The Federal Trade Commission (FTC) released its interim report on pharmacy benefit managers (PBMs). It was a treatise on how the PBMs are now wound, like poison ivy, around the trunk and boughs of the 300-foot healthcare tree. It coalesced intelligence about the PBM industry. It didn’t address ways to deal with the strangulating vine. In other words, the report left me frustrated. Let me count the ways.
I’m frustrated that 80% of all prescriptions are controlled by the big 3 PBMs and nothing apparently can be done to improve competition. The FTC report points to the top 6 PBMs controlling 95% of prescriptions in the US. Big deal. We’ve known this for a decade.
I’m frustrated that Congress has incessant hearings on the PBM industry and does nothing to actually rein in PBM’s market power.
I’m frustrated that we were talking years ago about ridding our health system of the rebate safe harbor, which has propelled PBM profits and stunted biosimilar prescriptions in certain drug classes.
I’m frustrated that PBMs are increasingly vertically integrated into inpenetrable healthcare organizations, which are now also acting as pseudomanufacturers and can wield considerable bias in their formulary coverage.
I’m frustrated that the PBM industry does not add value to the healthcare system, but only seems to be driven by financial self-interest.
I’m frustrated 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,” according to the FTC report. “This can have dire consequences, with nearly 30% of Americans surveyed reporting rationing or even skipping doses of their prescribed medicines due to high costs.”
I’m also frustrated because I know that nothing will come out of this FTC report. It’s taken the agency 2 years to report on what we already know. The vines are immense, they are tightly wound, and they are resistant to removal. I wish the FTC report was an action-oriented document on ways to cut away the PBM damage, not merely describe it.
ADDENDUM: On July 11, the Wall Street Journal published an article that indicated the FTC was indeed suing the big 3 PBMs (CVS Caremark, Express Scripts, and OptumRx) over their practice of preferring more expensive drugs to gain the greatest rebate and exposing patients to unnecessary higher out-of-pocket costs. The report highlighted insulin as one of the more egregious examples (which was also highlighted in the FTC interim report).
I’ll be following this evolving story in the coming months, with a close eye as to whether the Supreme Court’s recent Chevron decision will have any effect on the FTC’s ability to prosecute this case.