A summary of remarks on PBM reform and the FTC–ESI settlement by speakers at last month’s Association for Accessible Medicines’ Access 2026 conference.

The Association for Accessible Medicines’ (AAM) Access 2026 conference in Miami February 23-25 was perfectly timed to take advantage of perhaps the most important health care—related events of the year: the passage of the Consolidated Appropriation Act’s pharmacy benefit manager (PBM) reforms and the Federal Trade Commission (FTC) settlement with Express Scripts (ESI), which almost certainly will lead to agreements with the other big 3 PBMs. In two sessions at AAM, two main players in shaping PBM reform over several years discuss their reactions and expectations.

On the Long Road to PBM Rebate Changes With Scott Gottlieb

Scott Gottlieb, MD, former FDA Commissioner during the first Trump administration, was part of the effort to enact its Biosimilar Action Plan to nudge biosimilar uptake in the right direction. Another of the pro-biosimilar efforts by he and then Secretary of Health and Human Services Alex Azar was the planned removal of safe harbor protection for drug rebates. Though some of these efforts made it to the finish line, the use of drug rebates to ensure PBM profits and to disadvantage lower-priced pharmaceuticals survived their attempts. At the AAM conference in Miami last week, Dr. Gottlieb restated, “If there was ever PBM actions that can prove their anticompetitiveness, this is it!”

Dr. Gottlieb believes that “you can take the entire construct we made, tailor it to just these circumstances today. The cost of implementing the rule [to remove the rebate safe harbor] will save money in this narrow biosimilar application.”

Lacking that, he still believes that the settlement between the FTC and ESI “was profound. The issues of the rebates flowing back to consumers, the writing’s on the wall. A lot of the changes are happening absent legislation action.” However, he believes that with the reforms achieved through the Consolidated Appropriations Act of 2026 and the FTC–ESI settlement, “additional PBM reform is unlikely, though we may not have gone far enough,” said Dr. Gottlieb. Still, he believes that CMS can take additional action, in the way it directs companies to design formularies.

ERISA Employers Can Celebrate Freer PBM Markets

A jubilant James Gelfand, JD, President and CEO, The ERISA Industry Committee (ERIC), exclaimed, “We won! We’ve forced transparency on the PBMs, forced pass-through rebates, and we’re ready to celebrate. This will make it very hard for PBMs to make money on arbitrage. We think it’s transformative.”

Mr. Gelfand noted that Congress is still considering additional changes, one of which is to address the request-for-proposal process. This is necessary because of the cozy relationship between the big PBMs and the employer benefit consultants and brokers. “If the PBMs are in cahoots with the brokerage/consulting companies to keep their business, it will make it very hard for these other PBMs to come in with innovative models and to apply fiduciary standards,” he said.

The PBMs have said that employers love rebates, according to Mr. Gelfand, saying they go to the company’s bottom line. ERISA rules prohibit this: “We can’t use the rebates for anything but to reduce healthcare costs.”

After these reforms are applied, 98% of our employer members still see a role for PBMs, he said. “We don’t want to get into the PBM business.”

Free markets need competition, information, and choice. The rebate pass-through provision is the most important of the reforms. His organization, ERIC, has been advocating for PBMs for many years. Mr. Gelfand remarked, in the Consolidated Appropriations Act of 2021, “we got a provision in place that aimed at revealing the compensation of the vendors that work for employers in employer-sponsored health benefit plans. The Department of Labor interpreted that to mean just brokers and consultants. But from the beginning, we had intended this to also include PBMs. Legislators sent letters to the Department of Labor, telling them they forgot to include PBMs. It took another 5 years to get this changed.”

PBMs and Employer Benefit Consultants: Only a Minor Conflict of Interest?

Employers take advice from consultants and brokers, who help them choose their PBM. They help them decide whether they should be part of a purchasing collaborative, or whether they should contract directly with pharmaceutical companies. “Yet, these third parties are getting paid by the PBM, which makes it not very reliable advice,” asserted Mr. Gelfand. “And we have the same issue with the PBM who tells us, ‘Trust us, you want to go with the AbbVie drug, it’s been out for years, it’s reliable, and the rebate is awesome!’ If I ask them how much of a rebate they receive, they say, ‘We’re not going to tell you that. It’s not important.’”

The Department of Labor will have to unravel the gordian knot of how PBMs profit, opening the employer’s eyes to how PBMs are earning their money. “Employers pay 75 cents out of every health care dollar, so it’s a big deal if we’re being steered towards the higher-priced product. We’ve been ‘trusting’ the PBMs for decades that we’ve been getting the lowest net-cost drugs. But it can’t be explained to us exactly how it’s the lowest net-cost product.”

