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Pharmacy Benefit Managers Accused of Inflating Drug Prices and Harming Patients, FTC Report Finds

Main image to the post Pharmacy Benefit Managers Accused of Inflating Drug Prices and Harming Patients, FTC Report Finds

Inflating Drug Prices and Harming Patients

The Federal Trade Commission (FTC) has accused pharmacy benefit managers (PBMs) of engaging in practices that inflate drug prices and harm patients, particularly those with cancer.

Dominant PBMs Control Drug Availability and Cost

PBMs have evolved from administrators processing pharmacy benefits to vertically integrated entities with immense control over drug availability and cost. The three largest PBMs – CVS Caremark, Express Scripts, and OptumRx – manage nearly 80% of prescriptions in the US. When including the next three largest, six PBMs oversee 94% of prescription drug claims.

PBMs Favor Affiliated Pharmacies, Leading to Higher Costs

The FTC report highlights concerning practices by PBMs. Affiliated pharmacies receive significantly higher reimbursement rates than unaffiliated ones, resulting in an estimated $1.6 billion in additional revenue for affiliated pharmacies on just two cancer drugs in under three years. This practice incentivizes PBMs to steer patients towards their affiliated pharmacies, potentially limiting access to lower-cost options.

PBMs Limit Access to Lower-Cost Generic Alternatives

PBMs negotiate rebates with brand drugmakers that sometimes restrict access to potentially lower-cost generic alternatives. This practice can prevent patients from accessing more affordable medications.

Impact on Rural Communities and Independent Pharmacies

The FTC report also raises concerns about the impact of PBMs on rural communities and independent pharmacies. The report notes that 20% of independent retail pharmacies closed between 2013 and 2022, potentially due to PBM practices. This closure creates "pharmacy deserts" where access to essential medications is limited.

Calls for Action and Ongoing Investigation

The FTC's interim report serves as a basis for potential action against PBMs. Lawmakers like Rep. Buddy Carter are calling for the FTC to complete its investigation and take enforcement action against any illegal or anti-competitive practices. The report highlights the need for further scrutiny of PBMs and their impact on drug pricing and patient access.

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May 21, 2023 | 05:09