The Trump administration said it plans to eliminate kickbacks involving pharmacy benefit managers (PBMs) as part of its goal to lower health insurance for Americans.
The framework, dubbed the “Great Healthcare Plan,” is aimed at lowering drug prices and insurance premiums while holding large insurance companies accountable and increasing price transparency.
President Donald Trump on Thursday urged Congress to pass the framework into law “without delay.”
“Have to do it right now so that we can get immediate relief to the American people,” Trump said in a video message announcing the plan.
The administration said in the proposal that these PBMs – which it describes as “large brokerage middlemen” – are to blame for “deceptively” raising the cost of insurance premiums. Trump’s proposal to eliminate kickbacks paid by these PBMs would essentially limit how much money they make and eventually weaken their influence. It’s not as drastic as the president’s earlier threat to eliminate them completely.
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PBMs have long been a target of criticism from both the healthcare industry and presidential administrations. They are referred to in the industry as “middlemen” because they act as the intermediary between drug manufacturers, insurers and pharmacies.
PBMs negotiate with drug manufacturers and pharmacies to decide how much medicines cost, which drugs people can get and which pharmacies are part of their network, according to the Commonwealth Fund.
This means that they essentially decide how much insurers pay for medicines and how much pharmacies get paid. PBMs can also directly reimburse retail pharmacies on behalf of an insurer. Public and private insurers, including Medicaid, Medicare Advantage plans and employer-sponsored insurance plans, use these services.
In May 2025, Trump stated that he would completely cut PBMs out of the pharmaceutical industry. He made the comment while announcing his plans to tackle prescription drug prices. Trump said at the time that he wanted to ensure the U.S. begins paying the “lowest price there is in the world” for medications.
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“We’re going to totally cut out the famous middleman. Nobody knows who they are… I’ve been hearing the term for 25 years,” Trump said during a May press conference at the White House. “We’re going to cut out the middleman and facilitate the direct sale of drugs at the most favored national price directly to the American citizen. So we’re cutting out the middleman. It’s so important.”
Trump didn’t disclose at the time how he plans to cut out PBMs. But some pharmaceutical giants are in agreement that the role of these middlemen needs to change, with Eli Lilly previously telling FOX Business that the only way to lower prices for U.S. consumers is if “intermediaries take less for themselves.”
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Independent pharmacists often claim that pharmacy benefit managers are to blame for their financial struggles as they reduce reimbursement rates for medications, making it difficult to cover operational costs.
However, the Pharmaceutical Care Management Association, the national trade association representing America’s PBMs, argued that “PBMs are the only ones whose mission is to lower prescription drug costs and the only check against drug companies’ unlimited pricing power, negotiating lower costs where competition exists.”
However, targeting PBMS was only part of his plans to tackle surging health insurance costs.
Under the proposal, the administration also said that it would halt efforts to send big insurance companies billions in extra taxpayer-funded subsidy payments and re-direct it to eligible Americans to allow them to buy the health insurance of their choice.
It would also fund a cost-sharing reduction program for healthcare plans which the administration said would save taxpayers at least $36 billion and reduce the most common Obamacare plan premiums by over 10%, citing figures from the Congressional Budget Office.
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