Instead, the PBM responds, “You have to look across the entire book of business, because having this drug and its bundled rebate is complicated and can’t be easily explained to you.” Mr. Gelfand believes it may be 18 months before a final rule is released by the Department of Labor, but “all that is going to be over.”

We can’t effectively legislate against specific behaviors of the PBM (like spread pricing or rebates) because of the time it takes to pass a Congressional proposal. “The PBMs have very smart people and will always be a step ahead of us, and maybe three steps ahead of Congress because they are so slow to act,” said Mr. Gelfand. “Fundamentally, you can’t just keep going after these rifle shots to legislate their behavior. You must legislate a new business model or paradigm, or they will find ways to get around it. That’s why we think PBMs should be fiduciaries. As a fiduciary, you cannot just invent new ways to cheat your customer. Under ERISA, fiduciaries cannot waste money under the plan, and they must make decisions that are prudent and in the best interests of the beneficiaries of that plan. There’s no way to fit these nasty arbitrage tricks under these two rules. Unfortunately, we’re probably years away from getting this done.”

This article was written by our Director of Content, Stanton Mehr. Stan is has been writing commentary and reporting news about the biosimilar industry since the submission of the first biosimilar 351(k) application to the FDA 13 years ago. Since that time, BR&R has been tracking the US biosimilar marketplace, with the industry’s original, comprehensive and updated database of biosimilar filings with the FDA.

National PBM reform does not address private labeling by PBMs and their subsidiaries directly, but it does imply that PBM private labels will not hold up over the long term.

Since the announcement of the Federal Trade Commission (FTC) and Express Scripts (ESI) settlement, there has been some speculation regarding the effect of the settlement and national PBM reform overall on the potential growth of the private-label biosimilar channel. Whereas neither the national PBM reform provisions of the Consolidated Appropriations Act (CAA) nor the FTC settlement directly addresses private labeling, you could make the argument that this relatively new revenue channel will be negatively affected.

Spread Pricing Before or After Reaching the Pharmacy

The spread-pricing provisions of the CAA address spread pricing inside the pharmacy but not outside of a pharmacy. That is, a PBM’s distributor, like Cordavis, may purchase the unbranded biosimilar from a manufacturer, like Sandoz, at one price, and relabel it and resell it at a higher price. This is not subject to national PBM reform: Like a drug manufacturer at launch, the distributor can name a list price for its relabeled drug.

A PBM’s Fiduciary Responsibility and Conflict of Interest

The strongest, significant barrier to the private labeling status quo is the fiduciary responsibility imposed on PBMs. A PBM-owned private-label distributor creates a conflict of interest that is hard to reconcile.

Although a PBM’s private-label biosimilar may be amongst the least-expensive drugs available, but for a self-insured employer client, for instance, why would you tolerate this incentive, which allows a PBM to earn more money off the backs of your covered workers?

The PBM’s transparency and reporting mandates would seem to ensure that a potential conflict-of-interest situation is disclosed to its clients. Drug unit sales or at least biosimilar market share must be reported on a regular basis.

Thus, the PBM will have to justify its coverage preference for the private-label brand(s). Again, if pricing of that private-label brand is amongst the best deals around, that might be justification enough.

Take into consideration the costs of a private-label product: A share of the profits must go to the original biosimilar manufacturer as part of this relabeling arrangement. The profits must also pay for any other costs related to the relabeling of the product. This also does not consider any royalties that the biosimilar manufacturer may still be paying to the reference drug maker under any patent or launch settlement. As a result, the private-label product is unlikely to be the least expensive (by net price) biosimilar in a drug category. This is definitely not the case with Quallent’s products, which are more mid-WAC than low-WAC.

Rebate Revenues and the Gap That Must Be Filled

The question thus remains whether the private-label channel will continue to grow in influence or withers away as a result of PBM reform. The mandates for rebate pass-throughs will leave a sizable hole in PBM revenue. As national pressure has ratcheted up the urgency for rebate transparency, the PBMs have been working to shrink their dependence on rebate revenues. This has been achieved mostly by increasing administration and service fees. For the big 3 PBMs, this meant raising new revenues through private labeling. Therefore, PBMs will no doubt be reluctant to drop this relatively new, significant revenue source. It may take several years before the provisions of national PBM reform truly affect the private-label channel. For the biosimilar industry, these are extremely important considerations, as private labeling has, depending on the company and drug, increased and decreased biosimilar market access. For drug categories with heavy competition, every biosimilar company worries about making a private-label deal and the implications for failing to make one.

It should also be noted that private labeling has just entered the realm drugs covered under the medical benefit (e.g., McKesson’s pegfilgrastim private label). The implications of this development in the race for Keytruda and Opdivo biosimilars cannot be overemphasized.

