LANSING — Michigan Attorney General Dana Nessel joined a coalition of 39 state and territory attorneys general in sending a letter to congressional leadership urging them to pass an act that would prohibit pharmacy benefit managers (PBMs) from owning or operating pharmacies.  

“By owning pharmacies, pharmacy benefit managers have manipulated the system to prioritize profits, forcing patients to pay higher prices and subjecting small, independent pharmacies to unfair and arbitrary conditions,” Nessel said. “I am proud to stand with my colleagues in calling on Congress to prohibit this exploitative process.” 

PBMs are third-party administrators of prescription drug programs for health plans. Over the past few decades, horizontal consolidation and vertical integration have transformed PBMs from useful administrative service providers into major industry players with considerable market influence. Each of the top six PBMs operate their own affiliated pharmacies, while five of the top six are also a part of parent conglomerates that operate insurance companies and health care clinics. PBMs—through ownership of affiliated pharmacies— contract with and, because of their size, have power over their own pharmacies’ competition. The PBMs then use their place as middlemen to exert this power in ways that harm unaffiliated pharmacies, forcing these small businesses to accept contractual terms that are confusing, unfair, arbitrary, and harmful. 

The letter sent urges Congress to take action and protect consumers by enacting a law prohibiting PBMs or their parent companies from owning a pharmacy. 

Joining Attorney General Nessel in sending this letter (PDF) are the attorneys general of Alaska, American Samoa, Arizona, Arkansas, California, Delaware, the District of Columbia, Hawai'i, Illinois, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virgin Islands, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.