[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4509 Introduced in Senate (IS)]
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119th CONGRESS
2d Session
S. 4509
To prohibit pharmacy benefit managers and pharmacies from being under
common ownership, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 13, 2026
Ms. Warren (for herself, Mr. Hawley, Mr. Fetterman, and Mr. Marshall)
introduced the following bill; which was read twice and referred to the
Committee on the Judiciary
_______________________________________________________________________
A BILL
To prohibit pharmacy benefit managers and pharmacies from being under
common ownership, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Patients Before Monopolies Act'' or
the ``PBM Act''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) Pharmacy benefit managers are corporate entities that
play a dominant role in pharmaceutical supply chains,
determining which drugs health plans will cover for enrollees,
what prices patients and health plans will pay for those drugs,
and how much health plans will reimburse pharmacies for
dispensing them.
(2) The market for pharmacy benefit manager services has
become highly concentrated. As of 2025, the 6 largest pharmacy
benefit managers are each integrated into large health care
conglomerates that include downstream businesses such as
retail, mail order, and specialty pharmacies. These
conglomerates also processed more than 90 percent of the
prescriptions in the United States in 2023.
(3) The 3 largest pharmacy benefit managers are also
vertically integrated into health care platforms that include
both upstream business lines, like health insurance, and
downstream suppliers, like pharmacies and providers.
(4) The Federal Trade Commission has found that vertically
integrated pharmacy benefit managers have both the ability and
incentive to steer business to their own affiliated pharmacies,
which reduces competition and increases prescription drug costs
for patients.
(5) Pharmacy benefit managers increasingly leverage their
market power to pressure smaller, unaffiliated, independent
pharmacies to enter into unfavorable contracts with the largest
pharmacy benefit managers. This dynamic has likely contributed
to the closure of more than 7,000 pharmacies between 2019 and
2024.
(6) Self-preferencing of affiliated pharmacies may also
allow large, vertically integrated health conglomerates to
evade statutory limits on profits known as the Medical Loss
Ratio. Gaming of the profit constraint using transfer pricing
techniques may allow affiliated health insurance businesses to
hide profits in the unregulated pharmacy business segment,
costing enrollees and taxpayers money.
(7) Pursuant to its powers under article I, section 8, of
the United States Constitution, Congress has the ability to
create any law necessary and appropriate to regulate interstate
commerce. As pharmacy benefit managers are part of large,
national health conglomerates that operate across state lines,
and engage in intrastate activities that also substantially
relate to interstate commerce, Congress intends to regulate
pharmacy benefit managers in the public interest.
(8) In order to eliminate the conflicts of interest
described in paragraphs (1) through (7) and restore competition
to the marketplace, the Federal Government should--
(A) protect patients, independent pharmacies, and
taxpayers by structurally separating vertically
integrated health conglomerates;
(B) require parent companies that own a pharmacy
benefit manager or insurer to divest their pharmacy
businesses;
(C) enable Federal agencies, state attorneys
general, and private citizens to bring civil actions to
enforce the structural separation of these companies;
and
(D) grant the Federal Trade Commission and
Department of Justice additional authority to review
and block future transactions that would re-create
these conflicts of interest.
SEC. 3. PROHIBITIONS RELATING TO ANTICOMPETITIVE PHARMACY OWNERSHIP AND
CONTRACTS.
(a) Prohibition on Pharmacy Ownership by Entities Providing
Insurance or Pharmacy Benefit Management Services.--
(1) In general.--It shall be unlawful for any person to
both--
(A) directly or indirectly own, operate, control,
or direct the operation of the whole or any part of a
pharmacy; and
(B) directly or indirectly own, operate, or control
the whole or any part of--
(i) an insurance company; or
(ii) a pharmacy benefit manager.
(2) Divestment.--Not later than 1 year after the date of
enactment of this Act, any person in violation of paragraph (1)
shall divest the pharmacy of such person.
