It Took Years for Congress to Enact PBM Transparency, Delinking. What About Vertical Integration?

In February, Congress finally took action to rein in PBMs via the Consolidated Appropriations Act of 2026. It included reforms like the delinking of PBM compensation from the price of a drug in Medicare Part D and more detailed reporting to plan sponsors.

But this is only the tip of the iceberg when it comes to the PBM reform that advocates are calling for. Many would like to see Congress address vertical integration with insurers and pharmacies. The three biggest PBMs are owned by large insurance companies: CVS Health’s Caremark, UnitedHealth Group’s Optum Rx and Cigna’s Express Scripts. 

A bill introduced in February by Senators Elizabeth Warren (D-Massachusetts) and Josh Hawley (R-Missouri) would take on this issue. The Break Up Big Medicine bill would “prohibit a parent company from owning a medical provider or management services organization and a PBM or an insurer.” It also takes action beyond PBMs, such as banning a parent company of a prescription drug or medical device wholesaler from owning a medical provider or management services organization. 

However, according to several healthcare policy experts, it’s not likely that this will pass.

“I think the chances of it passing are slim to none. I think the chances of it getting attention and actually starting conversations and possibly additional hearings might be likely, but I would be shocked if this got passed,” said Chris Deacon, principal and founder of VerSan Consulting.

One only needs to look at how long it took for the first set of PBM reforms to pass to know that the path ahead for this bill is rocky.

While it’s difficult to put a number on just how many bills have been introduced or reintroduced that involve PBMs, one of the early bills can be traced back to 2011: the Pharmacy Competition and Consumer Choice Act. This bill would have increased transparency of PBMs.

Bipartisan congressional efforts to control PBMs really started to ramp up in the last decade, first with the introduction of the Prescription Drug Pricing Reduction Act of 2019, which would have required more PBM reporting of rebates and discounts, according to Meredith Freed, senior policy manager with KFF’s Program on Medicare Policy. 

Since then, numerous other bills involving PBMs have been introduced or reintroduced, most not even making it past being referred to committee (at least 20 were introduced during the 2023-2024 congressional session). However, a few have gotten out of committee, notably the Pharmacy Benefit Manager Transparency Act of 2023 and the Modernizing and Ensuring PBM Accountability Act of 2023.

The closest the U.S. got to federal PBM reform (prior to the Consolidated Appropriations Act of 2026) was in December 2024 when Congress attempted to pass a spending bill that included changes to PBMs, like disconnecting PBM revenue from drug prices in Medicare Part D. But Elon Musk argued that the bill included too much government waste, and President Joe Biden later signed a narrower spending bill that left out PBM reform. 

“There have been a fair number of bipartisan efforts over the years. … Depending how you view it, I think some people from the pharmacy side might have said this is a multi-decade effort to address PBM reform. But in Congress, the momentum has really picked up in the last decade,” Freed said.

It’s worth noting that some states have enacted PBM reform, most recently California. Its law bans spread pricing, the practice of when a PBM charges a health plan more for a drug than it pays the pharmacy and keeps the difference as profit. Arkansas also passed a law that would prevent PBMs from owning pharmacies, but a federal judge blocked it from being implemented. Arkansas appealed this decision. 

Could the Break Up Big Medicine bill pass?

It’s highly unlikely that the Break Up Big Medicine bill will pass, particularly after the Consolidated Appropriations Act of 2026 passed, according to Deacon of VerSan Consulting. The Department of Labor also recently proposed a rule that included additional PBM reforms, and Congress may be waiting to see how these initial reforms pan out.

The bill also includes broader reforms preventing parent companies of a prescription drug or medical device wholesaler from owning a medical provider. Deacon noted that while Warren isn’t wrong when she says companies have manipulated the healthcare system to enrich themselves, this “didn’t happen in the dark.” It happened in plain sight and often with the support of lawmakers to enable better coordination and more efficiency. And undoing this will be extremely difficult and unrealistic in the near term, Deacon said.

She added that there are economic factors to consider as well.

“The profits of these large insurers and healthcare conglomerates don’t just go to corporate executives or ‘greedy shareholders.’ They are deeply embedded in public pension funds, retirement accounts, and 401(k)s held by millions of Americans. … So while the concerns about consolidation are real, reversing decades of structural integration across the healthcare system is far more complicated than simply passing a bill; simply a bridge too far for politicians today,” she said. 

On an episode of MedCity Debunked, Samir Batra, managing partner of Health Innovation Pitch, echoed these comments, stating that this bill — while appealing — would cause “epic destruction” of existing industry structures. That’s because it goes beyond just aiming to break up the legacy PBMs that dominate the market. It also seeks to break up companies like Cardinal Health and McKesson — companies that aren’t even PBMs.

“Epic destruction” aside, the political and legal hurdles would make it highly unlikely to succeed, especially considering the lobbying power companies like UnitedHealthcare, CVS Health and Cigna have, he said.

A.J. Barbarito, associate attorney at Frier Levitt, agreed that this bill is unlikely to pass, especially as a standalone bill.

“Congress is not famous these days for passing many laws,” he said. “The PBM bill that did finally get through was [part of] a larger budgeting act. That’s the kind of law that typically gets through when we’re seeing any major reform or any major law being passed, it is with an appropriations bill. A standalone bill like this, I don’t see a great deal of potential for passing.”

The fact that it is a bipartisan bill sponsored by one of the most liberal members of Congress (Warren) along with one of the most conservative members of Congress (Hawley) may work in its favor, Barbarito noted. Still, this bill is likely too extreme for most Republicans and even some “middle-of-the-road” Democrats, he said.

Meanwhile, Patients for Affordable Drugs, an advocacy organization, believes the bill could go either way. Some lawmakers may argue that they’ve already enacted PBM reform, so why bother going even further? However, Americans want prescription drug reform, with 9 out of 10 urging Congress to do more to lower drug prices.

“I think there will be a continued appetite to go after insurance and vertical integration,” said Merith Basey, CEO of the organization. Patients for Affordable Drugs’ first priority, however, is patent reform with pharma companies, she noted.

While most PBM reform bills have stalled before gaining meaningful traction, their introduction still serves an important purpose, according to Barbarito.

“I do find there to be value in putting forth bills like this. … I think that it is very important for people to start discussing the problem of consolidation and vertical integration. … It is very obvious that there is a profound conflict of interest with a PBM that contracts with pharmacies setting rates for the pharmacy that it itself owns, and setting rates for its own competitors. It’s viscerally disturbing to see a system that currently permits that,” he said. “What I really like about this bill is that it brings that to light, and it opens up a conversation for folks.”

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