PBM Reform and Pharma Tariffs Could Pull Drug Affordability in Opposite Directions

 Guest Opinion by Paul Pruitt, Chief Growth Officer at SHARx

America is trying to accomplish several difficult healthcare goals at the same time: lower prescription drug costs, increase pharmacy benefit manager (PBM) transparency, strengthen domestic pharmaceutical manufacturing, and protect the drug supply chain. Each objective is defensible on its own. The challenge is making sure policies designed to achieve one goal do not undermine another.

That tension is becoming increasingly important for Alabama. According to 2026 employer coverage data, approximately 2.35 million Alabamians receive health insurance through an employer, with 59% of that coverage provided through self-funded plans. For a self-funded employer covering hundreds or thousands of members, even modest increases in prescription costs can quickly translate into higher plan spending, greater employee cost sharing, or pressure to reduce benefits elsewhere.

Alabama Is Already Changing the PBM Side of the Equation

Alabama has taken meaningful steps to address one part of the prescription drug system. The state’s Community Pharmacy Relief Act expanded oversight of pharmacy benefit managers (PBMs), including requirements that generally direct 100% of manufacturer rebates back to health plan clients unless the client chooses otherwise. The law also addresses spread pricing, pharmacy steering, and reimbursement practices. The Alabama Department of Insurance has also established a dedicated PBM Compliance Division to oversee the expanded requirements.

Those reforms reflect a broader national movement. The latest National Alliance of Healthcare Purchaser Coalitions survey found that 46% of employers were using a PBM outside CVS Caremark, Optum Rx, and Express Scripts, up from 37% a year earlier. Among employers still using one of the three largest PBMs, 56% were considering a change within three years.

Greater visibility allows plan sponsors to understand how PBMs are compensated, where pharmacy dollars go, and whether negotiated savings actually lower total costs. But improving one part of the system does not insulate purchasers from cost pressures emerging elsewhere.

Tariffs Add a New Variable to Drug Affordability

PBM reform addresses one set of prescription cost drivers, but employers pay for a system shaped by manufacturers, wholesalers, pharmacies, supply chains, and federal policy. Changes anywhere in that system can affect total pharmacy spending.

In April, the administration imposed a 100% tariff on certain imported patented pharmaceuticals and pharmaceutical ingredients, with a lower initial rate available to qualifying manufacturers pursuing approved U.S. onshoring plans. Generic drugs and their ingredients are currently excluded, although the administration has announced plans to begin tariffs on imported generics in 2028.

The objective is understandable. The United States has legitimate reasons to reduce dependence on overseas pharmaceutical manufacturing and strengthen supply-chain resilience. But policymakers also need to understand where additional costs ultimately land.

Even medicines manufactured domestically can rely on active pharmaceutical ingredients produced overseas. A recent peer-reviewed modeling study estimated that tariffs applied to imported ingredients used in U.S.-made generic drugs could raise prescription prices by an average of 10%, or $6.22 per prescription, under one modeled scenario.

These are projections, not observed price changes, but they demonstrate how interconnected pharmaceutical manufacturing has become. For employers, any additional cost moving through the supply chain has the potential to ultimately appear in total prescription spending.

Affordability Policy Cannot Be Designed in Silos

The central policy question is not whether PBM reform or domestic manufacturing is worthwhile. It is whether the entire system is being evaluated together.

Alabama policymakers are simultaneously trying to preserve independent pharmacy access, improve PBM accountability, protect employers and patients from unnecessary costs, and operate within federal policies designed to bring pharmaceutical manufacturing back to the United States. Those goals can reinforce one another, but only if policymakers understand how costs move through the system. Several principles can help.

·       Measure total net cost. Lower PBM fees or greater rebate transparency matter only if costs paid by employers and patients actually decline. Measuring net cost across the prescription journey provides a more complete picture than evaluating one component in isolation.

·       Evaluate supply chain consequences. Domestic manufacturing incentives should account for imported ingredients, production capacity, and potential cost increases before new expenses reach patients.

·       Protect competition and sourcing flexibility. Policy should preserve meaningful choices, including alternative sourcing pathways that can provide medications more affordably, rather than concentrating control elsewhere.

·       Keep patient affordability as the final scorecard. A policy can succeed technically while failing consumers if medication becomes more expensive or harder to access.

Alabama Has an Opportunity to Look at the Whole System

Prescription affordability cannot be solved by one intermediary, tariff, or regulation at a time. PBM transparency can reveal where pharmacy dollars go. Domestic manufacturing can strengthen supply security. Pharmacy protections can preserve local access. None guarantees affordability on its own.

Changes at one level can influence spending elsewhere, shifting costs rather than eliminating them. Alabama therefore has an opportunity to evaluate prescription drug policy as one connected ecosystem.

The question is whether these policies together produce lower net costs, stronger access, and a more resilient pharmaceutical system. If affordability improves in one part of the supply chain only to be lost somewhere else, patients and employers will never experience the reform they were promised.

Paul Pruitt is the Chief Growth Officer of SHARx and a key driver of the company’s rapid expansion. With experience across operations, finance, and benefits consulting, he began his career as COO and CFO at a boutique employee benefits firm and later specialized in self-funded health plans for a bank-owned agency.

Paul’s mission is shaped by personal experience: two of his children were diagnosed with a rare orphan disease, giving him a dual perspective as an industry expert and parent navigating high-cost therapies. This fuels his commitment to fair prescription pricing and high-touch member support.

Opinions do not reflect the views and opinions of ALPolitics.com. ALPolitics.com makes no claims nor assumes any responsibility for the information and opinions expressed above.