FTC report says pharmacy benefit managers keep drug prices high

An FTC interim report says that pharmacy benefit managers are a big reason for high drug prices but the industry claims the report is flawed - UnSplash +

The report says PBMs profit at the expense of consumers

The Federal Trade Commission (FTC) has issued an interim report on the cost of prescription drugs that suggests the pharmacy benefit managers (PBM) negatively affect the accessibility and affordability of prescription drugs.

The interim staff report is part of an ongoing investigation launched in 2022 and details how the six largest PBMs have positioned themselves to manage nearly 95% of all prescriptions filled in the United States.

The report said the industry’s vertically integrated and concentrated market structure has allowed PBMs to profit at the expense of patients and independent pharmacists.

“The FTC’s interim report lays out how dominant pharmacy benefit managers can hike the cost of drugs, including overcharging patients for cancer drugs,” said FTC Chair Lina M. Khan. “The report also details how PBMs can squeeze independent pharmacies that many Americans—especially those in rural communities—depend on for essential care.”

The Pharmaceutical Care Management Association (PCMA), the industry group representing PBMs, takes issue with the report, saying it falls “far short” of being a definitive, fact-based assessment of PBMs or the prescription drug market.

Industry response

“This report is based on anecdotes and comments from anonymous sources and self-interested parties, and supported only by two cherry-picked case studies that are implied to be representative of the entire market,” said. PCMA CEO J.C. Scott. “The report completely overlooks the volumes of data that demonstrate the value that PBMs provide to America’s health care system by reducing prescription drug costs and increasing access to medications.”

However, the FTC report found that PBMs wield “enormous power over patients’ ability to access and afford their prescription drugs,” allowing PBMs to significantly influence what drugs are available and at what price. The FTC said this kind of market power is one reason 30% of Americans say they ration their prescription drugs.

Khan says the FTC will continue to use all its tools and authorities to scrutinize dominant players across healthcare markets and “ensure that Americans can access affordable healthcare.”

Don't like scammers? You won't like burglars either. See your best security system.