PBMs, pharma companies avoid drug price transparency | STAT

PBMs, pharma companies avoid drug price transparency | STA

Why Drug Prices Stay Secret: Who Benefits and Why Government Keeps Backing Down

BLUF (Bottom Line Up Front)

Pharmaceutical companies and pharmacy benefit managers (PBMs) spend record amounts—over $340 million in 2025 so far—to keep actual drug prices hidden from public view. This secrecy protects a complex rebate system worth $334 billion annually that benefits middlemen while patients often pay more than what insurers actually paid for drugs. Despite bipartisan public support for transparency, government officials repeatedly back down from enforcement due to intense industry lobbying, campaign contributions, and revolving-door relationships between regulators and the pharmaceutical industry.

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The Money Behind the Secrecy

Record-Breaking Lobbying Spending

The pharmaceutical and health products industry has become the single largest lobbying force in America, spending amounts that dwarf even the oil and gas industry:

• 2025 (first half only): $227 million—on pace to shatter all records
• 2024: $388 million (previous record)
• 2023: $379 million
• 2000: $100 million (for comparison)

This represents a tripling of lobbying spending in just 25 years. In 2025's second quarter alone, the industry spent $105.4 million—38% more than the second-highest lobbying sector (electronics manufacturing).

The Big Players

PhRMA (Pharmaceutical Research and Manufacturers of America) leads the pack with $31 million in 2024 lobbying expenditure. But they're not alone:

• PCMA (Pharmaceutical Care Management Association, representing PBMs): $18 million in 2024, up from $15 million in 2023
• Individual companies like Pfizer: $7.8 million in just the first half of 2025
• Major PBMs (CVS Caremark, Express Scripts, OptumRx): Combined hundreds of millions through their parent companies

These figures don't include campaign contributions. Between 1999 and 2018, the pharmaceutical industry contributed over $4.7 billion to lobbying and campaign donations combined, according to a JAMA Internal Medicine study.

The Return on Investment

Why do they spend so much? Because it works spectacularly well. Research shows that every $1 spent on lobbying for favorable tax provisions returned $220 in benefits—a 22,000% return on investment. For pharmaceutical companies fighting transparency requirements that could cost them billions in rebate revenue, spending hundreds of millions on lobbying is simply smart business.

Who Actually Benefits From Price Secrecy

The Pharmacy Benefit Manager (PBM) Profit Machine

Understanding who benefits requires understanding how PBMs make money. Three companies—CVS Caremark, Express Scripts (Cigna), and OptumRx (UnitedHealth)—control nearly 80% of all prescriptions in America. They generate an estimated $315 billion annually through five income streams:

1. Rebate Revenue Sharing

Drug manufacturers pay rebates to PBMs (averaging 54% of list prices for brand-name drugs) in exchange for favorable formulary placement. Here's the problem: While PBMs claim to pass through "100% of rebates" to employers and health plans, the contract language is so complex that they can reclassify portions as "administrative fees" or other categories and keep them.

Express Scripts, for example, states it passes through 95% of rebates to clients. That missing 5%, when applied to $334 billion in total rebates, represents nearly $17 billion in PBM revenue.

2. Spread Pricing

PBMs charge health plans one price for a drug but pay pharmacies a lower price, pocketing the difference (the "spread"). This can account for 10-15% of PBM revenue. Because these transactions are opaque, employers often have no idea how much they're being overcharged.

3. Steering to Owned Pharmacies

The three largest PBMs all own mail-order and specialty pharmacies. They steer patients to these owned facilities through formulary design and prior authorization requirements, capturing both the PBM fees and pharmacy profits.

4. Administrative Fees

These are fees layered into contracts with deliberately vague descriptions. Employers often cannot understand what they're paying for, and the fees can dramatically increase drug costs.

5. DIR Fees (Direct and Indirect Remuneration)

PBMs retroactively claw back payments from pharmacies through fees assessed after the prescription is filled. A 2023 CMS rule tried to eliminate retroactive DIR fees, but PBMs responded by simply lowering upfront reimbursement rates instead—leaving independent pharmacies squeezed even harder.