(b) Antitrust Enforcement.--
(1) In general.--Both the Federal Trade Commission and the
Assistant Attorney General in charge of the Antitrust Division
shall have jurisdiction, jointly or separately, to enforce this
section.
(2) Penalties for failure to divest.--
(A) Guidance.--Not later than 30 days after the
date of enactment of this Act, the Chair of the Federal
Trade Commission and the Assistant Attorney General in
charge of the Antitrust Division shall issue guidance
specifying milestones for divestment within the
deadline under subsection (a)(2).
(B) Penalties.--
(i) In general.--For any person that does
not comply with the milestones specified under
subparagraph (A), the Chair of the Federal
Trade Commission or the Assistant Attorney
General in charge of the Antitrust Division
shall cause 10 percent of the profits of the
person to be transferred into escrow on a
monthly basis, to be--
(I) returned to the person if
divestment occurs by the deadline under
subsection (a)(2); or
(II) deposited into the fund
described in subsection (c)(7) if
divestment does not occur by the
deadline under subsection (a)(2).
(C) Trustee.--If divestiture does not occur by the
deadline under subsection (a)(2), a divestiture trustee
shall oversee the divestiture required under that
paragraph. The divestiture trustee shall have the
authority to sell the pharmacy.
(c) Civil Actions.--
(1) In general.--When the Inspector General of the
Department of Health and Human Services, the Assistant Attorney
General in charge of the Antitrust Division of the Department
of Justice, the Federal Trade Commission, or an attorney
general of a State has reason to believe that a person is in
violation of subsection (a), such Inspector General, Assistant
Attorney General, Federal Trade Commission or attorney general
of a State may bring a civil action in an appropriate district
court of the United States.
(2) Private right of action.--
(A) In general.--An individual alleging damages as
a result of a violation of this Act may bring a civil
action in any court of competent jurisdiction, State or
Federal.
(B) Relief.--In a civil action brought under
subparagraph (A) in which the plaintiff prevails, the
court may award--
(i) treble damages;
(ii) reasonable attorney's fees and
litigation costs; and
(iii) any other relief, including equitable
or declaratory relief, that the court
determines appropriate.
(3) Actions by state attorneys general.--If the attorney
general of a State has reason to believe that an interest of
the residents of the State has been or is being threatened or
adversely affected by a practice that violates subsection (a),
the attorney general of the State may, as parens patriae, bring
a civil action on behalf of the residents of the State in an
appropriate district court of the United States to obtain
appropriate relief, including monetary damages.
(4) Injunctive and equitable relief.--In any action
described in paragraph (1), (2), or (3), the applicable court,
on a finding that a person is in violation of subsection (a),
shall issue an order requiring such person--
(A) to cease and desist from such violation, and,
if applicable, divest the pharmacy services of such
person; and
(B) to disgorge any revenue received from the
pharmacy from the sale of prescription drugs during the
period of such violation.
(5) Other relief.--In addition to any relief obtained under
paragraph (1), (2), or (3), the court may grant any other
equitable relief necessary to redress and prevent recurrence of
the violation.
(6) Right to jury trial.--Either party, upon request, shall
have the right to a jury trial.
(7) Deposit.--Any revenue received from the sale of
prescription drugs disgorged pursuant to an action under
paragraph (1) shall be deposited in a fund created by the
Federal Trade Commission and distributed by the Federal Trade
Commission to be put to use in the interest of serving the
health care needs of the harmed community, including consumers
overcharged at vertically integrated pharmacies.
(d) FTC and DOJ Review.--
(1) Reporting required.--Any divestment of a pharmacy or
pharmacy benefit manager required under subsection (a) shall be
reported to the Federal Trade Commission and the Assistant
Attorney General in charge of the Antitrust Division of the
Department of Justice under section 7A of the Clayton Act (15
U.S.C. 18a) without respect to the thresholds under subsection
(a)(2) of that section.
