The FTC Released a Scathing Interim Report on PBMs. What’s Next?
About two years after launching an investigation into pharmacy benefit managers, the Federal Trade Commission has finally released some of its findings — and they don’t bode well for the prescription drug middlemen.
Last week’s interim report explains how concentrated the PBM market has become, allowing the companies to generate outsize profits while patients and independent pharmacies struggle. The six largest PBMs — CVS Caremark , Express Scripts , Optum Rx , Humana Pharmacy Solutions , MedImpact and Prime Therapeutics — manage nearly 95% of all prescriptions filled in the U.S.
“The FTC’s interim report lays out how dominant pharmacy benefit managers can hike the cost of drugs — including overcharging patients for cancer drugs,” said FTC Chair Lina M. Khan in a statement. “The report also details how PBMs can squeeze independent pharmacies that many Americans — especially those in rural communities — depend on for essential care. The FTC will continue to use all our tools and authorities to scrutinize dominant players across healthcare markets and ensure that Americans can access affordable healthcare.”
Shortly after the report was released, the Wall Street Journal reported that the FTC is preparing to sue CVS Caremark, Express Scripts and Optum Rx over insulin prices. The lawsuit is related to the rebates PBMs broker with drug manufacturers, and there have been concerns of PBMs making secret agreements to prioritize insulin products offering the highest rebates, rather than those that would cost patients the least. The FTC declined to comment on the rumors and whether the reported lawsuit is a result of the investigation.
However, it is important to note that the release of the report wasn’t unanimous. The FTC voted 4-1 to release the interim report, with Commissioner Melissa Holyoak voting no. In her dissenting statement , Holyoak said the report fails “to meet the standards of economic rigor expected of Commission reports more generally” and fails to examine “how PBM practices affect consumer prices.”
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The FTC plans to release a final report but doesn’t have a set timeline. It noted that some of the PBMs haven’t fully complied with the investigation and haven’t completed their required submissions to the FTC. If they don’t comply, the FTC can take them to district court.
So what’s in store for PBMs? Experts and most affected groups want to see some sort of legislation that will promote transparency.?
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