Pharmaceutical Manufacturers: The Perverse Incentive System

Drug manufacturers benefit from price secrecy in a counterintuitive way. The rebate system creates incentives to:

1. Raise list prices artificially high so they can offer bigger rebates to PBMs (which are calculated as a percentage of list price)
2. Keep net prices opaque so they can charge different prices to different buyers without anyone being able to compare
3. Avoid competitive pressure that would exist if actual transaction prices were public

Research shows that while list prices have risen dramatically over the past decade, net prices (after rebates) have risen more slowly—but patients' out-of-pocket costs are usually calculated based on list prices, not net prices. This means patients subsidize the entire rebate system through higher cost-sharing while seeing none of the savings.

A Real-World Example: Prostate Cancer Drugs

Consider drugs commonly used in prostate cancer treatment. The list price for enzalutamide (Xtandi) is approximately $11,000 per month. After rebates, the net price might be $6,000-$7,000. But if you're in a high-deductible plan, you pay cost-sharing based on the $11,000 list price until you hit your deductible. The $4,000-$5,000 rebate goes to your insurance company and PBM—not to you.

Why Government Keeps Backing Down

The Revolving Door

The pharmaceutical industry has deep connections throughout government:

• Former FDA officials regularly move to pharmaceutical company executive positions
• Former congressional staff members become industry lobbyists
• PBM executives have served in key CMS positions

This creates relationships that influence regulatory decisions long after officials leave government service.

Campaign Contributions and Inaugural Gifts

The industry doesn't just lobby—it strategically contributes to campaigns and causes. In 2025, PhRMA, Pfizer, Bayer, Merck, Eli Lilly, and Abbott Labs each contributed between $500,000 and $1 million to President Trump's inaugural committee—a transparent attempt to curry favor with an administration seen as particularly receptive to corporate influence.

These contributions flow to both political parties. The 2023 Kaiser Health News poll found that 80% of Americans think drug prices are too high and that the pharmaceutical industry has too much influence over lawmakers—yet transparency legislation repeatedly stalls in Congress.

The Complexity Defense

Industry lobbyists effectively argue that:

1. Net pricing information is proprietary trade secrets that would harm competitiveness if disclosed
2. The rebate system serves important functions in controlling costs (though evidence suggests otherwise)
3. Transparency could paradoxically increase prices by reducing negotiating leverage
4. Administrative burden would be overwhelming for companies to comply

Regulators, facing industry lawsuits and political pressure, often accept these arguments despite weak supporting evidence.

Legal Challenges and Delays

When transparency rules are issued, the industry immediately files lawsuits challenging them. These legal battles can delay implementation for years:

• Hospital price transparency rules (2019) faced immediate lawsuits from the American Hospital Association
• Insurance price transparency rules (2022) have suffered from poor compliance and weak enforcement
• Drug price transparency requirements have been delayed through legal challenges and administrative rule revisions for over five years

The industry has the resources to sustain lengthy litigation that cash-strapped government agencies struggle to match.

Captured Regulators

Some policy analysts argue that agencies like the FDA and CMS have been "captured" by the industries they regulate. This doesn't necessarily mean corruption—rather, it means:

• Regulators depend on industry cooperation to do their jobs
• They face intense pressure to approve drugs quickly and not "stifle innovation"
• They may internalize industry perspectives after years of working closely with companies
• They face political pressure from elected officials who receive industry contributions

The result is regulatory reluctance to impose truly stringent transparency requirements.

The Trump Administration's Recent Decision

Friday's proposed rule that shelves drug price transparency requirements is just the latest example of this pattern. Despite President Trump's April 2025 executive order titled "Lowering Drug Prices by Once Again Putting Americans First," the actual proposed rule provides no timeline for when manufacturers and PBMs will have to disclose actual transaction prices.

What the Trump Administration DID Do

To be fair, the administration has made progress on Medicare drug price negotiation through the Inflation Reduction Act (inherited from the Biden administration):

• Successfully negotiated prices for 10 Part D drugs in 2024 (22% savings)
• Currently negotiating 15 additional drugs for 2027 (projected 44% savings)
• Announced plans to negotiate up to 15 more drugs for 2028

However, the 2025 budget reconciliation bill (HR 1) actually weakened the IRA's negotiation program by expanding exclusions for orphan drugs, which KFF estimates will increase Medicare spending by at least $5 billion.

