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July 9, 2024

The Federal Trade Commission Releases Interim Report on Pharmacy Benefit Managers

Today, the Federal Trade Commission (FTC) released its interim report on pharmacy benefit managers (PBMs). In a press release accompanying the interim report, FTC Chair Lina Khan said, “The FTC’s interim report lays out how dominant pharmacy benefit managers can hike the cost of drugs—including overcharging patients for cancer drugs. The report also details how PBMs can squeeze independent pharmacies that many Americans—especially those in rural communities—depend on for essential care. The FTC will continue to use all our tools and authorities to scrutinize dominant players across healthcare markets and ensure that Americans can access affordable healthcare.”

The interim report provides the following key insights:

  • The market for pharmacy benefit manager services has become highly concentrated, and the largest PBMs are now also vertically integrated with the nation’s largest health insurers and specialty and retail pharmacies.
  • As a result of this high degree of consolidation and vertical integration, the leading PBMs can now exercise significant power over Americans’ access to drugs and the prices they pay.
  • Evidence suggests that increased concentration may give the leading PBMs the leverage to enter into complex and opaque contractual relationships that may disadvantage smaller, unaffiliated pharmacies and the patients they serve.
  • PBMs and brand drug manufacturers sometimes negotiate prescription drug rebates that are expressly conditioned on limiting access to potentially lower cost generic alternatives. 

The report is part of an ongoing inquiry launched by the FTC in 2022 on PBMs and their impact on access to and affordability of medicines. 

To read the interim report, CLICK HERE.
To read a press release from the FTC, CLICK HERE.