The Quiet Fight to Save Your Local Pharmacy

👋 Hello Health Champions,

Dr. Sarah Martinez thought she understood healthcare economics until she saw what happened to her neighborhood pharmacy.

As a family physician in rural Texas, she'd been prescribing medications for 20 years. But last month, when Miller's Community Pharmacy—the only pharmacy within 30 miles—closed its doors, she started digging into why. What she discovered shocked her.

"Dr. Lee," she told me during a call, "I found out that the PBM was paying Miller's $15 for a medication while charging the insurance company $150. The PBM kept the $135 difference as profit. Miller's was literally losing money on every prescription they filled."

Dr. Martinez had stumbled onto one of healthcare's best-kept secrets: spread pricing. This predatory practice by Pharmacy Benefit Managers (PBMs) has quietly driven hundreds of pharmacies out of business while inflating prescription costs for patients and employers.

But 2025 has become the year everything changed. From Capitol Hill to state legislatures, a bipartisan war against PBM abuses is finally gaining momentum. Here's what's happening—and how it affects your prescriptions.

💊 The $500 Billion PBM Empire

What Are PBMs?

Three companies control 80% of prescriptions: CVS Caremark, Express Scripts, and OptumRx process nearly all U.S. prescription claims—a $500 billion industry operating with virtually no transparency.

How Spread Pricing Works:

💸 Insurance pays PBM: $150 for medication

💊 PBM pays pharmacy: $15 for same medication

💰 PBM keeps: $135 difference

📉 Result: Pharmacies lose money, patients pay higher copays

Other PBM Profit Tactics:

Rebate Manipulation: Drug manufacturers pay rebates for formulary placement. PBMs keep portions of rebates instead of passing savings to patients.

Network Manipulation: Exclude independent pharmacies, force patients to use inconvenient PBM-owned locations, mandate mail-order services.

Prior Authorization Abuse: Create unnecessary barriers even for routine medications, delaying treatment by days or weeks.

🧭 The Reform Movement Gaining Momentum

Federal Legislation

PBM Reform Act of 2025 (H.R. 4317)

Introduced July 10, 2025 by Reps. Buddy Carter (R-GA) and Debbie Dingell (D-MI)

Key Provisions:

• ❌ Ban spread pricing in Medicaid

• 💰 Require 100% rebate pass-through to plan sponsors

• 🔄 Decouple PBM compensation from drug prices

• 📊 Mandate transparent reporting

• ⚖️ Grant federal enforcement authority

Pharmacy Benefit Manager Transparency Act (S.526)

Senate companion focusing on prohibiting deceptive pricing practices.

Senate Finance Committee Bipartisan Bill

Introduced December 4, 2025 by Sens. Mike Crapo (R-ID) and Ron Wyden (D-OR).

FTC Investigation

The Federal Trade Commission released its second interim report in January 2025, finding that the three major PBMs "hiked costs for a wide range of lifesaving drugs" through anticompetitive practices.

Current Status: FTC administrative proceedings resumed August 2025 against CVS Caremark, Express Scripts, and OptumRx.

American Medical Association Action

AMA released analysis August 1, 2025 showing:

• 79% of PBM markets lack adequate competition

• 77% of enrollees in plans with vertically integrated PBM-insurer ownership

• Four PBMs control 67% of national market

AMA officially endorsed the PBM Reform Act, calling for immediate congressional action.

State-Level Victories

Texas: Senate Bill 1236 signed May 27, 2025

• Prohibits abusive audit practices

• Bans mid-contract reimbursement changes

• Requires contract transparency

Other States with 2025 Reforms:

• Florida: Banned spread pricing

• Iowa: Mandated rebate pass-through

• Vermont, Idaho, Massachusetts: Enhanced transparency requirements

❓ How PBMs Affect Your Costs

Hidden Ways You Pay More:

Higher Copays: PBMs add hidden fees that increase copay calculations and steer you toward expensive medications that generate larger rebates.

Reduced Access: Limited networks exclude convenient independent pharmacies. You're forced to travel farther or use mail-order services.

Treatment Delays: Prior authorization creates barriers even for routine medications, with approval delays of days or weeks.

Real-World Example:

• Your copay: $30

• Insurance pays PBM: $120

• PBM pays pharmacy: $25

• PBM profit: $95 on YOUR prescription

That $95 could have reduced your copay or been passed to the pharmacy to keep it open.

💡 How to Protect Yourself

Know Your Rights:

• Request complete formulary lists

• Ask pharmacy about cash prices vs. insurance prices

• Research pharmacy discount programs

• Understand appeal processes

Take Action:

• Support independent pharmacies when copays are equal

• Ask your doctor about generic alternatives

• Contact your representatives to support PBM reform

• Encourage your employer to audit PBM contracts

🚨 Dr. Lee's Bottom Line

PBM practices add an estimated $150-300 annually to the average family's prescription costs while forcing pharmacy closures in underserved communities.

The 2025 reform movement has unprecedented bipartisan support. With the FTC investigation, AMA advocacy, and state-level victories building momentum, meaningful change is finally possible.

Your voice matters. Share your PBM experiences with your representatives. Real patient stories drive legislative change.

Questions about PBM practices affecting your prescriptions? Reply to this email.

Stay informed and advocating,

Dr. Lee

📚 KEY SOURCES

• H.R. 4317 - PBM Reform Act of 2025

• FTC Second Interim Staff Report on PBMs

• AMA PBM Competition Analysis (July 2025)

• Texas SB 1236 PBM Reform

• National Community Pharmacists Association

🔒 Medical Disclaimer

This newsletter provides general health information and is not a substitute for professional medical advice. Always consult your provider before making healthcare decisions.