With PBMs on the hot seat, Pharmas may be tempted to crow. They shouldn’t.

The title of the FTC’s interim report on PBM practices, “Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies,” says it all: these organizations are once again on the hot seat. Two years in the making, the 71-page report charts - in exquisite detail - a history of vertical integration that has resulted in the following scenario:

“The dominant PBMs can often exercise significant control over which drugs are available, at what price, and which pharmacies patients can use to access their prescribed medications.”

That isn’t exactly news to most of us. And it’s a finding that, two years ago, wasn’t enough to spur Congressional reform. Has the tide finally turned?

Not obviously.

Health plans and self-insured employers haven’t exactly rushed to fire their PBMs. Why? Presumably because these entities believe PBMs are saving them substantial money on their drug costs, something that does benefit Americans in the form of lower health premiums.

And while the FTC report is extremely critical, it’s worth noting that the Commission, run by the anything-but-timid Lina Khan, did not initiate an anti-trust lawsuit. (It’s possible that a coup de grace will come when the final report is released.)

Thus, while pharmas and independent pharmacies will use this report (plus recent exposés by the NYT and the WSJ ) to hate, hate, hate on PBMs, those same PBMs are likely to channel their inner T. Swift and shake it off.

Pharma companies should be careful to participate in PBM schadenfreude. Drugmakers are far more frequently villified than payers, in part because wholesale prices are publicly disclosed and easy to rail against.

Indeed, the positive public relations bump that?drugmakers enjoyed at the height of the pandemic has steadily eroded since 2022, according to a pharma corporate reputation report released in May by PatientView . Recent pharma-sponsored challenges to the IRA, which polls suggest remains popular with a majority of Americans, could further tarnish the industry’s image.

Moreover, while this recent FTC report excoriates PBMs, drugmakers didn’t come off scot-free. The final lines of the report sound a warning bell not just for PBMs but for drugmakers, too:

“While this Interim Report principally focuses on the impact of these changing market dynamics on the operation and vitality of the nation’s pharmacies, we also share initial evidence about PBM and brand pharmaceutical rebating practices that urgently warrant further scrutiny and potential regulation.”

#FTC #pharmaceutical #PBM #drugpricing #reform

cc Roger Longman Jeff Berkowitz Rob O'Brien Ryan Walsh Susan Raiola Jane F. Barlow, MD, MPH, MBA Julia Murphy Morgan Robinson