Lawmakers urge FTC to release newest report on pharmacy benefit managers
A bipartisan, bicameral group of lawmakers is calling on the Federal Trade Commission (FTC) to vote in favor of releasing an interim staff report on pharmacy benefit managers (PBM).
Sens. Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.), along with Reps. Jake Auchincloss (D-Mass.) and Diana Harshbarger (R-Tenn.), wrote to the FTC in light of an upcoming Jan. 14 open commission meeting to consider issuing a second interim staff report on PBMs.
"PBMs were originally created to handle the prescription drug benefit on behalf of health plans, negotiating directly with drug manufacturers and setting pharmacy networks for their contracted payers," the lawmakers wrote.
"But over the years, these once little-known middlemen have morphed into giant, vertically-integrated conglomerates that control every link in the drug coverage and delivery chain, including pharmacies and health plans."
The FTC launched its inquiry into PBMs in 2022. Last year, the agency released its first interim staff report on PBMs which found that dominant, vertically integrated PBMs use their outsized market share to profit off of patients and independent pharmacists.
FTC Chair Lina Khan said at the time the report highlighted how PBMs "can squeeze independent pharmacies that many Americans — especially those in rural communities —depend on for essential care" and "hike the cost of drugs — including overcharging patients for cancer drugs.
PBM reforms were included in earlier drafts the government funding bill last month, but were ultimately left out. The package would have included a ban on linking PBM compensation to a drug’s Medicare list price as well as a requirement that PBMs "fully pass through 100 percent of drug rebates and discounts … to the employer or health plan.”
The second staff interim report being considered includes findings from the FTC's study on the contracting practices of PBMs.
This group of lawmakers who wrote to the FTC introduced legislation last month that would prohibit the joint ownership of both PBMs and pharmacies, calling this practice a "gross conflict of interest." They cited the FTC's report last year as having informed this bill.
"We expect a second interim report will shine further light on the industry that will be invaluable to legislators as the policy priorities of the 119th Congress take shape," they wrote.
"Accordingly, we urge FTC to issue its second interim staff report swiftly and continue investigating the serious effects of the PBM industry on patients, taxpayers, and independent pharmacies."
The FTC's open commission meeting will be held virtually on Jan. 14 at 11 a.m. EST. Time will be given for members of the public to address the commission.