The U.S. PBM industry as we know it should have ended in August 2018, when both CVS and Express Scripts finally publicly admitted the 15-year old, simple, but secretive “fee” collusion scheme with pharma Now Fueling a national drug pricing crisis.

August 2018 should have been the end of the U.S. PBM industry as we know it, but nothing happened.

Under intensive scrutiny about drug pricing, within a couple of days of each other that month, the senior managements of both CVS and Express Scripts made cataclysmic public admissions for the first time in their quarterly conference calls with expert Wall Street analysts.

Both CVS and Express Scripts publicly admitted for the first that less than 10% of their skyrocketing profits now come from keeping a share of manufacturer rebates (i.e., discounts negotiated for clients and patients).

As a physician and a 30-year ethical professional healthcare analyst, way back in 2013 now, I discovered and definitively verified (with many directly involved insider witnesses) the awful truth  about “rebates”.

I then quickly relayed my shocking findings to the Justice Department (DOJ) in my first whistleblower case regarding obvious and severe price collusion in the U.S. multiple sclerosis (MS) drug market.

When I filed my first qui tam whistleblower case in January 2014, with DOJ’s encouragement, U.S MS drug prices had already uniformly increased five-fold to $50,000/person; they are now $100,000/person, nearly 10 times the price of anywhere else. All due to a simple “fee” scheme that I promptly relayed to the government long  ago, as a gravely concerned physician and an expert financial professional.

Here is a link to a graph of U.S. versus European M.S. prices over the past 15 years, from my whistleblower Court documents: /wp-content/uploads/2019/12/RIComplaintUSvEUMSprices.pdf

They say a picture is worth a thousand words. In my view, that is an understatement here.

In early August 2018, more than five years later, two dominant health insurer/PBMs finally publicly admitted  the truth about “rebates” for the first time.

From this website, you know that PBMs used to get virtually ALL their profits from rebates, but secretly switched  to pharma “fees” in collusion with drug companies when Medicare Part D arrived.

Now PBMs keep all the “fees” from pharma (and never talk about them) and pass on the typically small or non-existent rebates to clients (and talk about them endlessly).

Read about the secret profit transition from “rebates” to “fees” at Medco (the largest PBM before it merged with Express Scripts in 2012, with pharma support), from its own SEC 2003-2011 financial statements, in the whistleblower Court documents at this link: /wp-content/uploads/2019/12/Medco.pdf

However, with manufacturer rebates suddenly out of the picture, neither CVS’ nor Express Scripts’ management made any comment on the August 2018 conference calls about where their surging profits are coming from.

Here is a link to the CVS/Express Scripts August 2018 public statements and related discussion from my whistleblower Court documents: /wp-content/uploads/2019/12/SDNYOppESRXCVSRebateCommentary111918.pdf

I cannot overstate the immensity of these sudden and unexpected public admissions about “rebates” by CVS and Express Scripts in early August 2018.  

Up until these August 2018 conference calls, the cadre of experienced Wall Street analysts following these companies had proclaimed for decades that PBMs made most, if not all, of their brand drug profits from rebates.

These shocking admissions by CVS and Express Scripts should have been the equivalent of a nuclear bomb for the U.S. PBM industry.

In a legitimate market, these public admissions by CVS and Express Scripts would have set off an avalanche of questions to their senior executives on the August 2018 conference calls from the Wall Street analysts.

Actually,  just one legitimate question could have done it.

“If not rebates as we have all pronounced for decades, then how  are you making your huge profits on all these brand drugs with massive price increases?”

Of course, that did not happen. All the Wall Street analysts ignored the elephant in the room and remained silent.

And where do the meteoric brand drug profits for CVS/Aetna, Cigna/Express Scripts, UnitedHealth/Optum and Humana really come from?

You guessed it. Collusive “fees” from pharma companies directly tied to massive U.S. brand drug prices and price increases, via secretive percent of “sticker” price national contracts.

Rebates or “fees” , both from pharma and both tied to massive brand “list” prices, are the only two options for real health insurer/PBM brand drug profits. Everything else is peanuts.

As Monty Hall from “Let’s Make a Deal” fame might say:

“Well, the PBM profits are behind either Door #1 or Door #2, but Door #1 just disappeared.


“Well then Monty, I’ll take Door #2.”

“Congratulations you have won the grand prize for the day!”

Sorry for the bad humor, but it may help drive home the remarkable simplicity of an obvious and ongoing scheme that has already caused nearly $200 billion in financial abuse across this nation and is harming many of our most severely ill and vulnerable fellow citizens.

In reality, there is nothing funny about this at all.

To this date, I am not aware that any Wall Street analyst has ever publicly asked a PBM or a pharma executive a single question about these pharma “fees”.  

Of course, I can’t really blame the Wall Street analysts and others, since the Department of Justice ignored the cataclysmic CVS/Express Scripts public “rebate” admissions as well and then proceeded to seek last minute dismissal of my whistleblower cases to prevent investigation.

However, keeping such an obvious open secret must be getting tougher for some.  

After all, it is now a very straightforward task of “Follow the Money” , but with only one path.

As they say, the truth can set you free, not to mention help stop staggering harm to patients, families and taxpayers across this country.

I would greatly appreciate your sharing this blog post and the website. Thanks for your interest.  

I remain hopeful that other experienced healthcare professionals will eventually help end this abuse.

Regardless, the main goal of my efforts and this website is to inform and engage the broader American public.

Please share this with any and all. We are all being harmed and are in this together.


I would be glad to speak with any interested party. I can be easily reached by email at

John R. Borzilleri, M.D.

About The Author

2 thoughts on “The U.S. PBM industry as we know it should have ended in August 2018, when both CVS and Express Scripts finally publicly admitted the 15-year old, simple, but secretive “fee” collusion scheme with pharma Now Fueling a national drug pricing crisis.”

  1. The PBMs are also making their profit by stealing from pharmacies. They don’t pay us for our work, they send us DIR bills up to 5 years after a transaction, and they pay themselves up to 5 times more to fill the same prescription by their mail order pharmacy. The profession of pharmacy is in danger. Stores are closing, hours are being cut. The projected growth for my profession is 0% for the next 10 years! The PBMs need to start answering questions and need to be transparent!

    1. John Borzilleri

      thanks for your comment. I could not agree more. Please share with any and all pharmacists and other health professionals you know. John

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