As state legislatures across the country rush to reform Pharmacy Benefit Managers, driven by the assumption that eliminating a middleman is always beneficial, an uncomfortable truth is being overlooked. Broad, one-size-fits-all PBM legislation, when written without careful consideration of federal veterans’ healthcare programs, can unintentionally harm the very people it is supposed to protect. For veterans who rely on TRICARE or the Department of Veterans Affairs for their prescriptions, well-meaning reforms at the state level can disrupt access, increase costs, and weaken a system designed to work uniformly nationwide.
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Imagine you are a veteran enrolled in TRICARE and your doctor prescribes a new blood pressure medication. You walk into your local pharmacy, show your military ID, and pay a modest copay instead of the full cash price. The interaction is quick and unremarkable. From your perspective, it feels simple.
What you do not see is the machinery that made that moment possible.
Long before you reached the counter, a Pharmacy Benefit Manager, or PBM, helped determine which medications TRICARE would cover, negotiated prices with drug manufacturers, and set reimbursement terms with pharmacies nationwide. When the pharmacist submitted your prescription, the PBM verified coverage, applied the copay, paid the pharmacy, and updated records so doctors and the health plan could track refills and watch for safety issues. To the veteran, it looks like a swipe of a card. In reality, the PBM is coordinating prices, safety checks, and delivery so a national veterans’ healthcare system can function as one program rather than fifty different ones.
As states debate PBM reform, much of the conversation assumes a shared understanding of what PBMs do. That assumption is flawed, particularly when the discussion turns to federal healthcare programs serving veterans and military families.
PBMs are not pharmacies, and they are not drug manufacturers. They are administrative organizations that manage prescription drug benefits for health plans. Their role is to coordinate how prescriptions are priced, filled, delivered, and monitored across large populations. In federal systems like TRICARE and the VA pharmacy program, that coordination is essential. It allows veterans to maintain consistent access to medications regardless of where they live or how often military life has required them to relocate.
TRICARE and the VA were designed as national systems. A veteran in rural Tennessee is meant to operate under the same pharmacy framework as a veteran in California or Arizona. PBMs support that goal by negotiating nationwide contracts, maintaining pharmacy networks that cross state lines, operating mail-order systems for long-term medications, and providing oversight that helps prevent fraud, misuse, and dangerous drug interactions. Without this infrastructure, veterans’ pharmacy benefits would quickly fracture, leading to higher costs, uneven access, and inconsistent care.
The problem is that most state PBM legislation was written with commercial insurance markets in mind. These laws often focus on reimbursement formulas, pharmacy network rules, mail-order restrictions, or limits on how plans can encourage patients to use certain pharmacies. While those debates may be appropriate for private insurance, they become risky when applied to federally governed programs like TRICARE and the VA.
Federal veterans’ health programs operate under federal law and federal contracts. State rules that restrict network design or limit mail-order delivery can directly interfere with how those programs function nationwide. The consequences are not theoretical. When PBMs lose flexibility, pharmacy networks can shrink, negotiated savings can erode, and mail-order options can disappear. For veterans, this can mean fewer participating pharmacies, higher out-of-pocket costs, or delays in receiving medications they depend on every day.
These impacts fall hardest on veterans who already face barriers to care. For veterans living in rural communities or pharmacy deserts, mail-order prescriptions are often a necessity, not a convenience. The Department of Veterans Affairs already fills roughly 80 percent of outpatient prescriptions through its consolidated mail-order pharmacies, demonstrating how centralized PBM infrastructure can overcome distance and transportation barriers for rural veterans. Many veterans also live with mobility limitations, transportation challenges, or service-connected disabilities that make frequent trips to a retail pharmacy difficult or impossible. Mail-order systems function at scale precisely because PBMs are permitted to manage them efficiently across state lines. Restricting that flexibility does not expand choice, it narrows it.
The same logic applies to preferred pharmacy networks. Steering patients toward pharmacies that agree to lower prices and quality standards allows federal programs to balance access with affordability. When states prohibit this practice or force inclusion of every pharmacy regardless of contract terms, the economics that sustain these networks weaken. The result is fewer viable options for veterans.
Veterans’ healthcare benefits are federally guaranteed for a reason. Access to medication should not depend on which state legislature is in session or which regulatory approach is in fashion. Federal preemption exists to protect national defense and veterans’ healthcare programs from being reshaped piecemeal by state law.
PBMs are not beyond criticism. Oversight and transparency matter. Reform can be constructive when it is informed and targeted. But reform that fails to distinguish between commercial insurance markets and federal veterans’ healthcare systems risks unintended harm.
For veterans, access to prescriptions is not an abstract policy debate. It is a daily requirement tied directly to health, stability, and quality of life. PBMs, when properly structured within federal systems, are part of the infrastructure that keeps that promise intact. Reform should strengthen that foundation, not quietly weaken it.
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