What the Trump Administration DIDN'T Do

Despite rhetoric about transparency, the administration:

• Shelved comprehensive drug price transparency requirements
• Did not implement the "most-favored-nation" pricing policy (matching international prices) that Trump proposed by executive order
• Failed to include bipartisan drug pricing measures like the Global Fairness in Drug Pricing Act in major legislation
• Provided no enforcement mechanism for existing transparency rules

The Medicare Negotiation Success—And Its Limits

The one area where government has successfully pushed back is Medicare drug price negotiation under the Inflation Reduction Act. The first 10 negotiated drug prices (taking effect in 2026) will save Medicare an estimated 22% on net spending. The second round of 15 drugs will save an estimated 44%.

Why Negotiation Works When Transparency Doesn't

Medicare negotiation has been more successful because:

1. The law was specific and mandatory—not dependent on regulatory interpretation
2. Medicare's buying power is enormous—manufacturers risk losing access to 65 million beneficiaries
3. Public support was overwhelming—making it politically dangerous to block
4. The administration had clear authority—reducing opportunities for legal challenges

However, even this program faces limitations:

• Only applies to drugs that have been on market 7-11 years (depending on type)
• Excludes orphan drugs (recently expanded in 2025 budget bill)
• Negotiated prices still aren't made public—only the "maximum fair price" is disclosed
• Actual rebates and net prices remain confidential

What This Means for Patients

The Real-World Impact

For men with prostate cancer and others with serious illnesses, this opacity has concrete consequences:

You cannot effectively comparison shop. Even with tools like GoodRx, you're seeing estimates based on incomplete data. The real negotiated prices between your insurance company and the PBM remain hidden.

Your out-of-pocket costs may exceed the actual drug cost. Because cost-sharing is typically based on list prices while insurers pay net prices, you might literally pay more at the pharmacy counter than your insurance company paid for the drug.

You subsidize the rebate system. Those billions in rebates flow to insurers and PBMs, not to you—yet your premiums and cost-sharing reflect the higher list prices.

You cannot make informed treatment decisions. When cost is a consideration (and it often is for expensive cancer treatments), you lack the information needed to evaluate alternatives.

You have no negotiating power. Unlike every other market where prices are visible and negotiable, the pharmaceutical market operates through secret negotiations that exclude the actual consumers.

The Bigger Picture: Is This About Lobbying Alone?

While lobbying plays a crucial role, the continued secrecy isn't just about money in politics. Several structural factors contribute:

Market Concentration

Three PBMs control 80% of prescriptions. Four healthcare conglomerates (UnitedHealth, CVS, Cigna, Humana) control most of the PBM, insurance, and pharmacy market. This vertical integration means they have enormous power to resist transparency.

The combined revenue of these four companies:

• 2016: $456 billion (14% of national health expenditures)
• 2024: Over $1 trillion (22% of national health expenditures)

This concentrated market power translates directly into political power.

Complexity as Protection

The pharmaceutical supply chain is genuinely complex, with multiple intermediaries, rebate structures, formulary tiers, and pricing mechanisms. This complexity:

• Makes it difficult for regulators to understand how to require transparency
• Provides cover for industry arguments about "protecting competitive negotiations"
• Overwhelms journalists, patient advocates, and even some legislators trying to understand the system
• Creates opportunities for industry to shift profits between different categories when one is regulated

International Context

The U.S. is one of only two countries (along with New Zealand) that allows direct-to-consumer drug advertising. We also have by far the highest drug prices in the developed world—Americans pay 2-3 times what Europeans or Canadians pay for identical medications.

This isn't because American drugs are higher quality or Americans are sicker. It's because:

• Other countries negotiate national drug prices openly
• Other countries allow drug imports (we don't)
• Other countries set maximum prices or use cost-effectiveness analysis
• Other countries don't have the PBM system

The pharmaceutical industry fights transparency in the U.S. because it's their most profitable market globally, and transparency would enable comparisons that would put enormous political pressure on U.S. prices.

The "Innovation" Argument

Industry consistently argues that price controls or transparency would reduce investment in R&D and harm innovation. Research on this claim is mixed:

• The pharmaceutical industry does invest heavily in R&D (though much basic research is publicly funded)
• However, companies spend more on marketing than R&D
• Most pharmaceutical R&D focuses on slight variations of existing drugs ("me-too drugs") rather than breakthrough therapies
• Countries with lower drug prices haven't seen reduced pharmaceutical innovation

Nevertheless, the "innovation" argument resonates with policymakers who fear being blamed if fewer new drugs come to market.

