Stephen J. Ubl, President and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), said that American leaders should address the role of intermediaries in the drug supply chain. He noted that these intermediaries now capture more in rebates, discounts, and fees than the total price of drugs. The statement was made in an op-ed.
“American leaders can start by tackling the bloated middle of the drug supply chain,” said J. Ubl. “Middlemen who neither invent nor administer medicines to patients now collect more in rebates, discounts, and fees than the total price of drugs in many other countries.”
Pharmacy benefit managers (PBMs) act as third-party administrators for prescription drug programs. They negotiate with manufacturers to secure discounts and rebates, manage pharmacy networks, and process claims for insurers and employers. Their role also includes medication therapy management and mail-order pharmacy services, making them influential intermediaries in the U.S. drug supply chain.
A 2025 Federal Trade Commission report revealed that the three largest PBMs—Caremark Rx, Express Scripts, and OptumRx—generated over $7.3 billion in revenue from significant markups on specialty generic drugs between 2017 and 2022. This practice often involves charging health plans more than what pharmacies are reimbursed, a method known as spread pricing, which allows PBMs to retain the difference as profit.
According to Save Community Pharmacies, during the first half of 2024, Pennsylvania experienced the closure of 140 pharmacies. Nearly a third of counties in the state now have fewer than 10 pharmacies. These closures have been attributed to inadequate reimbursement rates from PBMs, creating financial strain for independent pharmacies.
Ubl has served as President and CEO of PhRMA since 2015, where he leads advocacy efforts for the U.S. biopharmaceutical industry and represents member companies on public policy issues. Before joining PhRMA, he was president and CEO of AdvaMed, the world’s largest medical technology association.
