New Report on Prescription Drug Costs: PBMs “Rife with Potential Conflicts of Interest”

SCPC Praises Senate HELP Committee’s Ongoing Examination of Drug Costs, says “PBM Oligopoly Maintains Anti-Competitive Stranglehold on LTC Pharmacies and Patients Under Their Care”

Washington, DC — In thanking U.S. Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) for holding its third 2017 hearing on rising prescription drug costs and associated issues, the Senior Care Pharmacy Coalition (SCPC) pointed out a new study — the subject of today’s hearing – which specifically notes the pharmacy benefit manager (PBM) business model is “rife with potential conflicts of interest.”

“Every American who needs and deserves affordable prescription medications will benefit from the HELP Committee’s ongoing examination of rising drug costs, and we are pleased the new report by the National Academies of Sciences, Engineering and Medicine helps detail how PBMs are central to perpetuating a lack of transparency negatively impacting consumers,” said Alan G. Rosenbloom, President and CEO of SCPC — the only federal advocacy organization devoted exclusively to the interests of the nation’s LTC pharmacies and the patients they serve.

The new study, “Making Medicines Affordable: A National Imperative,” from the National Academies of Sciences, Engineering and Medicine, states the following:

“…The United States biopharmaceutical enterprise has evolved into a supremely complex amalgam of regulators, developers and manufacturers, retailers, insurers, wholesalers, physicians, employers offering benefits, and intermediaries including organizations referred to as pharmacy benefit managers. The role of the latter is to support the overall pharmaceutical enterprise, providing such services as negotiating prices, establishing formularies (lists of drugs to be covered by insurance) and handling administrative functions…

“In addition, some pharmacy benefit managers operate their own mail-order and retail pharmacies. Not surprisingly, the system is rife with potential conflicts of interest.” (Preface, Page 10) 

Stated Rosenbloom: “The nation’s three major PBMs — CVS Caremark, Express Scripts and Optum Rx — control more than 80 percent of prescriptions dispensed in America. For patients living in the nation’s long term care (LTC) facilities, this percentage jumps to more than 90 percent. This degree of market control by so few companies, which also are part of health care conglomerates rife with conflicts of interest, facilitates PBMs’ ability to manipulate prices, gouge consumers and side-step accountability. The bottom line is that the PBM oligopoly maintains an anti-competitive stranglehold on LTC pharmacies and patients under their care.”

Rosenbloom said this anti-competitive environment, which has evolved rapidly since the inception of Medicare Part D and accelerated dramatically in just the past few years, “demands much closer public scrutiny and government oversight than in years past.” He also noted the recently announced pharmacy giant CVS Health acquisition of America’s third-largest health insurer, Aetna, “represents another dangerous step toward governmental acceptance of an increasingly integrated, consolidated and oligopolistic system effectively allowing a shrinking number of mega-companies to control every aspect of health care.”


The SCPC is the national association for independent LTC pharmacies. Our member pharmacies provide care and services to patients in LTC facilities across the country occupying approximately 675,000 beds. Visit  to learn more.