Inquiry Into PBM Industry Launched by FTC

The Federal Trade Commission says its inquiry “will shed light on” clawbacks, potentially unfair audits, rebates and other business practices of the pharmacy benefits management (PBM) industry. Today’s announcement says the commission will be requiring information from the six largest PBMs.

The Federal Trade Commission (FTC) announced an inquiry into the pharmacy benefits management (PBM) industry today that will require the six largest PBMs to provide information and records regarding their business practices.

The commission said that the companies it is targeted with compulsory orders under its investigative powers are CVS Caremark, Express Scripts, OptumRx, Humana, Prime Therapeutics and MedImpact Healthcare Systems.

“Although many people have never heard of pharmacy benefit managers, these powerful middlemen have enormous influence over the U.S. prescription drug system,” said FTC Chair Lina M. Khan, a Biden appointee, said in a prepared statement posted on the commission’s website. “This study will shine a light on these companies’ practices and their impact on pharmacies, payers, doctors, and patients.”

The FTC announcement triggered reactions from the industry and its critics.

JC Scott, the president and CEO of the Pharmaceutical Care Management Association, the trade and lobbying group for the industry, issued a statement that the group was confident that any investigation will show that the “PBMs are the only member of the prescription drug supply and payment working to lower costs.”

Meanwhile, B. Douglas Hoey, the CEO of the National Community Pharmacists Association, a trade group for independent pharmacists that is critical of the industry, said in a prepared statement that PBMs have “escaped serious scrutiny for far too long but this study will bring their dirty laundry out into the open.”

The 5-0 vote for the inquiry came after the commission deadlocked on whether to investigate the industry in February. This time, Trump appointees Noah Joshua Phillips and Christine Wilson voted for going ahead with the inquiry, although they issued a separate statement in which they defended their opposition in February and explained why they switched to being supportive. The current study, they wrote, was prepared with input from PBM experts at the commission and will look at the “competitive impact of PBM practices including — critically — how those practices might impact the out-of-pocket costs for consumer.”

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