Overall, national PBM reform is a very good thing for the biosimilar industry. If private labels are a casualty of this trend, you won’t find much sympathy on the biosimilar side of the fence.

This article was written by our Director of Content, Stanton Mehr. Stan is has been writing commentary and reporting news about the biosimilar industry since the submission of the first biosimilar 351(k) application to the FDA 13 years ago. Since that time, BR&R has been tracking the US biosimilar marketplace, with the industry’s original, comprehensive and updated database of biosimilar filings with the FDA.

TrumpRx unveiled the first 43 products listed as available through this direct-to-consumer (DTC) clearinghouse site, and one biosimilar is offered, at a discount of more than $300 per dose.

Pfizer’s Abrilada is being offered through TrumpRx at a price of $207.60 per 40 mg/0.8 mL prefilled pen. The prefilled syringe version is $415.20 (for a 2 pack). This represents a 60% discount off its present low-WAC price of $519, and is 46% below the lowest recorded low-WAC price of any of the adalimumab biosimilars available (Idacio), as reported by the Samsung Bioepis Biosimilar Market Report.

Pfizer’s Abrilada is only available in one low-concentration adalimumab formula, whereas the majority of the competitive biosimilars have the widely used high-concentration formulation. Furthermore, the TrumpRx site only lists one dosage of its prefilled syringe and pen, whereas the drug is available in other doses via the prefilled syringe. Abrilada does utilize the preferred citrate-free formula.

Based on IQVIA data utilized by Samsung Bioepis, Pfizer’s share of the adalimumab market is less than 2%, and thus the company may believe that it had little to lose with this DTC pricing. Cash-paying patients will comprise a very narrow share of adalimumab purchases.

With the Federal Trade Commission (FTC) settlement with Express Scripts, reported this week, the FTC ordered the PBM to make TrumpRx accessible to insured patients as well. Since insured patients (outside of an initial deductible) will generally pay considerably less than $200 per dose out-of-pocket, and to this date a cash DTC transaction does not contribute to the patient’s deductible, this will likely remain an access point for uninsured patients who can afford the DTC price.

TrumpRx will likely add other biosimilars or biologics to its list of available products in the future. However, until the mechanism is worked out to include these DTC transactions into the plan’s or PBM’s electronic systems, this access channel will remain limited for biologic agents.

This article was written by our Director of Content, Stanton Mehr. Stan is has been writing commentary and reporting news about the biosimilar industry since the submission of the first biosimilar 351(k) application to the FDA 13 years ago. Since that time, BR&R has been tracking the US biosimilar marketplace, with the industry’s original, comprehensive and updated database of biosimilar filings with the FDA.

Perhaps the greatest effect of yesterday’s announced Federal Trade Commission (FTC) settlement with Express Scripts is its mandate on consumer exposure to net prices at the pharmacy counter as opposed to the inflated list prices of insulin products. But the implications go far beyond insulin. The settlement may contribute to the demise of high wholesale acquisition cost (WAC) pricing.

The FTC stated that Express Scripts would, as part of the agreement, now list preferred drugs under their low-WAC, not high-WAC, prices on standard formularies. In addition, Express Scripts will interface with the federal government’s TrumpRx site to allow the PBM’s members access to direct-to-consumer pricing platforms within its standard pharmacy benefit design.

Affecting Insulin and Beyond

All Big 3 PBMs were sued by the FTC over alleged insulin price fixing. To date, only Express Scripts has reached an agreement with the FTC. The settlement reached by the FTC may cause much consternation and uncertainty with big 3 leadership and investors, but it is unquestionably a step in the right direction.

When patients’ out-of-pocket costs are based on net pricing (that is, after rebates and discounts), their costs at the point of dispensing may decrease. This will not be the case for patients who are members of plans using fixed copayments for insulin and other products. But as Drug Channel Institute’s Adam Fein says, “The settlement helps shield patients from excesses of the gross-to-net bubble.”

“This settlement enables us to keep moving forward, and we appreciate the administration’s reinforcement of our commitment to pharmacy benefits that put Americans first,” Express Scripts said in the statement. “This is a meaningful step toward affordability for millions of families, and toward advancing the goal we share with the Administration of full transparency into prescription drug costs.”

Insulin is just the catalyst in this chain reaction. According to the latest Samsung Bioepis Biosimilar Market Report, the low WAC price of insulin glargine hovers around $18 for a single prefilled pen. On a per-patient basis, insulin is one of the least expensive biologics (at least facing biosimilar competition). Many more, higher-cost agents covered under the pharmacy benefit should follow suit.

The FTC has been called on for years to take a greater role in countering anticompetitive marketplace activities around biosimilars, including the use of patent thickets to block biosimilar competition and the use of misleading marketing information.

