This article examines pharmacy benefit manager (PBM) "rebate walls" and the impact on the United States drug supply chain.  The Federal Trade Commission head, Commissioner Rohit Chopra, recently issued a report on PBM rebate walls, and this can be seen as a pivotal industry moment.  Federal agencies and plan sponsors—the clients of PBMs—are beginning to explore perverse PBM incentives and are waking up to abusive PBM practices.  One of the Commissioner's important is that "PBMs are incentivized to select higher list price drugs instead of lower list price drugs for their formularies in order to collect a higher rebate… Because rebating practices from drug companies to PBMs can make it more difficult for new, lower-priced drugs to succeed in the market place, PBMs may actually be causing drug prices to increase, rather than decrease."  This so called "rebate wall" is, among other things, driving up drug spending and hindering patients' access to their medications.

Indeed, gross-to-net bubble (i.e., difference in dollars between gross sales of brand name drugs' list prices and their net sales prices after deducting rebates and other discounts) climbed to $175 billion in 2019 and is estimated to exceed $187 billion.[2]  The growing trend in the gross-to-net bubble is directly associated with the current structure of the pharmacy industry.  More than 77% of prescription claims in the country are processed by the top three , which have strategically created a complex web of vertically integrated plan sponsors, rebate aggregators, specialty pharmacies, and provider services.