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PUTT Statement | DOJ Anticompetitive Regulations Taskforce Public Comment

May 27, 2025


Anticompetitive Regulations Task Force 

United States Department of Justice 

950 Pennsylvania Avenue NW 

Washington, DC 20530


Re: Anticompetitive Practices by Vertically Integrated Health Insurers and Pharmacy Benefit Managers


Dear Members of the Anticompetitive Regulations Task Force:


I am writing on behalf of the independent pharmacy members of Pharmacists United for Truth and Transparency (PUTT) to bring to your attention the urgent need for antitrust enforcement action against the anticompetitive business practices employed by the largest health insurers and their owned or affiliated pharmacy benefit managers (PBMs). These vertically integrated entities have created a stranglehold on the healthcare market that harms consumers, eliminates competition, and threatens the viability of independent healthcare providers, particularly independent pharmacies.


The U.S. healthcare market has become dangerously concentrated through a series of mergers and acquisitions that have created massive vertically integrated entities. The three largest PBMs—CVS Caremark (owned by CVS Health/Aetna), Express Scripts (owned by Cigna), and OptumRx (owned by UnitedHealth Group)—control approximately 80% of the prescription drug market. These same companies operate as health insurers, pharmacy chains, and healthcare service providers, creating unprecedented vertical integration that cloaks anticompetitive conduct under the pretense of “efficiency” and “economies of scale”. In reality, these siloed “single payer” systems have resulted in Americans having the most expensive, and arguably, least accessible healthcare in the world - all funded off the backs of taxpayers, employers and patients. 


Numerous independent studies, investigative journalism series, two Federal Trade Commission’s 6B studies and the Congressional Oversight Committee’s investigation have uncovered practices that have been found, through testimony and evidence, to raise overall prices for patients and inflate costs for private and taxpayer-funded health plans. These practices include:


1. Self-Dealing and Steering


CVS Caremark, Express Scripts and OptumRx systematically steer patients away from independent pharmacies toward their own retail pharmacy operations through:


  • Discriminatory reimbursement rates that favor their own pharmacies

  • Narrow pharmacy networks that exclude independent competitors

  • Mandatory mail-order requirements that direct business to their owned/affiliated pharmacies

  • Patient cost-sharing structures that incentivize use of PBM-owned pharmacies

  • Mandating so-called “specialty drugs” which are defined according to the PBM’s terms and are usually not specially formulated or require special handling but are simply more expensive, and therefore more profitable. 


PBMs self-refer specialty medications to their own pharmacies and can set the price and reimbursement according to terms favorable to their bottom line. In the absence of transparency, and without non-PBM pharmacies to fill these prescriptions, there is no accountability and every reason to price-gouge.


2. Predatory Pricing and Below-Cost Reimbursement


PBMs routinely reimburse independent pharmacies below the actual cost of medications, forcing these small businesses to operate at losses or exit the market. This practice allows PBMs to:


  • Eliminate independent competitors

  • Consolidate market share in their own retail operations

  • Reduce patient choice and access, particularly in rural and underserved areas


3. Unconscionable Contracting and Exclusionary Networks


The largest insurers and their PBMs use their market power to impose exclusionary contracts that:


  • Prevent patients from accessing independent pharmacies

  • Require exclusive dealing arrangements with their affiliated entities

  • Create artificial scarcity by limiting network participation

  • Force healthcare providers to accept below-market reimbursement rates


4. Spread Pricing and Lack of Transparency


PBMs engage in "spread pricing," charging health plans significantly more for medications than they reimburse pharmacies, and pocketing the difference. This practice:


  • Inflates healthcare costs for consumers and employers

  • Creates perverse incentives to maintain high drug prices

  • Lacks transparency, preventing market participants from making informed decisions


5. Vertical Foreclosure


By controlling multiple levels of the healthcare supply chain, these entities can foreclose competition by:


  • Refusing to deal with - or pay - independent providers

  • Imposing discriminatory terms on competitors

  • Using information from one business segment to disadvantage competitors in another


These anticompetitive practices result in significant harm to consumers:


  • Higher Costs: Reduced competition leads to higher prescription drug prices and insurance premiums

  • Reduced Access: Independent pharmacy closures limit patient access, particularly in rural communities

  • Diminished Quality: Consolidation reduces service quality and personalized care

  • Limited Choice: Patients lose the ability to choose their preferred pharmacy or healthcare provider


The impact of pharmacy closures on patient access cannot be understated. One study showed nearly 30% of U.S. pharmacies closed between 2018 and 2021 while another counted 326 pharmacy closures between December 2024 and March 2025. (Note studies were published before Rite Aid closures made national news last month). In nearly all cases communities of color and the economically disadvantaged are most likely to be affected by pharmacy closures.  


Independent pharmacies and small healthcare providers face an existential threat from these practices:


  • Thousands of independent pharmacies have closed due to unsustainable reimbursement rates

  • Rural communities lose essential healthcare services

  • Healthcare deserts expand as independent providers are forced out of business

  • Innovation and personalized care suffer as the market becomes increasingly homogenized


To survive, pharmacies have had to rely on strategies that detract from their primary raison d’etre - to provide patient care - including resorting to “cash only” pricing (i.e. no insurance accepted); generic dispensing only (i.e. no brand medications); reducing staffing to cut payroll expenses and owners not taking a paycheck or draw from their own business; relying on retirement and emergency savings to meet expenses; and time away from the pharmacy to advocate for better legislation that minimally stops the financial bleeding, if not outright eliminate the anticompetitive practices. 


These practices violate established antitrust principles in the Sherman Act and the Clayton Act. Vertically integrated entities' conduct constitutes:


  • Monopolization and attempted monopolization

  • Unlawful tying and bundling arrangements

  • Vertical restraints that harm competition

  • Predatory pricing designed to eliminate competitors


We respectfully urge the Task Force and the Department of Justice to:


  1. Initiate comprehensive antitrust investigations into the business practices of vertically integrated health insurers and PBMs

  2. Challenge anticompetitive mergers and consider structural remedies for existing vertical integration, including breaking up some or all of the entities acquired

  3. Pursue enforcement actions against discriminatory reimbursement practices and exclusionary conduct

  4. Mandate transparency in PBM pricing and contracting practices

  5. Protect independent healthcare providers through vigorous enforcement of antitrust laws


The healthcare market's current structure represents a clear and present danger to competition, consumer welfare, and the sustainability of independent healthcare providers. The time for action is now, before further consolidation makes effective remedies impossible. We urge the Task Force to prioritize this matter and take swift, decisive action to restore competition to this vital sector of our economy.


Thank you for your consideration of this critical matter. We welcome the opportunity to provide additional information or documentation to support your investigation into these practices.


Yours in Advocacy,


Monique Whitney

Executive Director



Referenced:

2 “Side Effects: An Ongoing Investigation on the Rising Costs of Prescription Drugs” The Columbus Dispatch, 2018. “The Middlemen” (series) The New York Times, 6/21/24-present. “How Drug Middlemen Keep  Beating the System” (series), The Wall Street Journal, 7/10/24-present

4  The Role of Pharmacy Benefit Managers in Prescription Drug Markets, House Oversight Committee, published 7/23/24

5  “More US Pharmacies Closed Than Opened … Communities Most at Risk”, J. Guadamuz et al, Health Affairs. December 2024



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