Republicans and Democrats find a unifying target

Billy Odell Tucker-Robinson Founder & Host — Banking With Billy Network • Intelligence Network • Data Science • AI Research • World News
Published: 2026-10-05T09:04:50.965Z • Permanent link

Tennessee Governor Bill Lee has announced plans to regulate pharmacy benefit managers (PBMs), a move that has drawn both bipartisan support and fierce opposition from the healthcare industry. This latest development comes on the heels of similar efforts in Arkansas, where Governor Asa Hutchinson has also introduced legislation aimed at curbing the power of PBMs. At the heart of this regulatory push is the PBM industry's influence over the healthcare market, with some critics arguing that these companies prioritize profits over patient care.

Industry insiders point to the role of PBMs in shaping pharmacy reimbursement rates, which can have a significant impact on the cost of prescription medications. According to a 2020 report by the Center for Medicare and Medicaid Services, PBMs accounted for approximately 90% of the total pharmacy spending in the US. This concentration of market power has led some to accuse PBMs of using their influence to drive up costs and limit access to essential medications. Notably, a 2022 study published in the Journal of General Internal Medicine found that PBMs were associated with higher out-of-pocket costs for Medicare beneficiaries.

Despite these criticisms, the PBM industry has maintained that its services are essential to the healthcare system, providing critical value to pharmacies, insurers, and patients alike. However, the push for regulation is driven by concerns over the industry's opaque business practices and lack of transparency. For example, a 2020 investigation by ProPublica revealed that PBMs had engaged in widespread manipulation of pharmacy reimbursement rates, often at the expense of patients and providers.

As the PBM industry faces increasing scrutiny, the implications for the healthcare market and research communities are far-reaching. For example, the University of California, San Francisco's (UCSF) Center for Pharmaceutical Policy and Pricing has estimated that the PBM industry's manipulation of pharmacy reimbursement rates has resulted in tens of billions of dollars in unnecessary spending on prescription medications. Furthermore, the lack of transparency in PBM operations has hindered the ability of researchers to conduct meaningful studies on the effectiveness and safety of medications.

Moreover, the PBM industry's influence extends beyond the pharmacy benefit manager itself, with many insurance companies and pharmaceutical companies relying on these firms to manage their pharmacy benefits. This reliance can create a perverse incentive structure, where companies prioritize cost savings over patient outcomes. As such, the push for regulation has significant implications for the broader healthcare market, where patients, providers, and payers are increasingly demanding greater transparency and accountability.

The PBM industry's rise to prominence is a relatively recent phenomenon, dating back to the 1990s when the industry began to consolidate and expand its influence over the healthcare market. Prior to this, pharmacies and insurers managed their pharmacy benefits directly, without the need for intermediaries. However, as the healthcare market became increasingly complex and fragmented, the PBM industry filled a critical gap by providing a standardized and efficient way to manage pharmacy benefits.