Congressman Krishnamoorthi Introduces Legislation to Rein in Pharmacy Benefit Managers, End Conflicts of Interest in Federal Pharmacy Benefits
WASHINGTON – Today, Congressman Raja Krishnamoorthi (D-IL) and Congresswoman Diana Harshbarger (R-TN) introduced the Fair Pharmacies for Federal Employees Act, legislation to protect federal employees and retirees from anti-competitive practices by pharmacy benefit managers (PBMs) and insurers. Under the bill, the Office of Personnel Management (OPM) is prohibited from contracting with entities in the Federal Employee Health Benefits Program (FEHBP) that both manage prescription drug benefits and own or control a pharmacy. The federal government administers and oversees the largest employer-based health care system in the country. By implementing comprehensive reform at the federal level, a proven model will be created that will lower health care costs across the board beyond the federal workforce and reach millions of Americans impacted by anti-competitive practices used by PBMs.
“Pharmacy benefit managers and insurers have used their market dominance to drive up costs for patients, monopolize the pharmacy market, and undercut their competition for far too long,” Congressman Krishnamoorthi said. “My bipartisan legislation will restore long overdue accountability, competition, fairness, and transparency to the health care system millions of federal workers and their families depend on.”
"Pharmacy benefit managers have always operated in the shadows, driving up drug costs, squeezing independent pharmacies, and prioritizing profits over patients,” Congresswoman Harshbarger said. “This bill is a critical step toward real accountability. By ensuring the Federal Employee Health Benefits program can no longer contract with insurers tied to PBMs or pharmacy operations, we are cutting out the conflicts of interest that have distorted our system for decades.”
Specifically, the Fair Pharmacies for Federal Employees Act:
Prohibits federal employee health plans from contracting with entities that own or control both PBMs and pharmacies.
Targets patient steering, anti-competitive reimbursement practices, and conflicts of interest within FEHBP.
Applies to all types of pharmacies, including mail-order, specialty, and retail.
Reinforces federal and state oversight without limiting enforcement tools.
A 2024 House Oversight Committee report found that PBMs drive up costs for patients. The Federal Trade Commission (FTC) also reported in 2024 that the three largest PBMs, Caremark RX, Express Scripts, and Optum Rx, marked up specialty generic drugs used to treat serious conditions like HIV and cancer by thousands of percent. PBM-controlled pharmacies now process over 80 percent of all prescriptions in the U.S., giving them the power to set prices, shut out local and independent pharmacies, and limit consumer choice. As a result of this unfair competition, more than 26,000 drugstores have closed nationwide over the past decade, including 2,000 in Illinois in 2024 alone, leading to 73 percent of Illinois counties being designated as pharmacy deserts.
During his time in Congress, Congressman Krishnamoorthi has advocated for reforms aimed at reining in the power of PBMs. As Ranking Member of the Health and Financial Services Oversight Subcommittee, Congressman Krishnamoorthi has introduced several pieces of bipartisan legislation aimed at reining in the power wielded by PBMs over patients and small, local, independent pharmacies, including the bipartisan PBM Reform Act with Congressman Earl “Buddy” Carter (R-GA) last week.
“Earlier this year we saw states begin fighting on the vertical integration of PBM-insurers with retail and mail-order pharmacies, a conflict that the federal government should strongly push back on as well,” Anne Cassity, Senior Vice President of Government Affairs at the National Community Pharmacists Association, said. “We are grateful to Reps. Krishnamoorthi and Harshbarger for introducing the Fair Pharmacies for Federal Employees Act, which attempts to tackle disturbing practices in federal health plans like patient steering and below or underwater reimbursements to PBM-insurers’ competitors. This bill and will go a long way in eliminating the conflicts of interest that currently exist to the detriment of patients, taxpayers, and pharmacies.”
“For far too long, common ownership between PBMs and pharmacies has created dangerous conflicts of interest that hurt patients, taxpayers, and independent, community pharmacies alike. Representatives Krishnamoorthi and Harshbarger's legislation is a vital step toward restoring fairness and competition to the prescription drug marketplace. This bill recognizes what pharmacists across the country have long known that PBMs should not be allowed to profit by controlling both the rules of the game and the players on the field. We applaud this bold effort to protect federal employees, preserve pharmacy access, and bring integrity back to the system,” Garth K. Reynolds, RPh, Executive Director of the Illinois Pharmacists Association, said.
“American Pharmacy Cooperative, Inc. is grateful for the leadership of Representatives Krishnamoorthi and Harshbarger in striking at the heart of PBM conflicts of interest and for fighting to protect federal employees from unfair practices of vertically integrated PBMs. PBMs in the Federal Employee Health Benefits Program (“FEHBP”) are steering patients to their pharmacies and marking up drugs used to treat life threatening diseases by thousands of percent. The Fair Pharmacies for Federal Employees Act will end PBM self-dealing, save money, and restore patient choice in the FEHBP,” Greg Reybold, Vice President of Healthcare Policy & General Counsel of American Pharmacy Cooperative, Inc., said.
The full text of the legislation is available here.