Pharmacy Benefit Managers (PBMs) play a powerful—and often opaque—role in the prescription drug supply chain. Acting as intermediaries between manufacturers, insurers, and pharmacies, PBMs negotiate rebates and determine drug placement on formularies, decisions that can significantly affect patient costs.

Investigations by states and federal agencies have increasingly focused on PBM practices that may contribute to inflated drug prices. Allegations include spread pricing—where PBMs charge insurers more than they reimburse pharmacies—rebate arrangements that incentivize higher list prices, and anticompetitive conduct that limits patient access to affordable alternatives.

Legal actions and regulatory scrutiny have accelerated in recent years, including antitrust claims, consumer protection investigations, and ongoing examinations by the Federal Trade Commission. In response, states are exploring reforms such as transparency mandates, pass-through rebate models, and flat-fee PBM compensation structures.

For Attorneys General, PBM litigation represents a critical intersection of healthcare oversight, consumer protection, and competition policy—one that continues to evolve as courts and regulators assess the scope of state authority in this space.