How California’s Crackdown on PBMs Could Raise, Not Lower, Drug Costs

For years, Prescription Benefit Managers

(PBMs) have been at the center of the debate on rising drug prices in the United States. These middlemen—who negotiate drug prices, manage pharmacy networks, and determine which medicines health plans will cover—are often blamed for lack of transparency and unfair pricing practices. In response to public pressure, California has begun tightening regulations on PBMs, aiming to make drug pricing more transparent and fair. Although well-intentioned, experts warn that these crackdowns could unintentionally increase—not decrease—drug costs for consumers. California’s efforts to rein in PBMs stem from a genuine desire to protect consumers from skyrocketing drug costs. However, without addressing the entire pharmaceutical pricing ecosystem, these reforms could unintentionally: Reduce PBM negotiating power Raise insurance premiums Increase pharmacy costs Limit patient access And ultimately push drug prices higher, not lower A balanced approach—one that targets manufacturers, insurers, PBMs, and regulatory inefficiencies together—is the only path to true affordability.