WASHINGTON D.C., July 9, 2024: The Federal Trade Commission (FTC) has issued an interim report condemning the top Pharmacy Benefit Managers (PBMs) for unfairly rigging the healthcare system to reap huge profits.

FTC Chair Lina M. Khan, “The FTC’s interim report lays out how dominant pharmacy benefit managers can hike the cost of drugs—including overcharging patients for cancer drugs.”  

“The report also details how PBMs can squeeze independent pharmacies that many Americans—especially those in rural communities—depend on for essential care. The FTC will continue to use all our tools and authorities to scrutinize dominant players across healthcare markets and ensure that Americans can access affordable healthcare.”

Key insights in the report include:

  • Concentration and vertical integration - the top 6 PBMs dispensed over 90% of prescriptions in the US in 2023
  • Significant power and influence - the top PBMs control accessibility and pricing, yet provide no accountability or transparency
  • Self-Preferencing - the top PBMs steer customers away from independently owned pharmacies towards their own affiliated businesses
  • Unfair Contract Terms - "Evidence suggests that increased concentration gives the leading PBMs leverage to enter contractual relationships that disadvantage smaller, unaffiliated pharmacies."
  • Efforts to limit access to low-cost competitors - "Evidence suggests that PBMs and brand pharmaceutical manufacturers sometimes enter agreements to exclude lower-cost competitor drugs from the PBM’s formulary in exchange for increased rebates from manufacturers."

Stay tuned to Heath Law Alliance as we follow this and other important healthcare issues.

You may view our PBM Resource Page, sign up for our free PBM Audit Guide, and please contact us if you have any questions regarding PBMs or PBM Audits.

Frequently Asked Questions

How do Pharmacy Benefit Managers (PBMs) influence the cost of prescription drugs?

Pharmacy Benefit Managers (PBMs) play a significant role in determining the cost of prescription drugs by negotiating prices with drug manufacturers, managing drug formularies, and setting reimbursement rates for pharmacies. The recent FTC report highlights that the top PBMs often engage in practices that can increase drug prices, such as excluding lower-cost competitor drugs from their formularies in exchange for higher rebates from manufacturers. This lack of transparency and accountability can lead to higher costs for patients.

What impact do PBMs have on independent pharmacies?

PBMs often steer patients towards their own affiliated pharmacies, disadvantaging independent pharmacies. According to the FTC's interim report, this practice, known as self-preferencing, can significantly harm smaller, unaffiliated pharmacies by reducing their customer base and revenue. Additionally, PBMs' leverage in contractual negotiations can result in unfavorable terms for independent pharmacies, making it difficult for them to compete and provide essential services, especially in rural areas.

What steps is the FTC taking to address PBM practices?

The FTC is actively scrutinizing the practices of dominant PBMs to ensure they do not unfairly increase drug prices or limit access to affordable healthcare. The FTC's interim report condemns these practices and signals the agency's commitment to using all available tools and authorities to promote transparency, accountability, and fair competition in the healthcare market. This includes investigating and potentially taking action against PBMs that engage in anti-competitive practices or unfairly disadvantage independent pharmacies.

MORE ARTICLES BY CATEGORY

Get a Free Case REVIEW

100% Confidential & Secure. Your details are safe with us.

We'll speak soon!

In the meantime, why not find out more about us or visit our blog.

Alternatively, give us a call at (800) 345 - 4125

Oops! Something went wrong while submitting the form.

Federal Indictment Against NJ Doctor Collapses in Stunning DOJ Reversal

Health Law Alliance secured a full dismissal of all federal charges against NJ urologist Dr. Mukaram Gazi, marking an unprecedented acquittal in an otherwise unbroken string of 35 Insys-related prosecutions brought by federal and state prosecutors.

Read More >>

DEA Registration Requirements for Healthcare Providers: How to Stay Compliant

Understanding DEA registration requirements is crucial for healthcare providers handling controlled substances. Compliance with state and federal regulations helps avoid legal risks and ensures smooth practice operations.

Read More >>

Should You Voluntarily Surrender Your DEA Registration? What Healthcare Professionals Need to Know

Considering voluntarily surrendering your DEA registration? Our experts can help you navigate the process and understand your options. Call (800) 345-4125.

Read More >>

Sun Pharma RICO Lawsuit Exposes Bribery Conspiracy Involving Big Three Wholesalers

Health Law Alliance attorney Anthony Mahajan, a former federal prosecutor, analyzes Sun Pharma's RICO lawsuit against independent pharmacies and opines that Sun Pharma's attempt to recover refunds it paid on returned goods is prohibited by the federal Anti-Kickback Statute and state commercial bribery laws.

Read More >>