The Federal Trade Commission (FTC) has released an interim report shedding light on the practices of pharmacy benefit managers (PBMs), the middlemen in the prescription drug supply chain. The report, part of an ongoing inquiry launched in 2022, raises significant concerns about the impact of PBMs on drug affordability and accessibility.

Key Findings:

  1. Market Concentration: The six largest PBMs manage nearly 95% of all prescriptions filled in the United States, with the top three processing about 80% of the 6.6 billion prescriptions dispensed in 2023.
  2. Vertical Integration: Major PBMs are now integrated with large health insurers and pharmacies, giving them unprecedented control over the pharmaceutical supply chain.
  3. Impact on Consumers: The report suggests that PBMs’ practices may be contributing to higher drug costs, with 30% of Americans reporting rationing or skipping doses due to expense.
  4. Pressure on Independent Pharmacies: PBMs reportedly impose unfair contract terms on independent pharmacies, potentially threatening their ability to serve local communities.
  5. Conflicts of Interest: Vertically integrated PBMs may be steering patients to their affiliated pharmacies, potentially disadvantaging smaller competitors and increasing costs.
  6. Rebate Practices: Some PBMs negotiate rebates with drug manufacturers that may limit access to lower-cost generic and biosimilar alternatives.

FTC Chair Lina M. Khan emphasized the report’s findings on how PBMs can increase drug costs and pressure independent pharmacies, particularly in rural areas. The Commission voted 4-1 to release the interim report, with ongoing investigations into PBM practices.

As the FTC continues its inquiry, this report highlights the complex challenges in the prescription drug market and the potential need for reforms to ensure fair competition and affordable access to medications for all Americans.

Next Steps:

  1. Ongoing Investigation: The FTC emphasized that this is an interim report, and the investigation is ongoing. The Commission remains committed to providing timely updates as it receives and reviews additional information.
  2. Compliance Demands: Several PBMs have not been fully forthcoming or timely in their responses to the FTC’s orders. The Commission has demanded that these companies promptly complete their required submissions.
  3. Potential Legal Action: If any companies fail to fully comply with the FTC’s orders or engage in further delay tactics, the FTC may take them to district court to compel compliance.
  4. Continued Scrutiny: FTC Chair Lina M. Khan stated that the Commission will “continue to use all our tools and authorities to scrutinize dominant players across healthcare markets and ensure that Americans can access affordable healthcare.”
  5. Policy Implications: While not explicitly stated in the report, the findings may inform future policy discussions and potential regulatory actions in the pharmaceutical and healthcare sectors.
  6. Public Engagement: The FTC encourages the public to stay informed by following their social media channels, reading consumer alerts and the business blog, and signing up for the latest FTC news and alerts.

As this investigation progresses, it could have significant implications for the pharmaceutical industry, healthcare providers, and most importantly, patients across the United States. The FTC’s findings and subsequent actions may shape the future landscape of prescription drug pricing and accessibility.

This article was originally published on iBIO NewsBrief. Gain a head start on your day with iBIO NewsBrief. Subscribe to receive top industry headlines delivered straight to your inbox.

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