Pharmacy Benefit Managers: Practices, Controversies, and What Lies Ahead

PBMs’ percentage-based compensation structure may incentivize prioritizing expensive brand-name drugs over cost-effective alternatives, and small payers report not receiving rebate pass-through that PBMs claim is standard practice. The authors conclude that while rebate reform, including pass-throughs to payers or patients, may improve transparency and reduce some out-of-pocket costs, it will not lower overall pharmaceutical spending without accompanying changes such as reimbursement based on comparative clinical effectiveness. Policymakers must also consider these reforms in the context of accelerating vertical integration between PBMs and insurers.