FTC Caught in Balancing Act With Pharmacy Benefit Manager Probe

The FTC will have to sift through competing claims within the pharmacy supply chain as it probes the entities that manage prescription drug benefits.

Independent pharmacies say pharmacy benefit managers’ recent integration with retail pharmacies and health plans has steered patients away from their businesses. But the Pharmaceutical Care Management Association, the leading PBM trade group, says PBMs haven’t limited the healthy growth of the independent pharmacy marketplace—which many rural populations rely on for treatment.

The long-running debate comes as the Federal Trade Commission investigates whether PBMs’ practices are anticompetitive and contribute to higher drug prices. Drug policy analysts say the agency should focus on examining concrete data to reach conclusions on what practices are fueling skyrocketing drug costs, and how this can inform future policy.

“With the soaring price of medicine, everyone likes to engage in finger pointing and claim someone else is the bad guy,” said Robin Feldman, a professor and researcher at the University of California, Hastings College of the Law who focuses on drug patents, pricing, and access.

“A thoughtful FTC study should find the reliable information that policymakers have not had to date and that they need to understand what’s happening,” she said.

PBMs manage drug coverage for health insurers, large employers, Medicare prescription drug plans, and others. They negotiate discounts from drugmakers, collect rebates from them, and determine how pharmacies get reimbursed for distributing prescriptions. The nation’s three largest PBMs—CVS Health Corp., Express Scripts Inc., and OptumRx—control 85% of the market.

The FTC voted unanimously in June to launch a probe and send orders to the six largest PBMs for detailed information on their business practices. The FTC has said its study will look at, in part, fees to unaffiliated pharmacies, any methods to steer patients to PBM-affiliated pharmacies, and the processes to determine what health plans reimburse to pharmacies.

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