Washington, D.C. — The American Economic Liberties Project today released new research showing that at least 326 U.S. pharmacies have closed since Dec. 19, 2024, when Congress abandoned bipartisan, bicameral PBM reforms as part of a stopgap spending bill. The new data comes ahead of a vote in Congress tomorrow on a continuing resolution to fund the government, where the policymakers could include much-needed structural PBM reform.

“Despite later admitting that he does not know what a pharmacy benefit manager (PBM) is, Elon Musk successfully tanked PBM reforms with nearly unanimous House support late last year,” said Emma Freer, Senior Policy Analyst for Healthcare at the Economic Liberties Project. “As predicted, without Congressional intervention, the Big Three PBMs have continued to abuse their market power, squeezing at least 326 pharmacies – 237 of them independent – out of business in fewer than 10 weeks and stranding their most vulnerable patients in pharmacy deserts without access to lifesaving care. Given these high stakes, it is critical that Congress stand up to these healthcare monopolist middlemen and pass structural PBM reforms that will save their constituents’ time, money, and lives.”

PBMs are middlemen who negotiate prescription drug benefits on behalf of health plans with drug manufacturers and pharmacies. The “Big Three” PBMs – CVS Caremark, Cigna Group’s Express Scripts, and UnitedHealth Group’s OptumRx – control nearly 80% of U.S. prescription drug claims. They leverage this market power to demand untenably lower reimbursement rates from independent pharmacies in exchange for inclusion in their networks. Many pharmacies accept these rates for fear of losing access to a large share of their customer base. But these rates are accelerating the pharmacy closure epidemic. Economic Liberties research shows that at least 326 pharmacies closed between Dec. 19, 2024, and Feb. 28, 2024. The vast majority of these closures – 237, or nearly 73% – were independent pharmacies; the remaining 89 were chain locations. Since Jan. 1, 2024, when Economic Liberties began tracking these closures, at least 3,179 pharmacies – or more than 5% – have closed their doors.

The Big Three PBMs also use their market power – combined with a rebate-driven business model that biases PBMs toward higher list price drugs, as Economic Liberties detailed in a February 2023 policy brief – to mark up drug prices by as much as 7,736%, according to the Federal Trade Commission.

As Economic Liberties has outlined in recent letters to Congress, the strongest PBM structural reform legislation would require PBMs to reimburse pharmacies fairly while eliminating the conflicts of interest that incentivize them to gouge patients, including:

• The Patients Before Monopolies Act (S.5503, H.R. 10362), introduced by Sens. Elizabeth Warren (D-MA) and Josh Hawley (R-MO) and Reps. Jake Auchincloss (D-MA-04) and Diana Harshbarger (R-TN-01) late last session, which would force health insurers and PBMs to divest their pharmacy businesses within three years.
• The Pharmacists Fight Back Act (H.R. 9096), introduced by Representatives Auchincloss and Harshbarger last session and ultimately co-sponsored by 55 bipartisan members, which would bolster independent pharmacy revenue by setting baseline pharmacy reimbursement rates in federal healthcare programs. The legislation would also prohibit PBMs acting on behalf of federal healthcare programs from engaging in anticompetitive business practices, such as patient steering and spread pricing, in which a PBM charges a health plan far more for a prescription than it reimburses a pharmacy for dispensing it.
• The Lower Costs, More Transparency Act (H.R. 5378) by Rep. Cathy McMorris Rodgers (R-WA-05), which would similarly require all state Medicaid managed care programs and the PBMs with whom they contract to reimburse pharmacies according to their acquisition and dispensing costs. In doing so, the bill would establish parity in pharmacy reimbursements across Medicaid managed care and fee-for-service settings. It would also prohibit spread pricing.

Learn more about Economic Liberties’s Break Up Big Medicine initiative to address healthcare consolidation here.

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