CEOs defend their PBMs. Don’t believe it, says a critic

At a time when Congressional efforts to reform pharmacy benefit managers (PBMs) seem to be moving forward once again — a hearing by the House Committee on Energy and Commerce was held in February 2025 to address PBM competition — the larger PBMs are fending off their critics with changes that they say improve transparency into pricing and other PBM practices and give new options to their payer clients.

David Joyner

In recent investor calls, the leaders of the large, publicly traded healthcare companies that own large PBMs spoke in glowing terms about their new programs for payers. For example, David Joyner, CEO of CVS Health, said the company is on a “pharmacy transformation journey” that involves launching two programs that define drug costs, identify markups and provide more insight into costs. These programs, he said, will show payers the true net cost of prescription drugs and the value of pharmacy services.

However, Joe Shields, managing director of Transparency-Rx, a trade group of smaller PBMs, remains skeptical that the programs will do what they say. “They [the larger PBMs] have discovered that transparency is an important value that the market wants,” says Shields. “From a branding and a marketing standpoint, they have to say they’ve embraced transparency. But the truth is, they largely remain as opaque and secretive in terms of their approaches.”

Joe Shields

Shields pointed to CVS Caremark’s settlement in July 2024 with the state of Illinois, where the company agreed to pay the state $45 million for failing to pass along rebates. He also pointed to the Federal Trade Commission’s report, which was published that same month, that said PBM business practices allow the companies to profit at the expense of patients and independent pharmacies. The FTC also released an interim report in January 2025 on specialty drug management that said the large PBMs steer patients to their affiliated pharmacies and that they were reimbursed at higher rates.

Payers are increasingly dissatisfied with PBMs and want some degree of change, according to the results of a survey conducted by Pharmaceutical Strategies Group (PSG) last year. Customers of the “big 3 PBMs reported lower satisfaction across most measures, including overall satisfaction, and they are less likely to recommend their PBM, PSG found. The big 3 PBMs are CVS Caremark, which is owned by CVS Health; Optum Rx, which is owned by UnitedHealth Group; and Express Scripts, which is owned by the Cigna Group.

Shields said true transparency starts with the willingness to share data and information. He referred to a witness at the February 2025 hearing who said his members had asked for basic information from PBMs and were not able to get that data.

Pharma pushback

Both Joyner and Andrew Witty, CEO of UnitedHealth Group, defended PBMs in their calls with investors, saying that they were the entities within the U.S. healthcare system to push back on the power that pharmaceutical companies have to set the prices on their patent-protected products.

“For more than three decades, PBMs have been a proven, unequivocal mechanism to negotiate down the price of drugs for payers and consumers while promoting better adherence and better health in drugs that have no rebates,” Joyner said in an investor call in February 2025.

He echoed comments made a month earlier by Witty, who acknowledged the need for better healthcare outcomes and how the U.S. healthcare system as a whole needs to be less confusing and less complex.

The PBM, Witty said, acts on behalf of the ultimate payers, which are employers, unions, and state and federal governments. “It acts on their behalf because they’re ultimately the ones who are typically underwriting the cost of the medicine for the patients, the consumers who are beneficiaries of their plans that are supported by those organizations,” he said. “That is often lost in terms of how this mechanism works, and it’s critical to understand this.”

Shields, however, called this another talking point. “When you look at the pharmacy supply chain, the number of places where megainsurers and PBMs control market access — and control is far more influential at this point than the drugmaker,” he says. “It’s not only at the point of drug acquisition or drug negotiation that would dictate things like price. They’ve set up group purchasing organizations and rebate aggregators. They control the delivery of specialty drugs and the reimbursement to pharmacies. And now they are doing drug manufacturing.”

Shields is referring to the large PBMs’ efforts to develop private-label biosimilars that compete directly with pharmaceutical companies’ biosimilars for Humira (adalimumab) and Stelara (ustekinumab).

Looking ahead

Joyner said in his remarks that CVS Caremark has launched two programs. One is CVS CostVantage, which is a pharmacy reimbursement model that will define the drug cost and related reimbursement using a formula built on the cost of the drug, a set markup, and a fee that reflects the care and value of pharmacy services.

Starting at the beginning of this year, all prescriptions ordered by people covered by commercial insurers are dispensed through CostVantage, with a transparent cost-plus model, a pricing model that includes the cost of the drug, a set markup and a fee for pharmacy services. Joyner said the company is now developing a cost-based solution for Medicare and
Medicaid markets.

The second program is TrueCost, a model that offers client pricing reflecting the true net cost of prescription drugs, with visibility into administrative fees. Joyner said this program has resonated with customers. Already 75% of commercial customers have two or more elements of the model in their pharmacy benefit.

UnitedHealth Group has also made a commitment to transparency. During the call, Witty said his company would “pass through” 100% of the rebates it receives from drugmakers to its payer clients by 2028. The company will continue to encourage all its clients to fully pass these savings directly to patients at the point of sale, he said.

During a February 2025 investors call, Cigna leaders announced that the company was making a multiyear commitment to efforts to make healthcare easier for patients and doctors, improve efficiency and provide more transparency for its customers. Cigna is focusing on key areas of simplifying healthcare processes, including providing more resources to help customers navigate the system, offering better value through improved services, ensuring accountability through governance, and sharing ongoing progress with the public.

Starting in 2026, Cigna will release an annual “customer transparency” report to show how it’s progressing, including information about care facilitation and resolution statistics.

Evernorth, Cigna’s health services division, recently announced that it will focus on improving patient access to affordable medications and creating an Office of Excellence and Transformation to oversee these efforts.

Through its Express Scripts pharmacy services, Evernorth plans to ensure patients benefit from lower, negotiated drug prices rather than paying the high list prices. It will also provide personalized reports to consumers showing how they benefit from these discounts and offer plan sponsors annual reports on costs and pharmacy claims.