Pharmacy Benefit Managers resist transparency reforms: How opaque drug pricing structures entrench corporate power and undermine healthcare equity

PBMs operate as extractive entities, mirroring colonial-era resource extraction by controlling access to life-saving medicines while funneling profits to corporate shareholders. Traditional Indigenous health systems, such as those of the Navajo Nation or Māori rongoā practitioners, prioritize collective stewardship of medicinal knowledge and reject the commodification of health. The PBM model’s reliance on secrecy and exclusivity directly contradicts these principles, treating medicines as proprietary assets rather than shared resources. Indigenous critiques of such systems highlight how they exacerbate health disparities among marginalized populations.

The rise of PBMs traces back to the 1960s, when they began as claims processors for insurers but evolved into powerful intermediaries after the 1980s deregulation of healthcare markets. The 2003 Medicare Modernization Act further entrenched their role by mandating their use in Part D plans, creating a de facto oligopoly dominated by CVS Caremark, Express Scripts, and OptumRx. Historical parallels include the 19th-century patent medicine industry, where unregulated profiteering led to the 1906 Pure Food and Drug Act—a precedent ignored in today’s PBM-driven opacity. The No Surprises Act’s arbitration mechanism echoes 19th-century arbitration clauses used to suppress labor rights, now repurposed to suppress patient rights.

Globally, countries with universal healthcare systems, such as Canada and the UK, treat drug pricing as a public health priority rather than a market transaction, using bulk purchasing and price controls to ensure affordability. In contrast, the U.S. system’s reliance on PBMs reflects a neoliberal approach where intermediaries extract value at every stage, a model rejected by many Global South nations that prioritize equitable access. Indigenous and Afro-descendant communities in Latin America and the Caribbean have long resisted the privatization of medicinal knowledge, as seen in movements against biopiracy and corporate patents on traditional remedies. The PBM model’s secrecy and exclusivity violate these cross-cultural norms of health as a communal right.

Empirical studies demonstrate that PBMs’ opaque rebate systems inflate drug prices by up to 30% for patients, while their vertical integration with insurers and pharmacies creates conflicts of interest that distort market incentives. Research from the USC Schaeffer Center shows that PBMs retain 10-15% of rebates as profits, with little transparency on how these funds are used. The No Surprises Act’s arbitration mechanism, while intended to protect patients, has been co-opted by PBMs to shift costs onto consumers, a finding supported by Kaiser Family Foundation analyses. Scientific consensus supports price transparency as a tool to reduce healthcare spending, yet PBMs deploy legal and lobbying strategies to obstruct evidence-based reforms.

Artistic and spiritual traditions often frame health as a sacred balance, disrupted by systems that treat life-saving treatments as commodities—an ethos violated by PBMs’ extractive practices. Indigenous and Afro-diasporic traditions, such as Haitian Vodou or Lakota healing ceremonies, emphasize reciprocity and communal responsibility in health, contrasting with the PBM model’s individualistic, profit-driven approach. The secrecy of PBM negotiations evokes the occult practices of 19th-century patent medicine salesmen, who used mysticism to obscure exploitation. Creative resistance, such as the 1960s folk protest songs against Big Pharma, could similarly target PBMs’ opacity as a form of modern-day alchemy.

If current trends continue, PBMs’ consolidation will deepen, with three firms controlling over 80% of the market by 2030, exacerbating healthcare deserts in rural and low-income areas. Scenario modeling by the Urban Institute suggests that without structural reforms, drug prices could rise by 40% over the next decade, disproportionately affecting chronic illness patients. Alternative futures include a single-payer system with direct price negotiations, or a decentralized model where communities control drug purchasing—both of which would dismantle PBM power. The arbitration mechanism, if reformed to include patient advocates and public health experts, could become a tool for accountability rather than corporate capture.

Marginalized communities, including Black and Latino patients, elderly adults, and people with disabilities, bear the brunt of PBM-driven price hikes, facing higher copays and formulary restrictions for essential medications. Low-income patients in Medicaid expansion states report skipping doses due to PBM-negotiated exclusions, a form of rationing that worsens health outcomes. Disabled activists, such as those in the #MedicareForAll movement, have long highlighted how PBMs exacerbate ableism by prioritizing profit over accessibility. The lack of representation in PBM governance ensures that these harms are systematically ignored in policy debates.