Blog Post

Congress is Fighting the Wrong Pharmacy Battle

Better Plan Choices Would Lower Drug Costs, Not PBM Breakups, LDI’s Mark Pauly Says

August 4, 2026

By:

Mark V. Pauly, PhD

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A person stocking a shelf with medicines.

Patients don’t lose sleep over who owns their pharmacy. They fret over their insurance premium, over whether they must pay cash for a prescription, or wait for prior authorization to get their drug covered. Yet lawmakers are spending their limited attention seeking to ban insurers from owning drug stores or stop them from sending their insureds to their own mail-order pharmacies.

Lawmakers are chasing the wrong thing. They would be better off fixing the lack of good information that consumers actually contend with.

When lawmakers in Congress take aim at insurer-owned pharmacies and seek to separate them from their corporate owners like UnitedHealthcare, CVS/Caremark, and Cigna, that satisfies politicians’ short-term political need to look useful. But rearranging the parts of transactions will not reduce drug prices or insurance premiums. Higher prices paid to pharmacies you own means higher claims costs; you are just moving funds from one insurer pocket to another.

A freer market would do more. Lawmakers would be of most help by providing you details on the best drug benefit package in town so you can shop around.

Most people get drug insurance as part of their compensation package at work, and if you are one of them, you likely have few choices. But it is your firm’s job to come up with the best combination of reasonable premiums, coverage, and claims payments. After all, it would be foolish for an employer to offer its workers a drug benefit that makes them mad and even think of quitting.

Yes, big firms dominate insurance markets. But in almost all states, including the Philadelphia area, the biggest is a Blue Cross plan, which, interestingly, is not a target of the proposed legislation.

If your employer’s VP for benefits is frustrated in facing off with United, CVS/Caremark, and Cigna, don’t feel sorry for them. Negotiating a good deal is what they are paid to do — on behalf of workers.

Health insurance is expensive because care is expensive.

So here’s what businesses can do, besides paying close attention to the premiums and coverage options insurers offer: They can be prepared to go around large insurance carriers who offer to administer their insurance benefits for them and contract with other new PBMs or insurers who are willing to perform that task without paying more for drugs in a company store. They can work with consultants who can find them the best deal. And they can band together in buying groups to channel their business to insurance administrators who offer the best premiums.

And if you buy insurance as an individual (on an Obamacare exchange or another market), you should pay attention to insurers’ menus of drug insurance premiums, the comprehensiveness of coverage, and the amount of red tape. Put time and thought into making comparisons, and keep your eye on the bottom-line measures of premiums and coverage — not on who is associated with which drugstores.

You might also consult an insurance broker for help in assembling information and then make your own choice, regardless of the deals insurers strike with drug stores or drug companies.

It’s the insurance package that matters.