Your insurer, your pharmacy benefits manager, and your pharmacy might all be owned by the same company.
And they're using that power to overcharge you.
Three companies---CVS Caremark, Express Scripts, and OptumRx---administered nearly 80% of the roughly 6.6 billion prescriptions filled in the United States in 2023. The six largest processed more than 90%. (Source: Federal Trade Commission, July 2024)
You did not choose them. You cannot fire them. Here are four schemes they use to extract money from patients---and what you can actually do at the counter.
1. Prior Authorization Games
Prior authorization sounds reasonable. Your doctor needs approval before prescribing certain drugs, which is supposed to stop script-happy prescribing.
In practice, it is also a steering tool. When the same company owns your insurer, your PBM, and your pharmacy, it can design approval requirements that push you toward the drug that earns it the most---which may be an expensive brand-name product with a fat rebate, not a cheaper generic.
The most telling number here is not the denial rate. It's the reversal rate. In Medicare Advantage, where insurers must report the data, plans denied 4.1 million prior authorization requests in 2024---7.7% of all determinations. Just 11.5% of those denials were appealed. More than 80% of appeals were partially or fully overturned. (Source: KFF, 2025)
That figure covers medical services rather than Part D drugs, and plans aren't required to publish comparable drug-denial numbers. (Source: KFF, 2025) But the shape is the same: the denial is a filter, and most people who push back win.
Fight back: Appeal. Ask your prescriber to request an expedited review if a delay could harm you.
2. Formulary Manipulation
The formulary is the list of drugs your insurance covers, and the PBM writes it.
The FTC found that PBMs and brand-name manufacturers sometimes strike agreements to exclude lower-cost competitor drugs from the formulary entirely, in exchange for larger rebates. (Source: Federal Trade Commission, July 2024)
Read that again. A cheaper version of your drug can be kept off your plan specifically because it's cheaper.
Insulin is the case study. In September 2024, the FTC sued all three major PBMs and their group purchasing organizations, alleging they built a "perverse drug rebate system" that systematically favored high-list-price, heavily rebated insulin over lower-priced equivalents. The list price of Humalog went from $21 in 1999 to more than $274 in 2017. (Source: Federal Trade Commission, September 2024)
The rebate is the whole point, and here's why it never helps you: rebates are paid backward, to the plan and the PBM, after the sale. Your coinsurance is calculated on the inflated list price. The FTC found that patients with deductibles and coinsurance "often must pay the unrebated higher list price," and that some pay more out of pocket than the drug's entire net cost to their insurer. (Source: Federal Trade Commission, September 2024)
You are paying the sticker price on a car the dealership already got a discount on.
3. Spread Pricing
Spread pricing is simple: the PBM bills your health plan one price, pays the pharmacy less, and keeps the difference.
Ohio put a number on it. A state audit covering April 2017 through March 2018 found PBMs kept $224.8 million in spread from Ohio's Medicaid managed care plans in a single year. On generic drugs, the spread was 31.4%---PBMs collected $208 million on $662.7 million in generic spending. (Source: Ohio Auditor of State, 2018)
Ohio's Medicaid department abandoned the spread-pricing model the day after reviewing a draft of that audit. (Source: Ohio Auditor of State, 2018)
The practice did not end with Ohio. The FTC estimated the Big Three earned roughly $1.4 billion from spread pricing on specialty generic drugs alone between 2017 and 2022. (Source: Federal Trade Commission, January 2025)
4. The Pharmacy They Happen to Own
Many plans require you to fill maintenance or specialty medications through the PBM's own mail-order pharmacy. Use your neighborhood pharmacy instead and you pay more, or it isn't covered at all.
This is not about convenience. It's about routing volume into a business the PBM owns, where it sets both the price it charges and the price it pays itself.
The FTC's second interim report quantified the result: the Big Three and their affiliated pharmacies generated more than $7.3 billion in revenue above their estimated acquisition costs on specialty generic drugs from 2017 through 2022. Markups ran into the hundreds of percent routinely; the underlying staff report documented markups reaching 7,736% on certain pulmonary hypertension drugs in 2022. Oncology, MS, transplant, HIV, and pulmonary hypertension drugs accounted for more than 94% of that $7.3 billion. (Source: Federal Trade Commission, January 2025)
An earlier FTC finding is even more compact: nearly $1.6 billion in excess revenue on two cancer drugs, in under three years. (Source: Federal Trade Commission, July 2024)
The Clawback at the Counter
For years, the quietest scheme was the one you'd never notice: your copay could exceed what the drug actually cost your insurer, with the PBM "clawing back" the difference from the pharmacy.
USC Schaeffer Center researchers analyzed 9.5 million commercial claims from the first half of 2013 and found overpayments on 23% of them---28% of generic prescriptions. Total overpayments came to roughly $135 million in that sample. (Source: USC Schaeffer Center, 2018)
And until 2018, your pharmacist was contractually forbidden from telling you.
