Banning PBMs Won’t Fix Third-Party Healthcare
My latest article on X.
Hello Friends!
Check out my latest article on X. What we see on the surface isn’t always the truth, which is too often the case regarding healthcare. I argue that states should NOT be banning pharmacy benefit managers because it misses the true problems in the healthcare system. Please read my article below and share what you think.
In a first-of-its-kind move, Arkansas Gov. Sarah Huckabee Sanders recently signed a law barring pharmacy benefit managers (PBMs) from owning or operating pharmacies in the state starting Jan. 1, 2026. While the governor touted it as a win for patients and independent pharmacists, this policy is far more likely to backfire, shutting down access to medications in many communities, eliminating jobs, and injecting more uncertainty into a health care system already burdened by decades of government interference.
Unlike previous state efforts focused on PBM reimbursement rules or transparency mandates, Arkansas’ law draws a bright regulatory line. It prohibits PBMs from owning, managing, or controlling retail pharmacies, regardless of whether patients benefit from their integrated services. The law empowers the Arkansas Board of Pharmacy to revoke licenses held by PBMs or affiliated companies. Although it includes narrow carveouts for pharmacies serving only their employees or distributing rare drugs, the structural goal is clear: forcibly splitting apart the market’s attempt to deliver coordinated care.
Arkansas is not alone in this approach; Louisiana’s majority Republican state lawmakers, including Gov. Jeff Landry, tried to jam a PBM ban into the waning days of the legislative session. While a bill to do so passed the House, it died in the Senate, and there’s talk of a potential special session on it.
But popular doesn’t always mean correct, and governors should not follow Govs'. Landry and Sanders into confusing symptoms for the cause. I have noted how PBMs didn’t create America’s broken, third-party healthcare system. In fact, they may be one of the few market-based responses to it.
For nearly a century, federal and state governments have distorted the health care market with price controls, subsidies, and third-party payers that disconnect patients from prices. PBMs arose to negotiate with manufacturers, promote generics, and inject some semblance of price discipline into an otherwise dysfunctional system.
State-level bans treat PBMs like monopolists when, in fact, they are trying to navigate a non-market system that the government created. This is the wrong diagnosis and the wrong cure. California Gov. Gavin Newsom has focused efforts on transparency of PBMs, but that shouldn’t include new licenses or other regulations.
Since CVS Health has a PBM integrated into its overarching business, the Arkansas law will force it to close 23 pharmacy locations, eliminating nearly 500 jobs nationwide. More importantly, patients — especially those in rural areas without reliable transportation — may find it harder to access prescriptions.
When you remove options, you don’t increase competition; you reduce it. That means fewer choices, longer wait times, and potentially higher prices. Ironically, Arkansas’ law could raise costs for the very people it claims to protect, and Louisiana’s could be even more problematic, with over 100 stores threatening to close and 2,700 jobs at stake.
Of course, lawmakers know all of this. That’s why in Arkansas, they carved out an exemption for pharmacies that serve only their employees — conveniently protecting Arkansas-based Walmart, one of the largest employers in the state, while forcing competitors to restructure or leave. If this law weren’t harmful to patients, they wouldn’t have needed to pick winners and shield them from the damage.
As Dr. Deane Waldman and I explain in our book, Empower Patients: Two Doctors’ Cure for Healthcare, America doesn’t have a free-market health care system — and hasn’t for a long time. It’s a government-dominated model where third-party payers and regulators dictate prices and services while sidelining the most important medical relationship: between patients and doctors. Every time politicians layer on more rules, they make it harder for the market to function and for patients to make real choices.
Real reform doesn’t mean banning PBMs. It means unleashing competition by streamlining FDA approval processes for generics and biosimilars, removing barriers to entry for innovative care models, and ending the outdated Medicaid and Medicare structures that prioritize paperwork and spending over results and outcomes.
Govs. Sanders and Landry deserve credit for wanting to help. But their solution is a step in the wrong direction. It reinforces the false narrative that more government micromanagement, like banning PBMs, is the answer, when in reality, too much government is the reason we’re in this mess.
Vance Ginn, Ph.D., is president of Ginn Economic Consulting, host of the Let People Prosper Show, former chief economist of the first Trump White House's OMB, and co-author with Dr. Deane Waldman Ginn of the book “Empower Patients – Two Doctors’ Cure for Healthcare.” Follow him on X.com at @VanceGinn.