By Josh Dawsey, Kristina Peterson and Maggie Severns

When President Trump signed an executive order this month to try to reduce drug prices, the pharmaceutical industry scored a big win.

Within 90 days, the order said, Trump's staff should put together a report "re-evaluating the role of middlemen," who have been the target of one of the most sweeping and expensive lobbying campaigns in recent years.

Trump's second term has upended the business of K Street, with many industries feeling left in the cold. An exception: the drug industry's campaign against so-called middlemen, or pharmacy-benefit managers, such as those owned by CVS Health and UnitedHealth Group, which manage prescription-drug benefits for health insurers.

Drugmakers spent a record $31 million to lobby in Washington last year, and about $13 million in the first quarter of 2025, according to public filings. Millions more went to donations to political groups and ads, many of which blamed benefit managers for the high price of drugs.

Last year, executives at the drug industry trade group PhRMA told the group's lobbyists that taking on the firms, known as PBMs, was a top priority in 2025, a lobbyist who attended the meeting said. Drug executives spent much of their time at a million-dollar dinner with Trump urging him to focus his criticism on benefit managers, according to people familiar with the dinner. They have repeatedly talked to Trump and his top aides in recent months, and some are slated to be in the Oval Office on Wednesday.

"Pharmaceutical companies have been pretty successful in shifting a disproportionate amount of blame to the PBMs," said Steve Knievel, a health-policy expert with Public Citizen, a nonprofit consumer-advocacy group.

Rising healthcare costs have triggered a battle within the industry over who is to blame. Drugmakers argue that the middlemen are at fault and profit from higher prices. The managers in turn say that pharmaceutical companies have set the list prices for drugs far too high, and that they have actually won billions of dollars in savings thanks to their efforts.

A spokesman for PhRMA said the group follows all disclosure rules and laws, and that the scrutiny of the managers was well-deserved. The firms "reduce access for patients while taking as much as 80% of the cost of medicines," PhRMA's senior vice president, Alex Schriver, said.

Drug companies have spent big money "to sow confusion and create diversions from the truth," said Katie Payne, senior vice president at the Pharmaceutical Care Management Association, a trade group for benefit managers. She added that if drug companies lowered their prices, consumers would pay less.

Trump's drug-pricing executive order also provided other wins for pharmaceutical companies. Among them: a delay in the start date for some Medicare price negotiations. Trump's plan directs his administration to work with Congress to change the timing of the price negotiations for most pills and begin them in 13 years instead of nine, as had been previously mandated.

Corporate sponsorships

PhRMA's targeting of middlemen predates the Trump administration and has taken several forms, including sending money to minority healthcare nonprofits, some of which then publicly attacked benefit managers. The group nets about half a billion dollars each year and gives money to more than a hundred nonprofits.

In 2022, for example, the group contributed $25,000 to MANA, A National Latina Organization, a nonprofit advocating for Latina women, and $270,000 to its political arm, the MANA Action Fund, as well as another $25,000 to the main nonprofit in 2023, the most recent year for which tax records are available. MANA led a coalition of dozens of groups called the Health Equity Collaborative, which was critical of PBMs in reports and blog posts, saying they are "at the center of this affordability crisis."

Amy Hinojosa, chief executive of MANA, said high healthcare costs create a burden for Latina women. "We all have to pay our bills so we do have corporate sponsorships," but those don't dictate the group's principles, she said.

Those same years PhRMA gave $50,000 to a group called Black, Gifted & Whole, which describes itself as a "movement dedicated to transforming the collective narrative of Black Queer men." The group's CEO, Guy Anthony, wrote op-eds calling for changes to the system to curb "abuses" by benefit managers. "As a Black queer man living with HIV, it's fair to say that I take special interest in lawmakers' attempts to lower drug prices," he wrote in one in 2022. Anthony didn't respond to a request for comment.

PhRMA also gave more than $400,000 in those years to the National Hispanic Council on Aging and the National Minority Quality Forum, which released a poll in 2022 that found that nearly three-quarters of voters of color would support policies requiring benefit managers to pass on rebates or discounts on drug prices to patients. The groups, which didn't disclose the donations with the poll, didn't respond to a request for comment.

PhRMA's money has gone to both liberal and conservative groups. It gave millions to the Republican American Action Network, and contributed $183,000 to American Commitment, a free-market advocacy group.

American Commitment launched a " Commitment to Seniors" paid media campaign last November urging Congress to rein in pharmacy-benefit managers. The group's leader, Phil Kerpen, said in a statement the group "never deviates from free-market principles based on contributions."

The pharmaceutical industry has also sponsored influential media newsletters, parties and other events in Washington, including around last week's White House Correspondents dinner. PhRMA's ads pop up in Washington's main newsletter, Politico Playbook, popular news outlets Axios and Punchbowl News, and the New York Times's flagship "Daily" podcast. "When middlemen own it all, you lose," one ad says.

The group also gave $1 million to Trump's inauguration, and several individual companies gave $1 million each, filings show, totaling more than $5 million for the industry to the inaugural. The industry also contributed to the president's private political committee, people familiar with the gifts said.

The group retained a record 201 lobbyists last year, according to OpenSecrets, a nonprofit that tracks money in politics. The industry will have to disclose its 2024 spending in a tax form later this year.

The benefit managers' association also spent close to $18 million in 2024 -- more than double what it spent just two years ago, according to public records. That group also gave $1 million to Trump's inauguration, as did another group aligned with the benefit managers called Americans for Pharma Reform.

Benefit managers and insurers are also trying other tactics. UnitedHealth Group's CEO announced in January that the company's PBM subsidiary will shift drug rebates it negotiates back to consumers by 2028, saying it will show that drug companies themselves are to blame for high drug prices.

But when executives from the benefit managers had dinner with Trump last year, they were weeks behind the pharmaceutical industry.

Some longtime Washington lobbyists have been amazed at the flood of spending by drugmakers in Washington, a place where industries frequently spend big.

"There are very few people who can turn these complicated issues like PBMs into good messaging," said Sam Geduldig, a prominent Republican lobbyist. "They're trying it all out," he said.

Write to Josh Dawsey at Joshua.Dawsey@WSJ.com, Kristina Peterson at kristina.peterson@wsj.com and Maggie Severns at maggie.severns@wsj.com

(END) Dow Jones Newswires

April 30, 2025 05:00 ET (09:00 GMT)

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