PUTT Blog | The Spreadsheet Killing Pharmacy Reform

How the CBO Became PBMs’ Sidekick

If you think the biggest obstacle to fixing PBMs is their billion-dollar lobby, bless your heart, because you’re only half right. The other half? A government spreadsheet in D.C. quietly strangling real reform before it ever has a chance.

Meet the Congressional Budget Office (CBO). The unelected, unaccountable scorekeeper that can take a bipartisan, common-sense bill and file it under “too expensive” with the click of a keystroke. Officially, their estimates are “advisory.” Unofficially, if CBO says a bill adds to the deficit (even by lunch money) Congress drops it like a bad habit.

Rebate Theater

The CBO scoring process is like an illusion show — and the headliners are PBMs and a gullible scribe. The big magic trick? The CBO’s models treat PBM rebates as holy scripture. In Medicare Part D, insurers use those manufacturer kickbacks to lower premiums — while patients keep paying coinsurance on the jacked-up list price.

It’s what we in the trenches call Rebate Theater. PBMs negotiate “discounts,” manufacturers inflate list prices to play along, and the rebate savings? Oh, they magically disappear into corporate pockets. Employers don’t know how much they’re really saving, local pharmacies sure aren’t seeing a dime, and patients still get crushed at the counter.

Yet somehow, CBO looks at that game of smoke and mirrors and calls it a cost-saving miracle. It’s like bragging about a 50% off coupon… for a pizza that used to cost a tenth of the price.

Mathematical Illusions

The math is rigged. The CBO’s scoring process isn’t just flawed, it’s a black box stuffed with industry talking points. Through their opaque modeling lawmakers can’t see the equations, the data, or the assumptions that drive the final number. PBMs, insurers, and manufacturers hand over “data” that paints them as saviors — and the CBO swallows it whole.

It’s the “discount illusion” that blocks meaningful policy. If it wipes out rebates but lowers what patients actually pay, the spreadsheet only sees “lost” revenue, not the real-world relief. Out-of-pocket costs? Household budgets? The CBO doesn’t count them. If Grandma saves $100 a month on insulin but the rebate machine slows down, the CBO score shows a “loss.”

And let’s not forget the $177 Billion Fairy Tale of 2019. The Trump administration proposed killing the anti-kickback safe harbor that shields PBM rebates in Medicare and Medicaid. It would’ve funneled savings straight to patients at the counter.

Here comes the CBO again: “That’ll be $177 billion, no thanks.”

The proposal died on impact. Never mind that state audits like Ohio exposing $208 million in PBM spread pricing, and West Virginia saving $54 million by cutting PBMs loose proved the math was nonsense. The spreadsheet said “too expensive,” and that was that.

Fast forward to 2025: new bipartisan reform bills, same tired playbook. And guess what PBM lobbyists will be waving around like a hall pass? Yep, another CBO score warning of “higher costs.”

Curtain Call

Let’s get back to the real world here. While the CBO keeps humming along in its fluorescent-lit bubble, independent pharmacies are drowning in underwater reimbursements, patients are waiting days for critical meds thanks to mail-order mandates, and PBMs, now vertically integrated with the very insurers they “negotiate” against, are pocketing billions.

The FTC has receipts: PBMs steering patients to their own mail-order pharmacies, marking up prices, and distorting access in ways that squeeze Main Street pharmacies to the breaking point. And what does the spreadsheet in D.C. do? Pretend the market is healthy and competitive.

Once again, you don’t have to be a nuclear physicist to figure this out. If Congress wants to fix PBMs, it has to start by cleaning up the data that drives the CBO’s math.

Here at PUTT, we’re always hearing “bring solutions with your problems”. Ask and ye shall receive:

• Audit the models. Shine a light on every assumption, from rebate-retention rates, to list-price behavior.

• Bring in independent data. Use real numbers from state audits and pharmacy claim data — not just industry-fed fiction.

• Score patient impact, not just budgets. Pair the federal cost estimate with a patient-level analysis that shows out-of-pocket impacts.

• Call out rebate illusions. Stop letting fake “discounts” drive the conversation.

• Factor in reality. The FTC has laid out the evidence of market manipulation. Build that into the models instead of assuming unicorn-level competition.

Reform isn’t dying because Congress doesn’t want it. Reform is dying because an outdated spreadsheet built on flawed assumptions and fed by the very corporations we’re trying to reform, keeps labeling patient-focused bills as “too expensive.”

Independent pharmacies are collapsing, patients are paying more than ever, and PBMs are laughing all the way to the bank.

It’s time to stop treating the CBO’s black box like gospel. Shine the light. Audit the math. And stop letting an unelected spreadsheet conductor protect a billion-dollar racket.

Brandi Chane, PUTT Board Member