Lawmakers seek commitment to finish probe into schemes linked to high prescription drug costs.
U.S. Senator Cindy Hyde-Smith (R-MS) is among seven Senators who signed a letter to Federal Trade Commission (FTC) Linda Khan asking her to commit to a timeline for its investigation of pharmacy benefit managers (PBMs), an agency inquiry launched in June following pressure from Congress regarding insulin price concerns.
Hyde-Smith joined the bipartisan effort to ensure the FTC completes the investigation of PBMs for potential market manipulation tactics and other anticompetitive practices that increase the cost of prescription drugs.
“As you know, PBMs operate with little to no transparency, making it very difficult if not impossible to understand the flow of money in the prescription drug marketplace and how PBMs determine the prices for prescription drugs,” the Senators wrote. “Recent consolidations between PBMs, insurance providers, and other health care entities have resulted in vertical integration whereby a small number of companies now manage the vast majority of prescription drug benefits. CVS/Caremark, OptumRx and Express Scripts control roughly 75% of the PBM market and are owned by insurers Aetna, United Healthcare, and Cigna, respectively.”
The group of lawmakers expressed their support for legislation that would require the FTC to conduct a study and report to Congress within one year on the effects of consolidation and potentially anticompetitive behavior that may impact prescription drug pricing.
“A few of the provisions required to be examined in the report include whether PBMs charge certain payers a higher price than competing pharmacies or steer patients to pharmacies at which the PBM has an ownership stake, whether PBMs use formulary designs to depress market share of low cost prescription drugs, and if more information about roles of intermediaries in the healthcare marketplace would benefit consumers,” the lawmakers said. “In 2021, this legislation was approved unanimously by the Judiciary Committee and awaits action by the full Senate.”
The Senators said there is a widespread support for examining PBMs and looking into whether they are causing Americans to pay higher prices for prescription drugs.
“This is why we support the FTC’s decision to conduct a PBM study,” the Senators continued. “We hear stories about rising drug costs all the time. A timely study into the business practices of these intermediaries would provide transparency, insight about possible competitive harms, and inform potential legislative action. With the FTC’s action on June 7, 2022, there is widespread support for the study and interest to review its findings in a timely manner. To ensure the 6(b) study’s usefulness, we urge the FTC to issue the report within one year of its issuance.”