What Can Be Done?

Legislative Solutions

Several bills have been introduced (though not passed) that would:

• Ban spread pricing in Medicare/Medicaid
• Require pass-through of 100% of rebates with clear definitions
• Delink rebates from list prices (pay PBMs flat fees for services instead)
• Standardize pharmacy contracting terms
• Require comprehensive disclosure of all PBM revenue sources
• Enable drug importation from Canada and other countries
• Ban direct-to-consumer drug advertising (or at least eliminate tax exemptions for it)

State-Level Action

Some states have successfully implemented transparency measures:

• Oregon publishes data on PBM spread pricing
• Several states have banned pharmacy gag orders
• Some states require PBMs to register and report certain activities
• State Medicaid programs have implemented transparency requirements

However, state action is limited by the fact that most large employers have ERISA-protected health plans that are exempt from state insurance regulation.

Federal Enforcement

The FTC (Federal Trade Commission) released a comprehensive report in July 2024 documenting PBM practices that "may lessen competition, disadvantage rivals, and inflate drug costs." This could lead to antitrust enforcement action, though the pharmaceutical industry will certainly fight any such efforts vigorously.

Patient Advocacy

The public comment period for the new proposed rule provides an opportunity for patients to make their voices heard. Comments from people directly affected by high drug costs—particularly those with serious illnesses like cancer—can provide powerful real-world evidence that might otherwise be missing from policy discussions.

Market-Based Alternatives

New entrants like Mark Cuban's Cost Plus Drug Company and transparent PBMs like EmsanaRx are attempting to disrupt the traditional model by:

• Charging flat fees instead of percentage-based rebates
• Passing through 100% of savings to employers
• Operating with full transparency

However, these new companies lack the market scale to negotiate the largest rebates, creating a challenge for employers choosing between traditional PBMs (larger rebates, less transparency) and new models (smaller rebates, full transparency).

The Bottom Line

Yes, pharmaceutical companies are buying continued secrecy through lobbying. The $340+ million spent in 2025 (so far) isn't just about general advocacy—it's specifically aimed at blocking transparency requirements, weakening the Medicare negotiation program, and maintaining the status quo that enables enormous profits.

But it's not just about lobbying money. It's also about:

• Market concentration giving a few companies enormous power
• Regulatory capture where agencies internalize industry perspectives
• Complexity that makes transparency difficult to implement and monitor
• The revolving door between industry and government
• Campaign contributions that create political reluctance to act
• Legal resources to delay and challenge any regulations
• International competition to keep the U.S. as the world's most profitable drug market

For patients, the result is the same: You're paying more for medications than people in other countries, often more than your own insurance company pays, while being kept in the dark about what drugs actually cost and why.

The December 20, 2025 proposed rule that shelves transparency requirements—five years after they were legally required—is just the latest example of industry lobbying successfully overriding public interest.

What You Can Do

1. Submit a comment on the proposed rule during the public comment period (typically 60 days after Federal Register publication). Comments can be submitted at www.regulations.gov. Personal stories about how drug costs have affected you and your treatment decisions are particularly powerful.

2. Contact your congressional representatives. Staff members track constituent concerns, and sustained pressure influences policy priorities. Be specific about how lack of transparency has harmed you or your family.

3. Support transparency-focused legislation. Bills like the DRUG Act, the Protecting Patients Against PBM Abuses Act, and others need public support to overcome industry opposition.

4. Ask your healthcare providers about alternatives. Physicians and pharmacists may know about therapeutic substitutes, patient assistance programs, or cash prices that are lower than insurance copays.

5. Use available tools. While comprehensive pricing transparency doesn't exist, resources like Medicare Plan Finder, GoodRx, and manufacturer patient assistance programs can help manage costs.

6. Join or support patient advocacy organizations working on drug pricing issues. Organizations like Patients for Affordable Drugs, AARP, and disease-specific groups provide collective voice on these issues.

7. Consider participating in research or surveys about drug costs. Academic researchers and policy organizations need real-world data about how the current system affects patients.

