The truth about pharmacy benefit managers and the cost to Kansans | Opinion

Pharmacy benefit managers or PBMs revolutionized work at pharmacies in the 1980s, when what were then known as “switchers” served as the middleman to provide real-time insurance verification and customer responsibility. However, they have evolved significantly since then and today PBMs play a powerful role in determining what patients pay for prescriptions. Yet in Kansas, their practices are nearly unregulated and cost taxpayers and health plans more.

We’ve all seen our prescription costs go up, and PBMs’ profits tell the story of why. According to reports shared with the Congressional Budget Office, the three biggest PBMs recorded $27.6 billion in profit in 2022 compared to $6.3 billion in 2012. That is a 438% increase. They also control 80% of the prescription drug market.

It’s time we call this what it is: a monopoly (or an oligopoly, if you want to get technical).

When you pick up a prescription at the pharmacy, what you pay is based on the ingredient and dispensing costs as determined by a PBM. Your health insurance plan pays a portion, and you pay either a co-pay, coinsurance or a deductible. But the truth is that PBMs often pay the corporate pharmacies they own more for both ingredients and dispensing than they pay mom-and-pop pharmacies. At the same time, PBMs are keeping rebates from drug manufacturers that would lower your costs. To top it off, PBMs often bill your insurance far more than what they pay the pharmacy.

I know what you’re thinking: That should be illegal. Well, the Kansas Legislature has an opportunity to make it illegal with Senate Bill 360, the Kansas Consumer Prescription Protection and Accountability Act. This legislation would require all rebates from drug manufacturers to be passed on to health plans.

This is a no-brainer when it comes to helping reduce out-of-pocket costs and lower insurance premiums. It would eliminate a practice called “spread pricing,” where a PBM charges a health plan more than it reimbursed a pharmacy. The law would shine a light on the hidden costs consumers are forced to pay for life-saving medication.

It would also ensure that all pharmacies get the same reimbursement for ingredients and dispensing costs. It would put an end to PBMs’ practices of driving local pharmacies out of business and forcing patients to use mail-order pharmacies. Last time I checked, a delivery driver can’t counsel you on your prescription, and doesn’t know about possible drug interactions.

In Kansas, we have the choice to put patients over the politics and profits driving these predatory practices — as 35 other states have done. Or we can continue to let pharmacy benefit managers threaten the pocketbooks of Kansans, the livelihood of local businesses and the viability of rural communities.

As a pharmacist and your state insurance commissioner, I choose to stand with Kansans. I applaud the 32 state senators who voted for S.B. 360, which would bring critical, commonsense reforms to restore fair competition to the market. I encourage the members of the Kansas House to finish the job.

Vicki Schmidt has served as Kansas Insurance Commissioner since being elected in 2018.

This story was originally published March 11, 2026 at 5:03 AM.