Commentary: Federal Trade Commission May Finally Bring Down the Hammer on Pharmacy Benefit Managers

by Nate Scherer


Amidst rising prescription drug prices, consumers may finally be getting some much-needed relief if the Federal Trade Commission (FTC) follows through with a recent pledge to investigate Pharmacy Benefit Managers (PBMs) for anticompetitive practices.

On June 16th the Federal Trade Commission (FTC) announced that it would look into claims that drug manufacturers are providing PBMs, and other intermediaries large rebates in exchange for favorable agreements that place their drugs ahead of low-cost generics and biosimilars on drug formularies. PBMs stand accused of withholding information critical to allowing consumers to make sound financial decisions and prescription selections.

The announcement specifically cites “insulin” as an example of a lifesaving product that has been negatively impacted by “high rebates and fees.” The Commission notes that between 2009 and 2017, out-of-pocket costs for both the insured and uninsured “nearly tripled.” Rebate and fee agreements are believed to be responsible for at least some of this increase because PBMs allegedly “steer patients to higher-cost drugs” and pocket generated savings. Other prescription drugs have experienced similar increases.

With this knowledge, the FTC has concluded that such PBM and manufacture agreements may have actually raised drug prices for consumers rather than lowering them, as was originally intended. As a result, the Commission has cited its legal authority under the Robinson-Patman Act and the Sherman Antitrust Act to take action in the interest of consumers.

The announcement, while introducing “no new enforcement actions,” may none-the-less foreshadow future action against companies that it determines have violated provisions of antitrust legislation. It also comes on the heels of a separate announcement made on June 7th that the agency would be probing CVS Caremark, Express Scripts, OptumRx, and three other large PBMs, over issues of prescription drug accessibility and affordability. That announcement issued under “Section 6(b) of the FTC Act” compels PBMs to “provide information and records regarding their business practices.” The agency hopes this information can be used to conduct studies and shed light on some potentially more unscrupulous PBM practices that have attracted scrutiny in recent years.

Together, these announcements demonstrate a renewed commitment by the FTC to investigate prescription drug middlemen who have allegedly for years enriched themselves at the expense of consumers who are left with unnecessarily high drug prices. Prescription drugs can and should be affordable for the average American, but more action is needed. The FTCs announcements provide a good first step.

– – –

Nate Scherer is a Policy Analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us on www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal.
Photo “Pharmacist Consult” by Oregon State University. CC BY-SA 2.0.




Content created by RealClearHealth is available without charge to any eligible news publisher. For republishing terms, please contact [email protected].

Related posts