Attorney General Ellison asks congress to prohibit pharmacy benefit managers from owning or operating pharmacies
April 15, 2025 (SAINT PAUL) — Attorney General Ellison joined a bipartisan coalition of 39 attorneys general in sending a letter to congressional leadership urging them to pass an act that would prohibit pharmacy benefit managers (PBMs) from owning or operating pharmacies.
"My mission is to help Minnesotans afford their lives, which is why I am taking on pharmacy benefit managers once again. PBMs were supposed to help lower drug costs by negotiating rebates and bulk discounts with prescription drug manufacturers and passing the savings along to consumers," said Attorney General Keith Ellison. "Instead, the PBMs themselves are pocketing the savings they generate and passing high drug costs along to consumers. This is unacceptable, and it is just the beginning of the issues PBMs cause. Right now, PBM-affiliated pharmacies are causing serious harm by, among many other things, using their power and leverage to drive independent pharmacies out of business. This is particularly harmful to folks in Greater Minnesota who generally have fewer pharmacy options to choose from. Today, I am standing with a bipartisan coalition of attorneys general and calling on Congress to pass legislation that would prohibit PBMs from owning or running pharmacies. The last thing we need is for these greedy middlemen to acquire more power to drive up prices on the drugs Minnesotans depend on.”
PBMs are third-party administrators of prescription drug programs for health plans. Over the past few decades, horizontal consolidation and vertical integration have transformed PBMs from useful administrative service providers into market-dominating behemoths that control the industry. Each of the top six PBMs operate their own affiliated pharmacies, while five of the top six are also a part of parent conglomerates that operate insurance companies and health care clinics. PBMs—through ownership of affiliated pharmacies—are contracting with and have power over their own pharmacies’ competition. The PBMs then use their place as middlemen to exert this power in ways that harm independent pharmacies, forcing these small businesses to accept contractual terms that are confusing, unfair, arbitrary, and harmful. Over the course of the last decade, approximately ten percent of rural independent pharmacies in the United States have closed.
The control of the pharmaceutical ecosystem by PBMs has resulted in decreased access, affordability, and choice for many Americans seeking prescription healthcare. Attorney General Ellison and the bipartisan coalition argue that congressional action is warranted to restore a free market and protect consumers and small businesses. They urge Congress to take action to protect consumers by enacting a law prohibiting PBMs or their parent companies from owning a pharmacy.
This is the latest action Attorney General Ellison has taken to rein in the power of PBMs, with the goal of lowering drug prices for Minnesotans. In July of 2021, Attorney General Ellison led a bipartisan coalition of 34 attorneys general in defense of a North Dakota law seeking to regulate PBMs, which was being challenged by the PBM’s national lobbying association. In June of 2024, Attorney General Ellison led another bipartisan coalition of 35 attorneys general in defense of an Oklahoma law regulating PBMs.
Regulating the abusive practices of pharmacy benefit managers was also a key recommendation of Attorney General Ellison’s 2019-2020 Advisory Task Force on Lowering Pharmaceutical Drug Prices. The task force’s February 2020 report identified the opacity of, and conflicts of interest present in, PBMs’ business models of PBMs as one of the top factors driving the high cost of pharmaceutical drugs. The report recommended building on the 2019 legislation to robustly regulate PBMs and their business practices.
The coalition that sent the letter to Congress was led by Arkansas Attorney General Tim Griffin, Massachusetts Attorney General Andrea Joy Campbell, Missouri Attorney General Andrew Bailey, and Vermont Attorney General Charity R. Clark. In addition to Attorney General Ellison, the attorneys general of the following states and territories also signed on to the letter: Alaska, American Samoa, Arizona, California, Delaware, District of Columbia, Hawaii, Illinois, Kentucky, Louisiana, Maine, Maryland, Michigan, Mississippi, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Virgin Islands, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
