A Federal Trade Commission’s (FTC) interim report describes the enormous impact pharmacy benefit managers (PBMs) have had on “the accessibility and affordability of prescription drugs.”
In a July 9 announcement, the FTC said the interim staff report, part of an ongoing inquiry launched in 2022, “details how increasing vertical integration and concentration has enabled the six largest PBMs to manage nearly 95 percent of all prescriptions filled in the United States.”
And the impact of those PBMs’ tight grip on the industry and country has been dire. “This vertically integrated and concentrated market structure has allowed PBMs to profit at the expense of patients and independent [pharmacies],” the report said.
“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. “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 health-care markets and ensure that Americans can access affordable health care.”
The report listed the six largest PBMs as Caremark Rx, Express Scripts, OptumRx, Humana Pharmacy Solutions, Prime Therapeutics, and MedImpact Healthcare Systems.
“The largest PBMs are now also vertically integrated with the nation’s largest health insurers and specialty and retail pharmacies,” the report added. “The largest PBMs often exercise significant control over what drugs are available and at what price, and which pharmacies patients can use to access their prescribed medications.
“PBMs oversee these critical decisions about access to and affordability of life-saving medications, without transparency or accountability to the public.”
The FTC reported that nearly 30% of Americans questioned said they ration or skip doses of prescribed medications because of their high costs.
The report also noted the PBMs’ tendencies to “prefer their own affiliated businesses,” which creates “conflicts of interest that can disadvantage unaffiliated pharmacies and increase prescription drug costs.” The PBMs accomplish this by “steering” patients to pharmacies affiliated with the PBMs, and away from smaller, independent pharmacies.
And the FTC said evidence suggested “that PBMs and brand pharmaceutical manufacturers sometimes enter agreements to exclude lower-cost competitor drugs from the PBMs’ formulary in exchange for increased rebates from manufacturers.”
Several PBMs were “not … forthcoming and timely in their responses, and they still have not competed their required submissions, which has hindered the Commission’s ability to perform its statutory mission,” the report said.
