not used title

not used title

In the ongoing conversation around the role of pharmacy benefit managers (PBMs) in the supply chain, a new report further illuminates incentives that tie PBM revenue to higher list prices for medicines. The move by some PBMs to share discounts they receive with patients at the pharmacy counter is a step in the right direction, but it’s important to ensure PBMs aren’t just replacing revenue from retained rebates with hidden fees to protect their bottom line.

As the Department of Health and Human Services Office of the Inspector General observed in a recently proposed rule, the current system has resulted in misaligned incentives that can lead PBMs to favor medicines with high list prices and large rebates. But there is another aspect of how middlemen do business that deserves scrutiny: fees.

According to Pew Charitable Trust, PBMs nearly quadrupled the fees they charge biopharmaceutical companies – such as administrative and service fees – between 2014 and 2016. Total fees charged to biopharmaceutical companies by these middlemen increased from $1.5B in 2014 to $2.6B in 2015, and then doubled to nearly $5.6B in 2016. Along with rebates, these fees – which are typically based on the list price of a medicine – contribute to a system of misaligned incentives where middlemen make more money when the list price of medicines increase.

Despite an increase in the share of negotiated rebates shared with health plan and employer clients, total PBM revenue increased between 2014 and 2016. That’s in part due to the increasing administrative fees they charged biopharmaceutical companies. But PBMs aren’t just charging biopharmaceutical companies more than ever before – they also brought in a record total of $22.4B in revenue in 2016 by charging more to others in the supply chain, like health plans and pharmacies.

These findings come amid questions about why payers do not share the discounts they receive from manufacturers directly with patients.

To learn more about how we can fix misaligned incentives to improve patient affordability, visit LetsTalkAboutCost.org.

Robert Zirkelbach

Robert Zirkelbach is an accomplished public affairs executive with more than 20 years of experience shaping the debate and influencing policy on behalf of highly regulated industries and corporations. As Chief Public Affairs Officer & Head of Strategic Initiatives at the Pharmaceutical Research and Manufacturers of America (PhRMA), Zirkelbach leads public affairs, strategic initiatives and membership on behalf of America’s biopharmaceutical industry.

He oversees integrated public affairs campaigns that advance patient-first solutions, strengthen our health care system and preserve the role of the U.S. as the world leader in biopharmaceutical innovation. Since returning to PhRMA in 2023, he has elevated the industry’s voice in Washington, expanded PhRMA’s membership and spearheaded the organization’s five-year strategic plan.

Previously, Zirkelbach served as Global Head of Issues and Advocacy at ExxonMobil, where he led high-impact advocacy campaigns on issues central to the company’s mission, including climate change and plastic waste. During his tenure, he also oversaw a strategic risk function responsible for identifying and mitigating potential policy, geopolitical and reputation risks facing the company. Zirkelbach served as spokesman for America’s Health Insurance Plans (AHIP) during the pivotal debate and implementation of the Affordable Care Act. He started his career on Capitol Hill as press secretary for Congressman Jim Nussle (R-IA).

Zirkelbach is a graduate of Central College. He lives with his wife and two children in Washington, DC.

Robby Zirklebach

https://x.com/robzirk

https://www.linkedin.com/in/robzirk/

Chief Public Affairs Officer & Head of Strategic Initiatives

New poll: 2 in 3 voters prefer a candidate committed to lowering health insurance premiums

September 18, 2026

What AARP isn’t telling seniors about MFN

August 24, 2026

Policymakers should improve patient access and reject price controls

August 18, 2026

Insurers blame GLP-1s for rising costs. The data tells a different story.

August 14, 2026

The FTC’s PBM enforcement actions gave us a glimpse behind the curtain; it’s time to let the light in.

August 7, 2026

Nearly 1 in 4 patients initially denied access to IRA medicines

August 6, 2026

Message to USAging: Providers are raising concerns about coverage barriers

July 22, 2026

New PBM principles don't change the fundamental challenge: Access to lower-cost medicines

July 10, 2026

340B’s reality: A booming business for hospitals, pharmacies and corporate giants

June 25, 2026

Insurers are blaming medicines for premium hikes in Massachusetts. The state's own data suggests otherwise.

