Local Pharmacies Under Attack: How Federal Overreach Empowers PBMs to Destroy Rural Healthcare

Across America, small-town pharmacies are shuttering their doors, leaving communities stranded without access to life-saving medications. The culprit isn't just rising costs or changing habits; it's a system rigged by Pharmacy Benefit Managers, or PBMs, who act as middlemen in the drug supply chain. These corporate giants, like CVS Caremark and Express Scripts, control nearly 80% of prescriptions, dictating prices and squeezing out competition. Their unchecked power is choking rural neighborhoods and urban hubs alike, turning pharmacies into relics of a freer market.

This isn't abstract policy talk; it's personal. When your local pharmacist, the one who knows your name and your kids' allergies, locks up for good, that's not progress. It's a loss of trust, care, and choice. Yet, a bipartisan group of state attorneys general, including California's Rob Bonta, has sounded the alarm, demanding Congress ban PBMs from owning pharmacies. Their letter lays bare a truth: PBMs prioritize profits over patients, and it's time to fight back.

PBMs started in the 1960s with a simple job: process claims and negotiate discounts. Fast-forward to today, and they've morphed into market-dominating titans. The big three—CVS Caremark, OptumRx, and Express Scripts—handle 80% of America's prescriptions and rake in 70% of specialty drug revenue. Through mergers and acquisitions, they've gobbled up competitors and pharmacies, creating empires where they control the entire chain, from insurance to your corner drugstore. This isn't competition; it's a monopoly dressed up as efficiency.

Their tactics are ruthless. PBMs use 'spread pricing,' charging insurers more than they pay pharmacies, pocketing the difference. They steer patients to their own pharmacies, undercutting independents with unfair contracts. Data backs this up: from 2010 to 2021, 39% of independent pharmacies closed, compared to 22% of chains. In rural areas, 10% of pharmacies vanished in the last decade alone, creating 'pharmacy deserts' where folks drive hours for a prescription. The Federal Trade Commission pegs PBMs' excess profits on generics at $7.3 billion from 2017 to 2022. That's not savings; it's theft from American wallets.

The ripple effects hit hardest where choice is already scarce. In Alabama, dozens of pharmacies have closed in recent years; in Kansas, over 100 independents staged temporary shutdowns in 2025 to protest PBM practices. These aren't just businesses failing; they're lifelines cut off. Rural families, seniors, and low-income households bear the brunt, forced to navigate higher costs or long trips for meds. In urban Black and Latino neighborhoods, closures are even steeper, deepening health disparities. When 30% of Americans say they can't afford prescriptions, and 20% skip doses to save cash, the system is broken.

PBM defenders claim they lower costs with rebates and generics. Nice try, but the evidence doesn't lie. Rebates often stay in PBM pockets, not yours, and their formularies favor pricier drugs with bigger kickbacks. They argue independents get fair reimbursement, yet pharmacists report rates below dispensing costs, bleeding them dry. The American Medical Association notes 72% of insured Americans are tied to PBM-affiliated insurers, leaving patients with little say. This isn't freedom; it's control.

The attorneys general aren't alone in their fight. Bipartisan bills like the PBM Transparency Act and the Lower Costs, More Transparency Act have gained traction, pushing to end spread pricing and force rebate pass-throughs. States like Alabama and Iowa are stepping up, passing laws to protect local pharmacies from PBM overreach. Even the Supreme Court backed Arkansas's right to regulate PBM rates, a win for local control. But federal action is the real prize. A law banning PBMs from owning pharmacies would shatter their stranglehold, letting competition breathe again.

Opponents warn reform could disrupt supply chains or raise costs. That argument falls flat when you see PBMs already jacking up prices and limiting access. The FTC's own probes expose their anticompetitive tricks, yet Congress hesitates. Why? Maybe it's the millions PBMs pour into lobbying. But Americans deserve better than a market tilted toward corporate greed. A free economy thrives on choice, not consolidation.

This fight is about more than pharmacies; it's about fairness. Every closed storefront, every patient rationing pills, is a failure of a system meant to serve people, not profiteers. The attorneys general have drawn a line: PBMs can't keep rigging the game. Their call for a federal ban on PBM-owned pharmacies isn't radical; it's a return to principles that built this nation—competition, community, and accountability.

Congress needs to act, and fast. Americans aren't asking for handouts; they want a market that works. Strip PBMs of their pharmacy empires, and you'll see prices stabilize, access expand, and local pharmacies thrive again. The choice is clear: side with families and small businesses, or let corporate middlemen keep calling the shots. Let's bet on freedom and give communities their pharmacies back.