FTC to Investigate Pharmacy Benefit Manager Industry 

Last week, the Federal Trade Commission announced its plans to launch an inquiry into the prescription drug middleman industry, requiring the six largest pharmacy benefit managers to provide information and records regarding their business practices. The agency will investigate the impact “vertically integrated” pharmacy benefit managers (PBMs) have on the access and affordability of prescription drugs. The companies that are part of the inquiry include CVS Caremark; Express Scripts, Inc.; OptumRx, Inc.; Humana Inc.; Prime Therapeutics LLC; and MedImpact Healthcare Systems, Inc.

Because PBMs are retained to negotiate rebates and fees with drug manufacturers, create drug formularies and surrounding policies, and reimburse pharmacies for patients’ prescriptions, they often have enormous influence on which drugs are prescribed to patients, which pharmacies patients can use, and how much patients ultimately pay at the pharmacy counter. Many of these functions depend on highly complicated contractual relationships that are nearly impossible for patients to understand, and often are intentionally hidden behind a shield of ‘proprietary information.’ Based on significant feedback during a public comment period, this investigation will focus on select practices that have drawn significant critique:

• fees and clawbacks charged to unaffiliated pharmacies;
• methods to steer patients towards pharmacy benefit manager-owned pharmacies;
• potentially unfair audits of independent pharmacies;
• complicated and opaque methods to determine pharmacy reimbursement;
• the prevalence of prior authorizations and other administrative restrictions;
• the use of specialty drug lists and surrounding specialty drug policies;
• the impact of rebates and fees from drug manufacturers on formulary design and the costs of prescription drugs to payers and patients.

The companies will have 90 days to respond. The full press release can be viewed here.