June 24, 2026

Briefing: Capitol Hill panel on "Healthcare Denial Crisis in America"

April 24, 2026

Survey confirms too many insured Americans face barriers to reliable health care

April 22, 2026

70% DENIED: How insurance denials are delaying and preventing care for millions of Americans

April 14, 2026

Hospitals drive nearly 80% of the U.S. health spending gap

March 25, 2026

No hassle, hidden markups or fees: AmericasMedicines.com

February 19, 2026

The Federal Trade Commission (FTC) takes important action to highlight and curb PBM abuses

February 17, 2026

Separating fact from fiction in the medicine supply chain

February 11, 2026

50-state poll says Americans are concerned that hospital markups hurt patients

January 27, 2026

Three things you should know from the insurer CEO congressional hearings

January 26, 2026

Can’t get your medicine? Don’t count on your insurer.

January 15, 2026

Stop, collaborate and re-evaluate: ICER’s pricing report

November 14, 2025

California’s landmark PBM crackdown: A wake-up call for reform

November 13, 2025

Middlemen mark up drug prices and keep discounts meant for you

November 10, 2025

Putting patients first: Breaking down barriers to care

October 28, 2025

Direct purchase programs can lower costs for patients

October 20, 2025

PBMs say they want lower priced medicines, so why don’t they cover them?

October 7, 2025

Historic biopharmaceutical investments: A prescription for America’s future

September 29, 2025

Why states struggle to deliver savings: Middlemen and 340B siphon dollars from patients and states

September 15, 2025

PBMs are hiding hurdles to essential care

August 20, 2025

New study: PBMs and commercial insurers are quietly blocking prescription access

July 30, 2025

North Carolina puts patients first with rebate pass-through law

July 29, 2025

PBMs, not patents, are blocking access to lower-cost medicines

July 23, 2025

Medicare Part D plans initially denied medicines for more than 70% of patients in four chronic disease areas

June 16, 2025

New “Balance the Scales” campaign highlights why Americans pay more for prescription medicines

May 21, 2025

How the 340B hospital markup program and PBMs drive up costs for U.S. patients

May 16, 2025

Foreign first pricing schemes don’t address why Americans pay more

May 15, 2025

The AHIP premium dollar corrected (again)

May 8, 2025

PBMs launch new ad campaign to block reforms

May 5, 2025

When middlemen own it all, patients pay the price

April 10, 2025

3 myths critics get wrong about intellectual property

March 28, 2025

New report finds more abuse of 340B program by hospitals and drug middlemen

March 24, 2025

A closer look at how health care consolidation drives up patient costs, creates barriers to care

March 17, 2025

Health care practitioners sound the alarm on middlemen-imposed barriers to patient care, need for policy change

March 13, 2025

Congress Keeps PBMs in the Hot Seat

March 6, 2025

Wrapping up the J.P. Morgan Healthcare Conference

January 16, 2025

FTC finds PBMs make billions in profit from marking up cancer, other critical generic drugs

January 14, 2025

PhRMA CEOs Tee Up Next Week's Health Care Conference

January 11, 2025

New study: Entities that don’t make medicines get half of what is spent on those medicines

January 7, 2025

Three things to know about 340B contract pharmacies

November 12, 2024

The PBM industry's desperate attempt to stop reform

November 12, 2024

PhRMA launches new ad calling for Congress to make sure savings go to patients, not PBMs

November 11, 2024

ICYMI: Grounding policy reforms in real lived patient experiences is key to improving outcomes

October 31, 2024

New PES survey: Out-of-pocket costs lead key health care priorities ahead of the November election

October 30, 2024

Guest Post: My health care vote

October 29, 2024

Insurers continue shifting more costs on to patients

October 28, 2024

Americans speak out on health insurance barriers and need for policy change, according to the latest Patient Experience Survey

