What it is: The influence of pharmacy benefit managers (PBMs) is central to the U.S. pharmaceutical system. They negotiate fees and rebates, establish formularies, determine consumer access to pharmacies, and manage pharmacy reimbursements for prescriptions along with the prices patients pay at the counter.
Just six PBMs manage 96% of all prescriptions sold nationally, and nearly all of them are vertically integrated with the largest health insurance companies and wholly owned mail order and specialty pharmacies. They are:
The challenges: It’s important to note that the FTC has authority under Section 6(b) to conduct studies without a specific law enforcement purpose, and that no specific wrongdoings are alleged. Rather, the inquiry focuses on the business practices of these PBMs, including but not limited to:
Our take: The six PBMs involved in the inquiry have 90 days from receipt of the order to respond to the FTC. A final report from the federal agency will likely take months to complete, with a range of potential enforcement provisions ranging from no action to antitrust actions to monetary penalties to new PBM-focused legislation.
PSG will monitor the FTC inquiry, subsequent actions, and potential impacts to our clients as part of our client advocacy services. Our hope is that this investigation will represent a step toward improving industry transparency and reducing prescription drug costs for providers, payers, and patients.