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Rising health care costs are squeezing Indiana families and businesses—and pharmacy benefit managers are a big reason why.
PBMs claim to negotiate savings, but federal investigations show otherwise. The “Big 3”—Caremark (part of CVS), Express Scripts and OptumRx (part of UnitedHealth Group)—are driving up costs and pocketing billions at the expense of Indiana employers and workers.
These Fortune 25 giants rank above every U.S. drug manufacturer in terms of revenue and dictate where you get medications and what you pay.
The Federal Trade Commission’s 2025 report found PBMs marked up more than half of specialty generics by 100% or more, with 1 in 5 exceeding 1,000%.
These markups generated more than $7.3 billion in excess revenue for PBMs from 2017 to 2022 while they claimed to be saving money for American employers. PBMs also engaged in harmful spread-pricing practices, billing employers more than they reimbursed pharmacies, resulting in another $1.4 billion in profit.
Employer plan payments for specialty generics grew at a 21% compound annual growth rate for commercial claims from 2017 to 2021, and patient cost-sharing rose 21%.
Thankfully, Indiana employers have powerful tools at their disposal to fight back, and my colleagues and I have worked hard to pass laws to hold these entities accountable, increase transparency and reduce costs. Indiana Code 27-1-44.5 grants employers the right to audit their pharmacy benefit contracts annually.
When we pass good laws at the Statehouse, it’s important for Hoosiers to know just how they can use those laws to their benefit. That’s why I’m encouraging Indiana businesses to step up and take action to help lower health care costs by taking the following actions.
Audit your PBM contracts annually. Use your legal right under Indiana law to audit your PBM’s pricing practices. Look for spread pricing, rebate retention and inflated drug costs.
Demand full claims transparency and require access to your plan’s claims data. This allows you to identify waste, abuse and opportunities for savings. Check reimbursement rates at different pharmacies for the same medication. Recent reports show that PBMs pay their own pharmacies—such as CVS for CVS/Caremark—a higher rate for the same medication than they pay a non-affiliated pharmacy, like your local mom-and-pop drugstore.
Differences between these two prices indicate places where bloat might be occurring to profit the PBM and increase your health care costs. This excess is exacerbated when the PBM either encourages or requires your employees to use their affiliated pharmacies.
Engage independent experts. Partner with pharmacy consultants or fiduciary advisers who can help you interpret data, negotiate fairer contracts or choose a new PBM that doesn’t engage in spread pricing or rebate hoarding. Transparent PBMs charge a flat fee, disclose rebates and pass savings on.
Support legislative reform. Advocate for stronger state and federal oversight of PBMs. The FTC’s findings underscore the urgent need for reform. Urge leaders in Congress to keep the pressure on PBMs and finally pass much-needed reform this year.
Educate your workforce on the impact of PBMs. Help employees understand how PBM practices drive up their costs.
PBMs have profited in the shadows for too long. It’s time for Indiana employers to demand accountability and transparency.•
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McGuire, a Republican, represents District 93 in the Indiana House of Representatives.
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