October 28, 2024

ICYMI: The powerful companies driving local drugstores out of business

October 25, 2024

Hispanic Heritage Month: Fighting for Hispanic patients

October 7, 2024

PBMs and insurers off the hook: Sen. Sanders’ selective hearing on drug costs

September 24, 2024

Key voter insights two months from Election Day

September 10, 2024

Patient priorities in the 2024 election

September 10, 2024

Voters across all 50 states want state policymakers to focus on health insurance and PBM practices

July 30, 2024

WTAS: Voters voice concerns about PBM abuses, call on policymakers to act

July 19, 2024

PhRMA launches new ad in campaign exposing ways middlemen drive up costs

July 17, 2024

FTC report confirms PBMs profit at the expense of patients

July 10, 2024

New 50-state poll Americans want to hold health insurers and PBMs accountable for high out-of-pocket costs and other practices

July 9, 2024

ICYMI: Hidden markups at mail-order pharmacies increase costs for employers

July 2, 2024

ICYMI: What patients care about this election year

June 24, 2024

ICYMI: The Opaque Industry Secretly Inflating Prices for Prescription Drugs

June 21, 2024

ICYMI: Health care policy should be driven by patients, not politics

June 10, 2024

PhRMA Warns Federal Agencies: Consolidation and vertical integration among insurers, PBMs, and hospitals threaten patients

June 5, 2024

ICYMI: Innovation transforms lives but misguided federal policies threaten patient outcomes

May 30, 2024

Ongoing federal probes shed light on PBM and insurer practices

May 20, 2024

Critics repeat same, misleading narrative on potential “costs” of new medicines

May 7, 2024

WTAS: The consequences of consolidation and vertical integration

May 6, 2024

Insurance data: PBM reform has no material impact on premiums

April 24, 2024

New study finds insurers and PBMs increasing access restrictions in Medicare Part D

April 16, 2024

What recent rhetoric on the cost of diabetes and anti-obesity medicines gets wrong

April 9, 2024

3 Takeaways from POLITICO’s Health Care Summit

April 3, 2024

PBMs using 340B program to drive profits at patients’ expense

March 28, 2024

Four years later, Maryland board still hasn’t delivered for patients

February 12, 2024

Setting the Record Straight: Comparing U.S. drug prices to those in foreign countries hurts patients

February 7, 2024

When it comes to the future of innovation, the ball is in policymakers’ court

January 22, 2024

How the 340B program became a PBM giveaway

December 11, 2023

ICYMI: When middlemen get in the way, it’s the patients who lose

December 5, 2023

Get the facts on PCMA’s newest attempt to avoid accountability

December 4, 2023

ICYMI: WSJ — Same Drug, Two Prices: Why the Higher Price Prevails

November 15, 2023

ICYMI: 3 takeaways on the IRA’s unintended consequences from America’s Physician Groups’ 2023 annual fall conference

November 6, 2023

One year to Election Day: Four voter priorities to watch

November 6, 2023

ICYMI: Scott LaGanga and Matt Salo deliver a State of the Industry Report

October 25, 2023

New poll shows strong bipartisan support for PBM reform

October 20, 2023

4 truths about state government price setting

October 10, 2023

ICYMI: Government watchdog report finds patients in Medicare Part D paid billions more for medicines than insurers and PBMs

September 28, 2023

New analysis shows PBMs use fees as a profit center

September 18, 2023

It’s PBMs, not patents, blocking competition 

September 14, 2023

New PhRMA ad exposes yet another way PBMs get between patients and their medicines

September 5, 2023

AARP’s latest misleading report

August 11, 2023

New report: Hospitals mark up medicine prices 500%

August 2, 2023

read more

August 2, 2023

Navigating the Patient Experience Survey: Protecting Lifelines to Access and Innovation

