The interim FTC report released Tuesday said PBMs wield enormous power on the accessibility and affordability of prescription drugs, and “these powerful middlemen may be profiting by inflating drug costs and squeezing Main Street pharmacies.”
The interim staff report, which is part of an ongoing inquiry launched in 2022 by the FTC, details how increasing vertical integration and concentration has enabled the three largest PBMs — CVS Caremark Rx, Express Scripts and OptumRx — to manage nearly 80 percent of the approximately 6.6 billion prescriptions filled in the United States.
PBMs negotiate the terms and conditions for access to prescription drugs for hundreds of millions of Americans. They are responsible for negotiating prices with drug companies, paying pharmacies and determining which drugs patients can access and how much they cost.
Congressional pressure on PBMs has been building, and bipartisan bills to change certain PBM business practices have cleared two Senate committees. But major policy disagreements between House and Senate Republicans in terms of the scope of the changes led to them being sidelined this past spring, likely until a lame duck session after the November elections.
Still, lawmakers on Tuesday said they weren’t letting up.
“The FTC says it’s committed to completing this review in a timely manner, and you can bet I’ll be holding the commission to its promise,” said Sen. Chuck Grassley (R-Iowa).
“At the same time, Democratic Leader Schumer ought to listen to the bipartisan majority of the Senate and take action on the bills my colleagues and I have shepherded through committee to shine light on shady PBM operations.”
As the industry has grown more consolidated, critics say PBMs have exerted greater control over patients’ access to medicine. PBMs are vertically integrated, serving as health plans and pharmacists. The largest PBMs are owned by insurers, which own specialty, mail order or retail pharmacies.
According to the report, pharmacies affiliated with the three largest PBMs took in nearly $1.6 billion in excess revenue on just two cancer drugs in under three years by reimbursing their own pharmacies at much higher rates than unaffiliated ones.
“The FTC’s comprehensive findings show how PBMs use their market power to drive up costs for families and restrict access to preferred pharmacies at the expense of independent pharmacies,” Senate Finance Committee Chair Ron Wyden (D-Ore.) said in a statement.
“The Finance Committee overwhelmingly passed legislation to hold PBMs accountable, and I am going to the mat to deliver that bill to the president’s desk this year.”
