PBM Sector Could Be Poised for ‘Profound Transformation’

Jul 24
Jul 24, 2025

In recent years, a harsh spotlight has been trained on PBMs, which stand accused of inflating the cost of prescription drugs and engaging in opaque business practices. While federal legislative reform has repeatedly foundered, state-based PBM regulations are proliferating. Meanwhile, the country’s three dominant PBMs have rolled out revamped models aimed at answering calls for rebate pass-through, simplicity and transparency.

With all those moving parts, what lies ahead for an embattled industry, which includes disruption-minded startups as well as the oft-criticized, vertically integrated CVS Caremark, Express Scripts and Optum Rx?

“There’s a frustration with the business practices, but I do think it’s addressable,” says Dan Mendelson, CEO of Morgan Health and founder of the consulting firm Avalere. “When the nursing home industry had all sorts of problems, they figured out a regulatory construct that was going to work for them and work for the government, and we’re at one of those points right now [with PBMs].”

For Radar on Drug Benefits’ final issue, we asked industry experts what they think is in store for the PBM sector — in terms of reform, innovation, diversification and more.
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Leslie Small

Leslie has been working in journalism since 2009 and reporting on the health care industry since 2014. She has covered the many ups and downs of the Affordable Care Act exchanges, the failed health insurer mega-mergers, and hundreds of other storylines spanning subjects such as Medicaid managed care, Medicare Advantage, employer-sponsored insurance, and prescription drug coverage. As the managing editor of Health Plan Weekly and Radar on Drug Benefits, she writes and edits for both publications while overseeing a small team of reporters who also focus on the managed care sector. Before joining AIS Health, she was a senior editor for the e-newsletter Fierce Health Payer, and she started her career as a copy editor at multiple local newspapers. She graduated with a dual degree in journalism and political science from Penn State University.