A former U.S. Senator, a former Secretary of State, academics, national organizations, and two current FTC commissioners raised serious concerns about the Federal Trade Commission’s (FTC) interim report on pharmacy benefit managers (PBMs). The interim report conspicuously lacks empirical data provided to the agency by PBMs. Instead, it relies on anecdotes and comments from anonymous sources and self-interested parties. Adding to the inaccuracy of the report, it is supported by merely a preliminary look at data for only two drugs, out of the tens of thousands of prescription drugs in the market.

Commissioner Melissa Holyoak said in her dissenting statement:

“To begin with, the Report was plagued by process irregularities and concerns over the substance—or lack thereof—of the original order. In fact, the politicized nature of the process appears to have led to the departure of at least one senior leader at the Commission. The concerns over process and substance turned out to be warranted. Rather than generate public engagement and fruitful policy discussion, the Report will only exacerbate ideological schisms and further degrade the legitimacy of the Commission. And most importantly, the Report leaves us without a better understanding of the competition concerns surrounding PBMs or how consumers are impacted by PBM practices. I therefore dissent.”

During a U.S. House Committee on Energy and Commerce Innovation, Data, and Commerce Subcommittee Hearing: The Fiscal Year 2025, Commissioner Holyoak reiterated her concerns with the interim report:

Geoffrey Manne, president and founder of the International Center for Law & Economics, commended Commission Holyoak’s dissent:

“[Commissioner Holyoak’s] dissent from today’s FTC interim staff report on PBMs is an absolute tour de force. I can’t recommend it enough. I could share every single word here—it’s only 7 pages long and worth every page. But here are a couple of highlights. First, Holyoak stresses that the report isn’t up to any recognized standard of quality. It is a piece of advocacy, devoid of empirics and built entirely around an unsupported assertion that increased concentration is harmful.”

FTC Commissioner Andrew Ferguson expressed criticism of the study’s approach in a statement:

“[The interim report] relies, throughout, in large part on public information that was not collected from the PBMs or their affiliates during the 6(b) process. Additionally, it relies heavily on public comments, with staff having reviewed over 1,200 comments and citing over four dozen. As an initial matter, over 160 of the public comments reviewed in connection with this study were submitted anonymously—including several of the comments cited in the PBM Interim Staff Report. My colleagues are correct that comments, even anonymous ones, are an important part of the Commission’s enforcement and 6(b) process. But we ought to treat anonymous comments with circumspection. After all, we cannot know who submitted the comments, nor do we have any method for verifying the accuracy of a single word they contain. We therefore cannot be sure how much weight, if any, to accord them as we try to understand these markets. The PBM Interim Staff Report nevertheless ascribes those anonymous submissions to independent pharmacies, or pharmacies generally, and treats their contents as fact.”

Daniel Gilman, senior scholar of competition policy at the International Center for Law & Economics, questioned if any economists even contributed to the findings of the report:

“The FTC has released its long-awaited report on the PBM industry as an “Interim Staff Report.” It’s yet another staff report that doesn’t name the relevant staff. On the one hand, it does contain some useful information on industry developments. On the other, it’s awfully thin on economic and legal analysis. Background work began in 2021. The Commission considere[d] compulsory orders in Feb. 2022 (perhaps leading to the departure of the BE bureau director); and revised orders were issued in June 2022. Is that all we get? Were any economists harmed, or even mildly inconvenienced, in the study design? Its execution? Yes, things have changed since 2005, but the 2005 PBM report was both more focused in its scope and a far more substantial piece of work.”

Former Secretary of State Mike Pompeo revealed the politically fueled agenda of the FTC:

“Biden’s FTC thinks it can lower drug prices by enlarging the size and scope of the federal government. This is driven by politics and ideology, not the facts, and the end result of this administration’s socialist meddling will be higher drug prices for all Americans.”

Former U.S. Senator Pat Toomey (R-PA) pointed out how the FTC’s interim study follows a pattern of activity from the commission targeting market forces in the U.S. economy:

“The Biden FTC has once again proven itself focused on maligning market forces in our economy, rather than the facts or the wellbeing of consumers. The new PBM report relies on public comments from self-interested PBM critics to make sweeping assertions devoid of data or evidence. The fact is: PBMs deliver savings on Rx drugs.”

Jessica Melugin of the Competitive Enterprise Institute (CEI) also highlighted how the report omits data or evidence to back up its assertions:

“The FTC has, unfortunately, continued its recent habit of failing to conduct empirical analysis of market conditions with today’s interim report on PBMs. Buzz words and ‘bad vibes’ make for good sound bites and plentiful invites for cable television hits, but they are woefully insufficient for making good policy. Serious economic proof must be presented before interfering with the health needs of Americans; this report fails to do so.” 

Tom Hebert, director of competition and regulatory policy at the American Tax Reform (ATR) and executive director of the Open Competition Center criticized the commission’s agenda-driven approach:

“FTC Commissioner [Melissa Holyoak] is out with an excellent dissent to the [FTC’s] investigation into pharmacy benefit managers.  Holyoak and Ferguson are doing critical work calling out how [Lina Khan] twists agency procedures to achieve political outcomes.” 

Fred Ashton, director of competition policy at the American Action Forum (AAF) also applauded Commissioner Holyoak’s dissent and the lack of data in the report:

“FTC Commissioner [Holyoak] provided an excellent dissent to the [FTC’s] interim report on PBMs pointing to a lack of economic analysis and a politicized process.”  

Read PCMA’s statement on the interim study HERE.

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PCMA is the national association representing America’s pharmacy benefit companies. Pharmacy benefit companies are working every day to secure savings, enable better health outcomes, and support access to quality prescription drug coverage for more than 275 million patients.