(2) Tolling of divestment period during review.--The
divestment period under subsection (a) shall be tolled during
the pendency of any waiting period required under section 7A of
the Clayton Act (15 U.S.C. 18a).
(3) Review of effect of divestiture.--With respect to each
divestiture undertaken pursuant to subsection (a), in addition
to any applicable review under section 7A of the Clayton Act
(15 U.S.C. 18a), the Federal Trade Commission and the Assistant
Attorney General in charge of the Antitrust Division of the
Department of Justice shall review the effect on competition,
financial viability, and the public interest--
(A) of the divestiture; and
(B) of the subsequent acquisition of the divested
pharmacy by the acquiring person.
(4) Blocking of actions.--The Federal Trade Commission and
the Assistant Attorney General in charge of the Antitrust
Division of the Department of Justice, jointly or separately,
may bring a civil action in any court of competent jurisdiction
to block any action that would harm competition to the
detriment of the public interest with respect to the conflicts
of interest described in subsection (a).
(e) Rulemaking Authority.--The Federal Trade Commission shall
promulgate rules to carry out this section. Such rules shall not
diminish any obligation under this section.
(f) Reports Required.--The Chair of the Federal Trade Commission
and the Assistant Attorney General in charge of the Antitrust Division
of the Department of Justice shall submit to the appropriate
congressional committees quarterly reports on compliance with this Act,
including the status of any divestitures required under this Act.
(g) Rule of Construction.--Nothing in this section shall be
construed to limit the authority of the Federal Trade Commission, the
Inspector General of the Department of Justice, the Department of
Health and Human Services, or the attorney general of a State under any
other provision of law.
(h) Severability.--If any provision of this Act or the application
thereof to any person or circumstance is held invalid, the remainder of
this Act, or the application of that provision to persons or
circumstances other than those as to which it is held invalid, shall
not be affected thereby.
(i) Definitions.--In this section:
(1) Health plan.--The term ``health plan'' means any public
or private health insurance plan.
(2) Person.--The term ``person'' has the meaning given the
term in section 8 of the Sherman Act (15 U.S.C. 7).
(3) Pharmacy.--
(A) In general.--The term ``pharmacy'' means any
person, business, or entity licensed, registered, or
otherwise permitted by a State or a territory of the
United States to dispense, deliver, or distribute a
controlled substance, prescription drug, or other
medication--
(i) to the general public; or
(ii) to a bed patient for immediate
administration.
(B) Inclusions.--The term ``pharmacy'' includes--
(i) a mail-order pharmacy;
(ii) a specialty pharmacy;
(iii) a retail pharmacy;
(iv) a nursing home pharmacy;
(v) a long-term care pharmacy;
(vi) a hospital pharmacy;
(vii) an infusion or other outpatient
treatment pharmacy;
(viii) any organization the National
Provider Identifier (NPI) registration of which
has 1 or more taxonomy codes under the pharmacy
section of the National Uniform Claim Committee
(or a subsequent organization); and
(ix) any other type of pharmacy.
(4) Pharmacy benefit manager.--The term ``pharmacy benefit
manager'' means any person, business, or other entity, such as
a third-party administrator, regardless of whether such person,
business, or entity identifies itself as a pharmacy benefit
manager, that, either directly or indirectly through an
intermediary (including an affiliate, subsidiary, or agent) or
an arrangement with a third party--
(A) acts as a negotiator of prices, rebates, fees,
or discounts for prescription drugs on behalf of a
health plan or health plan sponsor;
(B) contracts with pharmacies to create pharmacy
networks and designs and manages such networks; or
(C) manages or administers the prescription drug
benefits provided by a health plan, including the
processing and payment of claims for prescription
drugs, arranging alternative access to or funding for
prescription drugs, the performance of utilization
management services, including drug utilization review,
the processing of drug prior authorization requests,
the adjudication of appeals or grievances related to
the prescription drug benefit, contracting with network
pharmacies, controlling the cost of covered
prescription drugs, or the provision of related
services.
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