Facing growing scrutiny for blocking and denying access to care, PBMs are rolling out a new set of “policy principles” meant to shift the blame. But strip away the rhetoric, and the reality is unchanged: the very middlemen claiming to promote affordability are the ones driving patients’ frustrations, putting up barriers, delaying treatment and too often standing between people and the care they need. PBMs say they’re for lowering costs, but their own policies often limit access to low-cost medicines that patients have come to rely on in the form of generics and biosimilars.
The big picture: Our intellectual property (IP) system fuels investment in the development of new innovative medicines to transform patient health while paving the way for low-cost generic and biosimilar entry that most patients should have access to.
Here’s what you need to know:
- Every generic and biosimilar medicine depends on an innovative brand medicine to first reach the market.
- Nearly 90% of prescriptions in the U.S. are filled with lower cost generics and biosimilars.
- These low-cost generics, which have an average copay of only $6.95 and can lead to price reductions of nearly 85%, provide long-term value to patients and the health care system.
- Collectively, generics and biosimilars have saved $3.4 trillion over the last 10 years alone.
Market control shapes outcomes. When a small number of companies make formulary and cost sharing decisions, access to generics depends on their incentives, not just market competition. All of the big three PBMs are linked to affiliated insurers and pharmacies, giving these massive companies a hand in nearly every step of a patient’s prescription journey, from coverage decisions to the pharmacy counter.
Together, those PBMs control 80% of the prescription drug market, giving them the power to:
- Decide which generics are covered and which ones are excluded
- Determine what patients pay at the pharmacy counter
- Control how quickly patients can access lower-cost options
In practice, what this means for patients is:
- Restricted access: generics are meant to increase competition and reduce costs. But since 2014, PBMs have excluded 900% more generics from commercial formularies. They can also place them on unfavorable tiers on their formularies.
- Higher out of pocket costs: PBMs negotiate rebates tied to list prices, which experts believe may create incentives to favor more expensive products. Lower prices in the supply chain don’t guarantee lower costs at the pharmacy counter.
- Delays and barriers: PBMs have been slow to adopt the use of generic medicines. Only 24% of Medicare Part D plans and half of commercial plans covered newly launched generics in 2025, forcing patients to wait for access, per an AAM report.
Bottom line: The intellectual property system doesn’t stand in the way of affordability, it makes both innovation and long-term competition possible. It helps deliver new medicines today and lower-cost generics and biosimilars tomorrow. Undermining IP won’t help patients access medicines. Instead, it will only make it harder to develop the next generation of treatments.
Learn more at PhRMA.org/PBMs.
Caroline Dunne
Caroline Dunne serves as a Director of Public Affairs at PhRMA, where she leads communications strategies and initiatives for the organization's cost and value priorities. She brings extensive experience in advocacy strategy, with a background that spans gubernatorial and presidential politics. Caroline is passionate about contributing to an industry whose innovations have had a meaningful impact on her family's life.