Congress banned those gag clauses on October 10, 2018. The Patient Right to Know Drug Prices Act bars health plans and their PBMs from restricting or penalizing a pharmacy for telling you the difference between your out-of-pocket cost and the cash price. (Source: Public Law 115-263, govinfo.gov) A companion law, the Know the Lowest Price Act of 2018, applied the same rule to Medicare Part D and MA-PD plans starting with plan years on or after January 1, 2020. (Source: Public Law 115-262, govinfo.gov)
Your pharmacist is allowed to answer. Most patients still never ask.
What You Can Actually Do
Ask for the cash price every single time. A 2026 study of more than 62 million commercial claims from 2024 found that once a generic's copay exceeded $15, Mark Cuban Cost Plus Drugs would have been cheaper nearly 80% of the time. Above $100 out of pocket, patients paid about $140 through insurance versus roughly $25 in cash---about an 82% reduction. (Source: Penn LDI summary of Annals of Internal Medicine study, May 2026)
Compare before you fill. Check Mark Cuban Cost Plus Drugs, a discount card like GoodRx, and your local independent pharmacy. One caveat: a cash purchase runs outside your insurance, so ask your plan whether it counts toward your deductible before you skip the claim on an expensive drug.
Request a formulary exception, not just an appeal. If your plan won't cover the drug your doctor wants, you can ask for a coverage determination. Your prescriber must supply a supporting statement explaining the medical reason. Medicare plans generally have 72 hours to decide a standard request and 24 hours for an expedited one---but the clock doesn't start until they receive your prescriber's statement, so make sure it's sent. (Source: CMS)
Appeal a denial. In Part D, the first level is a redetermination by your plan, and you have 65 days from the date on the denial notice to file. If the plan says no again, an Independent Review Entity---not your insurer---takes the next look. (Source: Medicare.gov) Commercial and marketplace plans have their own internal appeal and independent external review process. Know your rights before you start.
Ask for a network exception on mail-order mandates. If the required pharmacy is genuinely inconvenient or can't safely ship your medication, put the request in writing and keep a copy.
Report it. File with your state insurance department and your state board of pharmacy, which licenses PBMs in many states. If your coverage comes through an employer, the U.S. Department of Labor's Employee Benefits Security Administration takes complaints. Report deceptive practices to the FTC at reportfraud.ftc.gov.
Use the free help. The Patient Advocate Foundation provides no-cost case management and copay assistance, and NeedyMeds maintains a free database of patient assistance programs. If you're on Medicare, the Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs into monthly payments instead of paying at the counter. (Source: Medicare.gov) For 2026, Part D out-of-pocket spending is capped at $2,100 for the year. (Source: KFF, 2026)
What's Actually Changing
Something rare happened: the enforcers won.
The FTC's September 2024 insulin case has produced two settlements. On February 4, 2026, Express Scripts agreed under a proposed consent order to stop preferring high-list-price versions of drugs over identical low-list-price versions on its standard formularies, to delink manufacturer compensation from list prices, and to offer plan sponsors a design where members' out-of-pocket costs are based on a drug's net cost rather than its inflated list price. The FTC estimated up to $7 billion in patient savings over 10 years. (Source: Federal Trade Commission, February 2026)
In July 2026, Caremark agreed to a proposed consent order on similar terms: rebates passed through at the point of sale, a cap on members' insulin out-of-pocket costs, delinked manufacturer fees, and a standard offering that lets plan sponsors get off spread pricing entirely. The FTC put the value at up to $8.5 billion locked in over 10 years, plus up to $4.5 billion more from point-of-sale rebates. The case against OptumRx has been withdrawn from adjudication while the agency considers a proposed consent agreement. (Source: Federal Trade Commission, July 2026)
Congress moved too, partially. PBM reforms in the Consolidated Appropriations Act, 2026, signed February 3, 2026, delink PBM compensation from drug prices in Medicare Part D, require 100% rebate pass-through, and impose new transparency reporting---but the Part D changes don't take effect until January 1, 2028, and a proposed Medicaid spread-pricing ban was dropped from the final bill. (Source: KFF, February 2026)
States have been far more aggressive. All 50 have enacted at least one PBM law since 2016---more than 220 laws in total. (Source: NASHP) In April 2025, Arkansas became the first state to ban PBMs from owning pharmacies outright. The PBMs sued, and in July 2025 a federal judge blocked the law before it took effect, finding it likely violated the Commerce Clause. (Source: Healthcare Dive, 2025)
The Takeaway
None of these reforms refunds what you paid last month, and the biggest federal fix doesn't start until 2028.
So the leverage that's actually yours today is small, unglamorous, and immediate. Ask the cash price. Compare before you fill. Appeal the denial---most people who bother, win. Request the exception in writing. Report the plan that stonewalls you.
The system was built assuming you wouldn't. Then demand your legislators break up these healthcare monopolies.