TrumpRx is a hot topic today, especially in the context of its foundational concept: direct-to-consumer (DTC) or direct-to-patient (DTP) drug purchase and dispensing. Apparently set to launch, after the Department of Health and Human Services (HHS) issued a guidance that Secretary Robert F. Kennedy, Jr, said,  “makes clear that manufacturers can offer lower-cost drugs directly to patients without kickbacks or taxpayer billing.” The site may be ready to launch as early as Friday, January 30.

There remains a good amount of confusion how, if at all, TrumpRx fits into this DTC scheme, and to what extent the very small DTC market may affect the far larger market of commercially covered pharmacy benefits. Organizations like Mark Cuban’s Cost Plus, GoodRx, Lilly Direct, and BlinkRx already exist as pharmacies where the available products, under low DTC pricing, can be purchased by patients and shipped directly to them.

TrumpRx: So What?

On its face, TrumpRx is simply a portal that would allow a search for specific drugs and then link to these DTC vendors. From the perspective of a patient, it is a gateway to vendors offering drugs that have been heavily discounted for direct purchase—no rebates, no deductibles, no counting towards deductibles, no copays. Just a straight monetary transaction at a discounted purchase price. TrumpRx does not facilitate the sale, it does not supply the discounted drugs, and it does not accept money for the purchase. It is supposed to be accessible to pretty much anyone—the uninsured, underinsured, Medicare eligibles, and Medicaid eligibles.

With any DTC purchase, none of the transactions are registered by pharmacy benefit managers or health plans: Other than the prescription made by a health care provider, no other information enters the electronic medical record or a payer’s administrative database/billing system. From the health plan, insurer, and PBM perspective, there’s not too much to love about DTC purchases.

TrumpRx makes deals with drug manufacturers to offer their products (not all, just specific ones) at a most favored nation (MFN) price to patients. If I understand the process correctly, the drugs will then be offered by the DTC pharmacies at the negotiated MFN discount. In the early infancy of the DTC movement, individual manufacturers negotiated directly with companies like Cost Plus, and the discounts could be far lower than the expected MFN price.

What Do TrumpRx Deals Actually Entail?

A completed negotiation with the White House would allow the manufacturer’s drugs to be listed on the TrumpRx site, and be exempt from tariffs. It is not clear whether we’re talking about tariff exemptions for only those specific drugs or for the entire manufacturer’s portfolio. Considering the inconsistency of pharmaceutical tariff threats by the administration, this could be a nightmare to track and administer (in either case).

It is also unclear whether a deal with TrumpRx will exempt a single drug or all the manufacturer’s drugs from participation in the Medicare GLOBE and GUARD models, which would apply to a much larger segment of the population.

According to a recent webinar by the Academy of Managed Care Pharmacy’s legislative and regulatory team of Adam Colburn and Tom Casey, the “new DTC prices may serve as benchmarks for negotiations between payers and manufacturers.” Read that quote again. They are saying that this could knock down drug pricing for the vast commercial market, not just for the market-share sliver of cash-paying customers.

Biosimilar Considerations in This Long View

I’m not ready to go that far, not yet, anyway. Think about the implications of this possibiliity though. It would be great news for payers and terrible news for the drug industry. Also, it would be a big fat negative for the biosimilar industry: This will lower potential revenue targets for biosimilar candidates (in the same way as the Inflation Reduction Act’s Medicare Maximum Fair Price initiative), making them less attractive for biosimilar development.

Remember that the sole reason for the existence of biosimilar competition (and the industry itself) is to lower pricing substantially for high-cost biologics at the end of their market exclusivity. If something like MFN pricing (based on today’s WAC prices) is used as a starting point for commercial, Medicare, and Medicaid drug pricing negotiation, it could immediately lop off half to two thirds of the price of a biologic drug. Suddenly, biosimilar competition becomes less urgent, doesn’t it?

In Other Biosimilar News

On January 27, The Centers for Medicare and Medicaid Services announced the list of the drugs subject to the third round of MFP negotiations (this year for implementation on January 1, 2028). The set of 15 drugs predicted by Cousin and co-workers, which we reported on earlier this month was nearly spot on. Several biologics that are potential biosimilar candidates were on the list, and only Simponi (golimumab) didn’t make the final cut. This leaves Cimzia, Orencia, Entyvio, Cosentyx, Xolair, and Botox as eligible biologics this year.

This article was written by our Director of Content, Stanton Mehr. Stan is has been writing commentary and reporting news about the biosimilar industry since the submission of the first biosimilar 351(k) application to the FDA 12 years ago. Since that time, BR&R has been tracking the US biosimilar marketplace, with the industry’s original, comprehensive and updated database of biosimilar filings with the FDA.