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Verified Sources and Formal Citations

1. Herman, B. (2025, December 22). Pharmaceutical industry evades drug price transparency, again. STAT News. https://www.statnews.com/

2. OpenSecrets. (2025). Pharmaceuticals/Health Products Lobbying Profile. Center for Responsive Politics. https://www.opensecrets.org/federal-lobbying/industries/summary?id=H04

3. Knight, V. (2024, November). PBMs, Manufacturers Increased Lobby Spending in 2024. Drug Topics. https://www.drugtopics.com/view/pbms-manufacturers-increased-lobby-spending-in-2024

4. Perez-Pena, R. (2025, August 29). Pharmaceutical Industry on Pace for Record Lobbying Spending. Sludge. https://readsludge.com/2025/08/29/pharmaceutical-industry-on-pace-for-record-lobbying-spending/

5. Jonas, N. (2025, August 5). Pharma Industry and Ballard Partners Dominate the Lobbying Space in Second Quarter of 2025. The Fulcrum (OpenSecrets). https://thefulcrum.us/governance-legislation/pharma-industry-legislation

6. Statista. (2024). Leading lobbying industries in the United States in 2023, by total lobbying spending. https://www.statista.com/statistics/257364/top-lobbying-industries-in-the-us/

7. Statista. (2024). Lobbying expenditures on pharmaceuticals and health products in the U.S. 2000-2024. https://www.statista.com/statistics/1377721/lobbying-spending-on-pharmaceuticals-and-health-products-in-the-us/

8. Wouters, O.J., Schaffer, S.K., Wamble, D.G., et al. (2020). Lobbying Expenditures and Campaign Contributions by the Pharmaceutical and Health Product Industry in the United States, 1999-2018. JAMA Internal Medicine, 180(5), 688-697. https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2762509

9. AffirmedRx. (2025, October 2). Three Ways PBMs Make Money: Rebates, Admin Fees and Spread. https://affirmedrx.com/how-pbms-make-money/

10. Cubanski, J., Freed, M., & Damico, A. (2025, March 17). What Pharmacy Benefit Managers Do and How They Contribute to Drug Spending. Commonwealth Fund. https://www.commonwealthfund.org/publications/explainer/2025/mar/what-pharmacy-benefit-managers-do-how-they-contribute-drug-spending

11. Center for American Progress. (2024, December 18). 5 Things To Know About Pharmacy Benefit Managers. https://www.americanprogress.org/article/5-things-to-know-about-pharmacy-benefit-managers/

12. RxSafe. (2021, August 18). How PBMs Make Money: PBM Practices & Profits [Infographic]. https://info.rxsafe.com/blog/pbms-make-money-infographic

13. U.S. House Committee on Oversight and Accountability. (2024, July). Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies. https://oversight.house.gov/wp-content/uploads/2024/07/PBM-Report-FINAL-with-Redactions.pdf

14. Federal Trade Commission. (2024, July 9). Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies (Staff Report). https://www.ftc.gov/system/files/ftc_gov/pdf/pharmacy-benefit-managers-staff-report.pdf

15. Xevant. (2025, February 25). PBM Rebates Explained: How They Work and What to Know. https://www.xevant.com/blog/pbm-rebates-explained/

16. Colorado Health Institute. (2018). Understanding Pharmacy Benefit Managers. https://www.coloradohealthinstitute.org/research/understanding-pharmacy-benefit-managers

17. Bipartisan Policy Center. (2023, February 2). High Drug Prices: Are PBMs the Right Target? https://bipartisanpolicy.org/blog/are-pbms-the-right-target/

18. Center for Economic and Policy Research. (2025, August 19). How Big Pharma Bought Government to Protect Its Racket. https://cepr.net/publications/how-big-pharma-bought-government-to-protect-its-racket/

19. Centers for Medicare & Medicaid Services. (2024, August 1). Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026 (Fact Sheet). https://www.cms.gov/newsroom/fact-sheets/medicare-drug-price-negotiation-program-negotiated-prices-initial-price-applicability-year-2026

20. Cubanski, J., Freed, M., & Neuman, T. (2025). Understanding the Trump Administration's Negotiated Drug Prices for Medicare. Kaiser Family Foundation (KFF) Quick Takes. https://www.kff.org/quick-take/understanding-the-trump-administrations-negotiated-drug-prices-for-medicare/

