Rhode Island’s independent pharmacy owners joined forces today to launch a grass roots campaign to help secure long-sought pharmacy benefit manager (PBM) reform in the Rhode Island General Assembly. The campaign, kicked off at Suburban Pharmacy in Warwick, seeks to leverage a lawsuit filed last May by Attorney General Peter Neronha against CVS Caremark, Express Scripts and Optum Rx, the nation’s three largest PBMs.

The AG’s lawsuit alleges that these companies engaged in “coercive, exploitative, collusive, abusive, deceptive, predatory, restrictive, and exclusionary” conduct by taking advantage of their significant power in the PBM market to force independent pharmacies to accept unfair contractual terms”.  The lawsuit also alleges that the PBM Defendants’ conduct “denies consumers free and fair access to the pharmacy of their choice.”

The Federal Trade Commission secured a landmark settlement with one of the nation’s largest pharmacy benefit managers (“PBMs”), Express Scripts, Inc., and its affiliated entities (collectively “ESI”). The settlement requires ESI to adopt fundamental changes to its business practices that increase transparency, are expected to drive down patients’ out-of-pocket costs for drugs like insulin by up to $7 billion over 10 years, bring millions of dollars in new revenue to community pharmacies each year, and advance the Trump Administration’s key healthcare priorities.

The FTC’s enforcement action against ESI, as well as Caremark Rx and OptumRx, alleges that the PBMs created a system that artificially drove up the list prices of drugs by preferencing rebates. The complaint alleges that this system pushed insulin manufacturers, among others, to compete for preferred formulary coverage based on the size of rebates off the list price rather than net price, which ultimately benefitted the PBMs, including ESI, which keep a portion of the inflated rebates. According to the FTC’s complaint, the inflated list prices hurt patients whose out-of-pocket payments like copays and coinsurance are tied to the list price of the drug.

“Community pharmacy owners are the canary in the coal mine when it comes to federal or state prescription programs,” said NCPA CEO B. Douglas Hoey, pharmacist, MBA. “For years, our members and we have been telling anyone who will listen — and worked to convince others who wouldn’t listen — about the PBM-insurer conglomerates gobbling up market share, driving up drug costs, crushing small-business pharmacies, and making it more difficult for patients to receive the care they need. We’ve been warning that unless action is taken, more pharmacies will close, and more pharmacy deserts will grow. Unfortunately, as time passed, we were proven correct and finally, there is action to help reverse these trends.

Providence Journal Op-Ed by Suburban Pharmacy Owner Nick Shanos

I love being a community pharmacist because I can really get to know my patients and provide personalized medication counseling. I share my love of pharmacy with immediate and close family members; my brother Zaheer Akbar, recently opened Park Avenue Pharmacy in Cranston; my cousin Hursh Patel, a pharmacist, recently opened Coventry Pharmacy, and another cousin, Hasan Iqabl, also a pharmacist, helps me manage Park Square Pharmacy.

Beyond a shared love of the personal service an independent pharmacy can provide, we also share a common threat. Pharmacy Benefit Managers, who act as middlemen between health plans, pharmaceutical manufacturers and pharmacies, have routinely forced independent pharmacy owners like me in Rhode Island to accept reimbursement rates below cost for certain prescriptions, a practice that has driven more than a dozen independent pharmacies in Rhode Island out of business over the past 20 years.

In 2018, my wife and I poured our life savings into opening Matt’s Local Pharmacy in Middletown. I’d previously worked as a pharmacist for a major chain drug store and also worked in a hospital pharmacy but I wanted to own my own pharmacy so I could provide more personalized service to my patients. I’ve been able to do just that over the past eight-plus years, but I’ve also faced a serious challenge that threatens the very existence of my pharmacy.

Pharmacy Benefit Managers (PBMs), who act as middlemen between health plans, pharmaceutical manufacturers and pharmacies, have routinely forced me and other independent pharmacy owners in Rhode Island to accept reimbursement rates below cost for certain prescriptions, a practice that has driven more than a dozen independent pharmacies in Rhode Island out of business over the past 20 years.

Thankfully, our Attorney General, Peter Neronha, is not afraid to challenge CVS Caremark and other major PBMs for their unfair trade practices. On May 27, 2025, the Attorney General filed a lawsuit against CVS Caremark, Express Scripts and Optum Rx.

Attorney General Neronha filed a lawsuit in Providence County Superior Court against the country’s largest Pharmacy Benefit Managers (CVS Caremark, Express Scripts, and Optum) and their affiliated Group Purchasing Organizations (Zinc, Ascent Health Services, Emisar Pharma Services) for their role in unfairly and deceptively increasing the costs of prescription drugs, limiting care choices for Rhode Islanders, and harming local businesses.

The complaint alleges that the defendant Pharmacy Benefit Managers (PBMs) and Group Purchasing Organizations (GPOs) deceive consumers by branding themselves as a source of cost-savings when in fact they profit directly from cost increases. These defendants act as intermediaries between health plans and other entities in the drug distribution chain, such as prescription drug manufacturers and pharmacies. Often secretive and unknown to consumers, PBMs and GPOs exploit the complex scheme of pricing and payment for prescription drugs, and they take a cut of ever-increasing drug prices at every step of the way. They may also make decisions about formularies – the lists of drugs that are available to plan enrollees – that unfairly restrict access to safe and effective medications.