July 26, 2023

Three things to know from the latest Patient Experience Survey

July 20, 2023

Key considerations as Congress works towards PAHPA reauthorization

July 12, 2023

ICYMI: PBM exec admits choosing profits over patients

June 2, 2023

Insulin: Key Facts on Access & Affordability

May 10, 2023

4 key facts on medicine prices and spending

May 9, 2023

4 Things to know about PhRMA’s new 50-state poll

May 4, 2023

New PhRMA ad campaign sheds light on PBM abuses

May 1, 2023

Three facts about health care spending

April 25, 2023

AHIP’s latest misinformation campaign & what it’s trying to hide

April 24, 2023

ICYMI: PhRMA President and CEO Stephen J. Ubl discusses patient affordability

April 7, 2023

States can support access to medicine as COVID-19 Public Health Emergency ends

April 5, 2023

Arkansas puts patients first with new share the savings law

April 4, 2023

Key Trends: Patient experience data reveal how insurers and middlemen impose barriers in health care

March 29, 2023

Insurer and PBM tactics are shifting higher costs to patients with chronic and complex conditions

March 2, 2023

Holding pharmacy benefit managers accountable

February 23, 2023

Stopping pharmacy benefit managers from “gaming the system”

February 22, 2023

Senate hearing to examine bipartisan reforms to rein in middlemen

February 16, 2023

Minnesota lawmakers are letting PBMs off the hook, and threatening patients’ access to medicines

January 31, 2023

ICYMI: Cancer death rate continues to decline due to treatment advances

January 25, 2023

Novel medicines approved in 2022 offer increased treatment options for patients

January 23, 2023

ICYMI: PhRMA kicks off the year at the 2023 J.P. Morgan Health Care Conference

January 19, 2023

Study finds hepatitis C cure saved Medicaid $15 billion

January 5, 2023

ICYMI: PhRMA COO Lori Reilly speaks about the health care agenda for the next Congress

December 9, 2022

In their own words: Financial barriers exacerbate access challenges for insured Americans

December 8, 2022

New data show how insurers and middlemen shift Rx costs onto patients

November 16, 2022

In their own words: Insured Americans struggle to navigate complex coverage

October 26, 2022

New comments outline ways to protect patients from health plans and PBMs who profit from patient assistance

October 7, 2022

Busting 3 Myths About Copay Coupons

October 5, 2022

Navigating the patient experience: Burdens and barriers standing between patients and their care

September 12, 2022

Making coupons count for patients at the pharmacy counter

August 25, 2022

Insulin and reconciliation

August 15, 2022

By the Numbers: Patients lose when the government sets prices

July 8, 2022

Patients win as West Virginia implements first-in-nation share the savings policy

July 8, 2022

3 things voters are concerned about when it comes to their health care coverage

July 7, 2022

Prescription drug prices are not fueling inflation

July 6, 2022

Patients support state action requiring PBMs and insurers to share savings and cap costs for medicines

June 16, 2022

New poll shows voters sounding the alarm on health insurance companies and PBMs

June 6, 2022

PhRMA warns of the growing influence of middlemen over patient access and out-of-pocket costs for patients

May 31, 2022

Report finds PBMs are increasingly restricting patient access to medicines

May 25, 2022

ICYMI: PhRMA CEO Stephen J. Ubl spotlights lessons learned during COVID-19

May 13, 2022

Annual projections from NHE compared to actual health care spending

May 5, 2022

What’s really happening when it comes to prescription drug costs

April 27, 2022

Analysis: States can help patients save nearly $1,000 annually on their medicines

April 21, 2022

New analysis confirms hospitals markup prices for oncology therapies

April 21, 2022

How standardized plans can improve patients’ access to medicines

April 18, 2022

Correcting the record: Putting medicine costs and spending in context

March 24, 2022

Sharing rebates can save Americans with diabetes 500 each year and improve adherence

March 16, 2022

Guest Post: If we truly want to cure complex diseases, politicians should reject price setting

March 14, 2022

Veterans Affairs 101: Three charts show how the VA system differs from Medicare

March 11, 2022

If drug prices are growing below the rate of inflation, why are patients still feeling the sting at the pharmacy?