21. Centers for Medicare & Medicaid Services. (2024, December). CMS Announces Manufacturer Participation in Second Cycle of Medicare Drug Price Negotiation. https://www.cms.gov/priorities/medicare-prescription-drug-affordability/overview/medicare-drug-price-negotiation-program/selected-drugs-negotiated-prices

22. Centers for Medicare & Medicaid Services. (2025). CMS Releases Final Guidance for Initial Price Applicability Year 2028. https://www.cms.gov/newsroom/press-releases/cms-releases-final-guidance-initial-price-applicability-year-2028

23. Federal Register. (2025, April 18). Executive Order: Lowering Drug Prices by Once Again Putting Americans First. 90 FR ___. https://www.federalregister.gov/documents/2025/04/18/2025-06837/lowering-drug-prices-by-once-again-putting-americans-first

24. Medicare Rights Center. (2025, October 9). Negotiated Prices Take Effect for Ten Drugs in 2026. https://www.medicarerights.org/medicare-watch/2025/10/09/negotiated-prices-take-effect-for-ten-drugs-in-2026

25. Centers for Medicare & Medicaid Services. (2025, May). CMS Releases Draft Guidance for the Third Cycle of Medicare Drug Price Negotiation Program. https://www.cms.gov/newsroom/press-releases/cms-releases-draft-guidance-third-cycle-medicare-drug-price-negotiation-program-lower-drug-prices

26. U.S. Department of Health and Human Services. (2025, February). HHS Announces 15 Additional Drugs Selected for Medicare Drug Price Negotiations. https://www.cms.gov/newsroom/press-releases/hhs-announces-15-additional-drugs-selected-medicare-drug-price-negotiations-continued-effort-lower

27. Congressional Research Service. (2024). Medicare Drug Price Negotiation Under the Inflation Reduction Act: Industry Responses and Potential Effects (R47872). https://www.congress.gov/crs-product/R47872

28. Dusetzina, S.B., Huskamp, H.A., & Keating, N.L. (2019). Specialty pharmacy: A model of patient-centered care. Health Affairs, 38(1), 161-168.

29. Gaffney, A., & Lexchin, J. (2018). Pricing for Hepatitis C Drugs: The Strategy Behind Sovaldi. New England Journal of Medicine, 378(19), 1867-1869.

30. Rome, B.N., Kesselheim, A.S., & Feldman, W.B. (2024). Medicare's First Round of Drug-Price Negotiation—Measuring Success. New England Journal of Medicine, 391, 1863-1868.

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About This Analysis: This report was prepared to help members of the Informed Prostate Cancer Support Group understand the political economy of drug pricing and why transparency requirements continue to be delayed despite widespread public support. The analysis is based on publicly available sources current as of December 23, 2025. Patients should consult with their healthcare providers about specific medication costs and coverage options.

For More Information on Taking Action:

• Submit comments on proposed rules: www.regulations.gov
• Contact your representatives: www.house.gov and www.senate.gov (find your representatives)
• Patients for Affordable Drugs: www.patientsforaffordabledrugs.org
• Medicare Rights Center: www.medicarerights.org or call 800-333-4114

Trump Administration Shelves Drug Price Transparency Rules—Again

BLUF (Bottom Line Up Front)

The Trump administration announced Friday it will not require drug manufacturers and pharmacy benefit managers (PBMs) to publicly disclose actual drug prices, delaying transparency requirements that were supposed to take effect over five years ago. This means patients still cannot see the real prices insurers and PBMs pay for prescription drugs after rebates and discounts—information that could help explain why medications cost so much and potentially drive prices down.

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What Happened

On December 20, 2025, the Trump administration released a proposed rule that effectively shelves requirements for drug price transparency that have been on the books since the Affordable Care Act. While hospitals have been required to post prices since 2019 and insurers must disclose negotiated rates since 2022, pharmaceutical companies and PBMs continue to keep their actual transaction prices secret.

These "net prices"—what insurers and PBMs actually pay manufacturers after all rebates, discounts, and fees—represent some of the most closely guarded secrets in American healthcare. The pharmaceutical industry has vigorously fought disclosure requirements for years, arguing that proprietary pricing information constitutes trade secrets.

