FTC Launches Investigation of PBMs

News
Article

The commission will review PBM business practices, including the impact of rebates on formulary design, the costs of prescription drugs to patients, and methods to determine pharmacy reimbursement.

The Federal Trade Commission (FTC) has launched an inquiry into the impact of PBMs on the access and affordability of prescription drugs. The FTC is asking six PBMs — CVS Caremark; Express Scripts; OptumRx; Humana; Prime Therapeutics; and MedImpact Healthcare Systems — for information and records about their business practices.

Lina M. Khan

Lina M. Khan

“This study will shine a light on these companies’ practices and their impact on pharmacies, payers, doctors, and patients,” Federal Trade Commission Chair Lina M. Khan said in a press release.

In a separate statement, Khan said the FTC has received complaints about PBM practices from patients and professionals across the healthcare system. “PBMs have also been accused of harming patients by extracting rebates and fees in exchange for refusing to cover generic and biosimilar drug products, ultimately raising the price that consumers pay for medicines. Doctors have also complained that PBMs impose unnecessary and burdensome prior authorization and other administrative requirements.”

The decision to launch the study comes after a failed vote in February 2022. Following this, the FTC issued a request for information and has received more than 24,000 public comments to date.

This time, the commission voted 5-0 to conduct the review of PBMs. The two commissioners who opposed the study in February — Noah Joshua Phillips and Christine S. Wilson — said in a joint statement that the initial study wasn’t comprehensive and didn’t examine the competitive impact of PBM contracting practices.

This new study “is scoped to study the competitive impact of PBM practices, including – critically – how those practices might impact out-of-pocket costs for consumers,” they said. “The study will examine relationships between PBMs and pharmacies and also PBMs and pharmaceutical manufacturers, a matter of much public interest.”

The FTC is asking the PBMs for a wide range of information from Jan. 1, 2017, to the present about contracts that determine reimbursement, pharmacy reimbursement data and information about all formularies, including criteria for designating and reimbursing drugs as specialty drugs. The FTC wants information about formulary placement, formulary exclusion, formulary tier assignment, prior authorization or step therapy requirements for all rebated drug products. Additionally, regulators want to know any situation where a brand or reference biologic drug is placed on a more favorable formulary tier than a generic or biosimilar equivalent.

The FTC is also asking PBMs to provide information on discount rates, dispensing fees, rebate pass-through methodology, pass-through discounts, price protection guarantees, and pass-through fees from drug manufacturers.

The PBMs will have 90 days from the date they receive the order to respond.

Pharmaceutical Care Management Association (PCMA) President and CEO JC Scott said in a statement that drug manufacturer pricing is the true cause of high drug costs. “The most effective study of issues around drug costs for consumers would examine the entire supply chain,” he said.

"We are currently reviewing the revised study approved today by the FTC. We are confident that any examination of pharmacy benefit managers, PBMs, will validate that PBMs are reducing prescription drug costs for consumers," Scott said.

A spokesperson for CVS Health said they looking forward to working cooperatively with the FTC.

Recent Videos
Related Content
© 2024 MJH Life Sciences

All rights reserved.