies now seem to have the upper hand in Congress and in state legislatures, but PBMs and their defenders could still make a comeback.
The backdrop: PBMs help health insurers, employers' self-funded health plans and other "payers" set up and run prescription benefits programs.
PBMs help decide which drugs go on a plan's "formulary," or list of covered drugs, and negotiate with the manufacturers and wholesalers to get rebates and other types of discounts.
Critics have accused UnitedHealth Group's OptumRx, CVS Health's Caremark, Cigna's Express Scripts and other big PBMs of favoring their own pharmacies, squashing competitors, and using incomplete and unclear reporting to capture discounts that were supposed to go to the patients and health plan sponsors.
Arkansas is trying to enforce a law that prohibits PBMs from owning pharmacies.
In Washington, lawmakers like Sen. Elizabeth Warren, D-Mass., and Sen. Josh Hawley, R-Mass., have suggested that Congress should consider breaking up PBM-pharmacy combinations.
Nighohossian's analysis: Nighohossian notes in the CEI commentary that PBM-owned pharmacies already compete for consumers' business with chain drug stores, independent pharmacies, telehealth-service-affiliated pharmacies and independent online pharmacies.
TrumpRx will soon add another option, he says.
"Legislation that forecloses any of these options will impose more harm than benefit," he says.
He says PBMs can use the pharmacies they own to squeeze out costs and improve management of care.
He presents a table, based on store count data from the National Council for Prescription Drug Programs, showing that the number of chain drug stores and pharmacies inside "superstores" fell only modestly — to 35,000, from 40,000 — between 2015 and 2024, and the number of independent pharmacies held steady at 25,000.
Nighohossian says PBMs are important to helping employers and other payers control pharmacy spending.
Patients have an incentive to push drug spending up, and "pharmacies in particular are resistant to the objectives of PBMs – to keep drug prices down – because they are the ones being paid," Nighohossian writes.
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