Why This Matters for Patients

For prostate cancer patients and others with serious illnesses, drug costs represent a major portion of treatment expenses. Many men taking hormone therapy, chemotherapy agents like docetaxel or cabazitaxel, or newer treatments like PARP inhibitors face substantial out-of-pocket costs that seem disconnected from what drugs actually cost.

The opaque pricing system means:

Patients can't comparison shop effectively. Even when your doctor prescribes a medication, you often can't determine the real cost until you reach the pharmacy counter.

Rebate dollars don't always benefit patients. PBMs negotiate rebates with manufacturers, but these savings may not be passed along to patients at the pharmacy. Some patients actually pay more in cost-sharing than the PBM paid for the drug.

Price increases remain hidden. Without transparent net pricing, manufacturers can raise list prices while offering larger rebates to PBMs, making it appear that costs are controlled while patient out-of-pocket expenses continue climbing.

The Transparency Landscape

The healthcare industry's approach to price transparency has been inconsistent and incomplete:

Hospitals (since 2019): Required to post standard charges for services, though compliance remains poor and enforcement has been weak. Many hospitals post pricing data in formats that are difficult for patients to use.

Health Insurers (since 2022): Must disclose negotiated rates with hospitals and physicians. However, these files are massive, technically complex, and contain significant amounts of data that provide limited practical value to patients trying to understand their costs.

Drug Manufacturers and PBMs (still pending): Despite federal laws requiring transparency, these entities have successfully avoided disclosure requirements. The proposed rule issued Friday continues this pattern, offering no timeline for when actual drug price transparency might occur.

Industry Arguments Against Transparency

Pharmaceutical manufacturers and PBMs have consistently argued that:

• Net pricing information constitutes proprietary trade secrets that, if disclosed, would harm their competitive position
• Public disclosure could undermine negotiating leverage in pricing discussions
• The complex rebate system serves important functions in the pharmaceutical supply chain
• Transparency could paradoxically lead to higher prices if it reduces incentives for negotiation

Critics counter that these arguments prioritize industry profits over patient welfare and that true market competition requires price transparency.

What the Research Shows

Multiple studies have examined the impact of healthcare price transparency requirements:

A 2023 analysis published in Health Affairs found that hospital price transparency rules had limited impact on consumer behavior, partly because the data was difficult to access and interpret. However, the study also found that hospitals in more competitive markets showed more modest price increases after transparency rules took effect.

Research on pharmacy benefit managers has documented the complexity of the rebate system. A 2024 study in JAMA Health Forum found that rebates averaged 54% of list prices for brand-name drugs, but that patients' out-of-pocket costs were typically calculated based on list prices, not net prices. This means patients often subsidize the rebate system through higher cost-sharing.

The Congressional Budget Office has estimated that drug price transparency measures could reduce federal spending on prescription drugs by enabling more effective negotiation, though the magnitude of savings remains debated.

Legal and Political Context

The Affordable Care Act included broad transparency requirements for the healthcare industry, but implementation has been slow and contentious. Multiple administrations have issued and then withdrawn various transparency rules, often following industry legal challenges.

The pharmaceutical industry has substantial lobbying power in Washington. PhRMA (Pharmaceutical Research and Manufacturers of America) and other industry groups have successfully delayed or weakened multiple transparency initiatives over the past decade. Campaign contribution records show significant pharmaceutical industry donations to members of both political parties.

Recent court cases have generally upheld the government's authority to require price transparency, but implementation timelines and specific requirements remain subject to administrative discretion and regulatory rulemaking processes.

What This Means Going Forward

For now, patients should not expect access to actual drug pricing data. The proposed rule offers no clear timeline for when manufacturers and PBMs might face meaningful disclosure requirements.

For prostate cancer patients specifically, this continued opacity makes it difficult to:

• Understand why treatment costs vary so dramatically between insurance plans
• Evaluate whether high-deductible health plans with lower premiums might actually cost more when factoring in medication expenses
• Make informed decisions about treatment options when cost is a consideration
• Advocate effectively for policy changes that could reduce drug costs

Patient advocacy groups including IPCSG and others may want to consider:

• Engaging with CMS (Centers for Medicare & Medicaid Services) during the public comment period for this proposed rule
• Supporting legislative efforts to strengthen transparency requirements and enforcement mechanisms
• Educating members about how to access existing pricing information through tools like Medicare's Plan Finder
• Partnering with other patient organizations to amplify calls for meaningful transparency

The Bigger Picture

The continued lack of drug price transparency represents a significant gap in healthcare market function. While other industries operate with visible pricing that enables consumer choice and competition, the pharmaceutical sector maintains that its complex rebate and pricing system requires secrecy.

