PUTT Blog | Time For a 20th Century Law Revival

Let’s cut the nonsense: pharmacy benefit managers (PBMs) aren’t just shady middlemen—they’re operating a masterclass in anti-competitive behavior. And while regulators have spent the last two decades hand-wringing and hand-waving, the law books are already packed with tools to rein them in. Say hello to the Robinson-Patman Act and RICO — two pieces of legal muscle PBMs hope you’ll never look too closely at.

Robinson-Patman: Price Discrimination 101

You don’t need a JD to see what’s going on here. The Robinson-Patman Act was passed in 1936 to stop Goliaths from crushing Davids by giving sweetheart deals to themselves and their best buddies while icing out small businesses. And what are PBMs doing today?

Let’s examine the evidence:

Exhibit A: Reimbursing their own pharmacies at higher rates than what they pay independents for the exact same drug, dispensed to the exact same patient, under the exact same plan.

Exhibit B: Cutting rebate deals with drug manufacturers that are only applied when the medication flows through PBM-affiliated pharmacies.

Exhibit C: Want to be a “preferred network provider," no problem. As long as you agree to be reimbursed less for the privilege of participating - i.e. you’ll have to fork over some of your meager profit to join the club, but nah, we’ll probably just exclude you even if you meet every contract term, because you’re not owned by our PBM’s parent company.

Sound familiar? That’s textbook price discrimination. And the FTC’s recent Robinson-Patman revival against liquor distributors proves they know how to use it when they want to.

So, the question isn’t whether PBMs are violating Robinson-Patman. It’s why nobody has bothered to enforce it in healthcare.

Not Just for the Sopranos Anymore

Now let’s talk RICO. The Racketeer Influenced and Corrupt Organizations Act of 1970 was born to bust up mob empires. But guess what? Coordinated, monopolistic rackets aren’t just a thing of the past. PBMs might not show up to meetings in pinstripes and pinky rings, but their business model is giving off serious organized crime energy.

Let’s break it down:

Consideration 1: Pattern of racketeering activity? Check. Spread pricing, rebate manipulation, gag clauses, and threats of network exclusion aren’t one-offs—they’re standard operating procedure.

Consideration 2: Fraud and coercion? Absolutely. PBMs negotiate deals in the dark, lie about "cost savings" to employers while pocketing the difference, and strong-arm pharmacies with take-it-or-leave-it contracts that no honest actor would sign.

Consideration 3: Enterprise control? 100%. PBMs own or are owned by insurers, who then require patients to use PBM-affiliated pharmacies, who then benefit from insider pricing. It’s a closed loop with all the trimmings of vertical monopoly.

Put it all together and what do you get? A coordinated scheme to control the drug market, eliminate competition, and extract money from every transaction along the way. That’s racketeering with a capital R.

So What’s the Hold-Up?

Lawmakers love to hold hearings. Great. Hold one where you ask PBM execs why they reimburse their own pharmacies more than their competitors. Ask them why a patient can't fill their specialty medication at the pharmacy they prefer and trust. Then ask them if every pharmacist has the training for and can understand how medications should be dispensed.  Ask them why rebates vanish into thin air instead of lowering costs, and why premiums go up every year.  Ask them if they’re willing to put their money where their mouth is and drop the rebate game.  Ask them if a patient’s coinsurance is higher on an expensive branded drug vs a cheap generic… You know, on second thought, just contact us and we’ll write the questions out for you.

And when they try to squirm out of those questions with buzzwords like "efficiency," just smile and say: "Robinson-Patman and RICO. Ever heard of them?"

The Bottom Line

The tools are there. The violations are visible. The harm is measurable.

So let’s stop pretending PBMs are just misunderstood players in a complicated system. They’re strategic monopolists, and it’s high time we called them what they are: illegal under laws that have been sitting on the shelf collecting dust.

Dust those laws off. Enforce them. And remind the billion-dollar bullies: if you play dirty, there are laws for that.

Because this isn’t just shady business. It’s Robinson-Patman and RICO.

Brandi Chane

PUTT Board of Directors

Brandi is a Texas independent pharmacy owner and Board Member of Pharmacists United for Truth & Transparency