March 8, 2022

Government price setting leaves behind families counting on new medicines

February 23, 2022

340B 101: Three charts show the program maximizes hospitals’ bottom line with little consideration for patients

February 8, 2022

Government price setting won’t stop insurers from shifting costs to patients

February 2, 2022

Research and development continues long after a medicine is initially approved

February 1, 2022

New poll of all 50 states and 435 Congressional Districts shows perils of so-called Medicare “negotiation”

January 25, 2022

CBO reaffirms our innovation ecosystem leads to improved lives, long-term savings

January 21, 2022

New study finds more than half of brand medicine spending goes to the supply chain and others

January 7, 2022

New NHE data show the true picture of health care spending

December 22, 2021

3 things to know about the importance of post-approval research and development

December 6, 2021

Guest post: Congress should not put future innovation at risk

November 29, 2021

What is missing in the current drug pricing plan

November 23, 2021

ICYMI: PhRMA CEO speaks at STAT Summit about government price setting

November 19, 2021

In the current health care debate, Congress has lost sight of what matters to U.S. voters

November 15, 2021

CMS finds medication adherence saved Medicare up to 46.6B in avoided health care costs between 2013 and 2018

October 19, 2021

ICYMI: New study confirms policies like H.R. 3 could significantly reduce drug development

October 18, 2021

New poll shows Americans reject Medicare negotiation once they learn more about the policy

October 15, 2021

To drive up profits, hospitals continue unnecessary medicine mark-ups, burdening patients, employers and health care system

October 14, 2021

What is Kaiser Family Foundation up to?

October 12, 2021

Recognizing Hepatitis R&D on World Hepatitis Day

July 28, 2021

New reports shed light on key facts about medicines and affordability

June 8, 2021

How strengthening the biosimilar marketplace benefits patients

May 18, 2021

New report demonstrates development of new medicines relies on private sector expertise and investment

May 10, 2021

New data from insurers show detriments of copay accumulator adjustment programs

April 28, 2021

West Virginia becomes the first state to lower patient costs by sharing the savings

April 20, 2021

Nearly 40% of commercially insured patients face half their annual out-of-pocket expenses from just one health care encounter

March 2, 2021

Top five issues voters want addressed in the administration’s first 100 days

February 18, 2021

Insurers shift medicine costs to patients with severe chronic illnesses

February 1, 2021

The new Administration should reconsider a recent HHS rule that could negatively impact patient access and affordability

January 27, 2021

New insulin report highlights how incentives benefit middlemen, harm patients

January 22, 2021

Key facts: The final rebate rule will be a positive change for patients

January 19, 2021

New data show retail medicine prices fell in 2019

January 13, 2021

Fact Check: How hospitals continue to drive health care spending

December 3, 2020

Accumulator adjustment programs lead to surprise out-of-pocket costs and nonadherence, analysis finds

November 19, 2020

PhRMA submits comments on ways to refocus the 340B program on America’s vulnerable patients

November 2, 2020

Study finds biopharmaceutical innovation is responsible for 35% of the increase in life expectancy from 1990 to 2015

October 21, 2020

Survey found insurance premiums grew faster than inflation in 2020

October 20, 2020

Study finds middlemen excluded nearly 850 medicines from formularies this year

September 17, 2020

Manufacturer cost-sharing assistance programs can save chronically ill patients hundreds to thousands of dollars annually

August 19, 2020

Commercial health plans have increased patients’ out-of-pocket costs by over 50% in some therapeutic areas

August 12, 2020

Commercial health plans transition from copays to coinsurance and deductibles has increased patient out-of-pocket costs

August 6, 2020

Four things to know about the IQVIA “Medicine Spending and Affordability in the U.S.” report

August 5, 2020

New data show commercially insured patients face increasingly high cost sharing for brand medicines

July 30, 2020

Payers subject 80% of new RA and MS patients to utilization management restrictions

July 22, 2020

Study finds the pharmaceutical industry retains a smaller share of revenue than research-intensive industries

July 14, 2020

ICYMI: Pharmacy benefit managers increasingly exclude medicines from formularies, restricting patient access

June 1, 2020

New rule makes it harder for patients to lower their out-of-pocket costs

May 20, 2020