CVS CEO Defends PBMs, Blames Pharmaceutical Companies for High Drug Prices

In a bold stance during CVS Health’s latest earnings call, CEO David Joyner addressed the deepening controversy over rising prescription drug costs. Instead of shouldering responsibility for higher prices, he directed blame at pharmaceutical companies, accusing them of monopolistic pricing strategies that drive up expenses for consumers. His comments come amid increasing scrutiny of pharmacy benefit managers (PBMs) like CVS-owned Caremark, which are facing growing regulatory pressure from lawmakers across the political spectrum.

The Role of PBMs in Drug Pricing

Pharmacy benefit managers play a significant role in the healthcare system by negotiating prices with drug manufacturers on behalf of insurance companies. They control which medications appear on insurance formularies and the amount pharmacies receive for dispensing prescribed drugs. However, critics argue that PBMs manipulate these processes to maximize profits. They claim that PBMs inflate costs for insurers, pay pharmacies less than their fair share, and fail to pass negotiated savings on to consumers.

Taking the helm as CVS Health’s CEO in October 2024, Joyner took a strong stance on the issue. During the company’s fourth-quarter earnings call, he positioned PBMs as necessary intermediaries that counteract skyrocketing drug prices set by manufacturers. “Branded drug manufacturers added $21 billion in spending within just the first three weeks of January 2025 alone,” Joyner pointed out, emphasizing what he sees as an alarming price surge driven by pharmaceutical companies.

Pharmaceutical Industry Pushes Back

Joyner’s remarks triggered an immediate response from pharmaceutical industry leaders. PhRMA, the leading lobbying group for drug manufacturers, refuted his claims. In a strongly worded statement, the group accused PBMs of acting as “healthcare conglomerates” that prioritize their own financial gain rather than patient affordability. According to PhRMA, PBMs take a substantial portion of manufacturer rebates but fail to pass those savings on to consumers, contributing to higher overall drug costs.

This growing dispute is unfolding alongside heightened government scrutiny of PBM operations. Lawmakers from both parties, along with state attorneys general and the Federal Trade Commission, are intensifying investigations into PBM business practices. As the government looks for ways to address the rising cost of healthcare, the role of PBMs in drug pricing is becoming a focal point of policy discussions.

What It Means for Consumers

For millions of Americans, this debate is about more than corporate profits—it affects access to affordable and essential medications. The rising cost of prescription drugs has placed a significant financial burden on patients, leading to a heated discussion on whether PBMs ultimately help or harm consumers.

According to Joyner, PBMs play a vital role in stabilizing prices by challenging excessive increases from drug manufacturers, generating over $100 billion in annual value. He argues that without PBMs negotiating discount rates, costs would rise even higher. Critics, however, maintain that PBM operations often result in restricted access to lower-cost alternatives and a lack of transparency in pricing structures.

As government agencies continue their investigations and new regulatory actions loom, the debate over whether PBMs or manufacturers are responsible for high drug prices is far from settled. Moving forward, policymakers will face the challenge of determining whether stricter regulations are needed to rein in PBM practices, pharmaceutical company pricing, or both. While this battle plays out, patients and employers must navigate an increasingly complex and expensive prescription drug system, hoping for future reforms that prioritize affordability and access.