Senator Wyden Calls For Federal Investigation Into "Anti Competitive" Pharmacy Industry Practices

KDRV.com

WASHINGTON, DC — US Senator from Oregon Ron Wyden on Tuesday called on the Federal Trade Commission to investigate the increasing consolidation of Oregon's retail pharmacy market, asking the federal agency to find out whether national pharmacy chains and health plans have acted to make the market less competitive.

In a letter to FTC Chair Lina Khan, Wyden referenced the recent purchase of Bi-Mart's chain of pharmacies by Walgreens, impacting 56 pharmacies across the Northwest, including 37 in Oregon.


While the sale allowed for pharmacies within Bi-Mart stores to continue under the Walgreens brand if there were no other nearby locations, the majority of Bi-Mart pharmacies were simply shuttered with their patients transferred to the nearest Walgreens location. At the same time, staffing shortages at many Walgreens pharmacies have resulted in reduced hours and longer wait times.

“Exploitative business practices conducted by pharmaceutical middlemen are driving locally owned pharmacies out of business,” said Wyden, who chairs the Senate Finance Committee. “These practices are not unique to the Pacific Northwest, so I am calling on the FTC to investigate this trend on a national level so action can be taken to protect local businesses.”

Wyden's letter also took aim at a practice called "direct and indirect remuneration," which he characterized as a form of retrospective fees leveled against pharmacies by pharmaceutical benefit managers (PBMs), and which has been cited as a major challenge to the finances of pharmacies.

According to a report by the federal Centers for Medicare and Medicaid Services, benefit managers increased these fees under Medicare Part D by 91,500% between 2010 and 2019.

“My deep concern about the trends unfolding in Oregon lead me to request that the FTC investigate Walgreens’ acquisition of Bi-Mart pharmacies, including the surrounding circumstances,” Wyden added. “Although these closures represent a local example, as Chairman of the Senate Finance Committee, I am concerned that they represent a larger national trend in which a few powerful companies have gained the market power to drive competitors out of business and monopolize the market.”

Michele Belcher owns Grants Pass Pharmacy, and also serves as president of the National Community Pharmacists Association. During a virtual town hall last Thursday, Belcher railed against the "big three" pharmacy benefit managers — CVS Health/Aetna, Cigna/Express Scripts and UnitedHealthcare/OptumRx — and their dominance of the market.

"Together they monopolize 77 percent of the prescription drug benefit market. Independent pharmacies have no leverage to negotiate with PBMs and are forced into take-it-or-leave-it contracts if they want access to networks necessary to serve their patients," Belcher said. "Even after I accept these one-sided contracts, I am subject to terms that allow the PBMs to steer my patients to their own affiliated pharmacies, opaque financial clawbacks, and discriminatory reimbursement.

"The massive consolidation has hurt my small business, my patients, and many pharmacies like mine. It’s almost like the Cignas and CVSs of the world are too big to regulate."

Belcher said that her pharmacy has been in the community since 1933 and is the last remaining independent pharmacy in the area.

In October, Wyden also urged the Centers for Medicare and Medicaid Services to review pharmacy closures across the country in the last five years with a focus on the fees imposed under Medicare Part D plans and the pressure of pharmacy benefit managers could be contributing to closures.