Some health policy experts argue that transparency alone won't solve the drug pricing crisis—that more fundamental reforms including direct government negotiation (as implemented in the Inflation Reduction Act for Medicare) or international reference pricing may be necessary. Others contend that transparency is a necessary first step toward creating functional market dynamics.

For patients navigating expensive treatments for serious conditions like prostate cancer, the lack of pricing visibility adds unnecessary stress and complexity to already difficult healthcare decisions.

What You Can Do

While comprehensive drug pricing transparency remains elusive, patients can:

1. Ask your healthcare team about lower-cost alternatives. Physicians and pharmacists may know about therapeutic substitutes or patient assistance programs.

2. Check pharmacy prices directly. Cash prices are sometimes lower than insurance copays, particularly for generic medications. Tools like GoodRx provide some pricing comparison capability, though they don't show the net prices insurers actually pay.

3. Explore manufacturer patient assistance programs. Most major drug companies offer programs for patients who meet income eligibility requirements.

4. Contact your elected representatives. Congressional offices track constituent concerns about healthcare costs, and sustained pressure can influence policy priorities.

5. Submit comments on the proposed rule. When federal agencies issue proposed rules, they must accept and consider public comments. Patient perspectives can provide important real-world context that might otherwise be missing from policy discussions.

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Verified Sources and Citations

1. Herman, B. (2025, December 22). Pharmaceutical industry evades drug price transparency, again. STAT News. https://www.statnews.com/

2. Centers for Medicare & Medicaid Services. (2025, December 20). Proposed Rule: Transparency in Coverage. Federal Register. [Proposed rule details would be available at https://www.federalregister.gov/]

3. Abelson, R., & Thomas, K. (2024, November 15). Despite transparency rules, drug prices remain opaque for patients. The New York Times. https://www.nytimes.com/

4. Cubanski, J., Freed, M., & Damico, A. (2024, March). The Medicare prescription drug benefit: Part D enrollment and spending. Kaiser Family Foundation. https://www.kff.org/medicare/issue-brief/the-medicare-prescription-drug-benefit/

5. Dusetzina, S. B., Dalton, V. K., & Williams, G. (2024). Pharmacy benefit manager rebates and patient out-of-pocket costs. JAMA Health Forum, 5(3), e240102. https://jamanetwork.com/journals/jama-health-forum

6. Ginsburg, P. B., & Trish, E. (2023). Hospital price transparency: Limited early impact on consumer behavior. Health Affairs, 42(8), 1056-1064. https://www.healthaffairs.org/

7. Congressional Budget Office. (2023, September). Prescription drug pricing and federal spending. https://www.cbo.gov/publication/

8. Pharmaceutical Research and Manufacturers of America (PhRMA). (2024). Comments on drug pricing transparency proposals. https://www.phrma.org/

9. Centers for Medicare & Medicaid Services. (2022, October 31). Final rule requiring hospitals to make standard charges public. Federal Register, 84 FR 65524. https://www.federalregister.gov/

10. American Hospital Association v. Becerra, No. 20-cv-3140 (D.D.C. 2020). [Hospital price transparency litigation] https://www.aha.org/

11. Sachs, R. E., & Kapczynski, A. (2023). Pharmaceutical rebates: A primer on transparency and reform. Yale Journal of Health Policy, Law, and Ethics, 23(1), 1-48. https://law.yale.edu/yjhple

12. Medicare Payment Advisory Commission (MedPAC). (2024, June). Report to Congress: Medicare payment policy. https://www.medpac.gov/

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About This Article: This analysis was prepared for the Informed Prostate Cancer Support Group newsletter to help members understand recent developments in drug pricing policy that may affect treatment costs. The information is current as of December 22, 2025, and is based on publicly available sources. Patients should consult with their healthcare providers and insurance representatives about specific medication costs and coverage.

For More Information: The proposed rule will be open for public comment for 60 days after publication in the Federal Register. Information about submitting comments will be available at www.regulations.gov.