In case you missed it, the growing consensus surrounding the recent actions from the Federal Trade Commission (FTC), including releasing an interim staff report on pharmacy benefit managers (PBMs) without substantial data to back up the wide sweeping claims and using the incomplete report as the basis for a lawsuit against several pharmacy benefit companies, is that the claims lack merit.
Dr. Joel Zinberg, senior fellow at the Competitive Enterprise Institute (CEI) underscores the lack of evidence included in the FTC’s interim report, specifically in regard to claims that PBM-secured rebates somehow lead to high drug prices in the City Journal:
“The FTC alleges that, in pursuit of higher rebates and profits, PBMs “systematically exclude” low list-price insulins from their formularies in favor of high list-price, highly rebated insulins, and successfully pressure insulin manufacturers to raise list prices in order to compete for formulary access.
“Yet the FTC provides little evidence beyond anecdotes from manufacturers’ executives. It cites a 2020 USC Schaeffer Center study that found a roughly one-to-one positive correlation between rebates and list prices. The study did not prove that larger rebates caused manufacturers to raise list prices. All it showed is that PBMs negotiate larger rebates to offset manufacturers’ higher prices.”
Read the full op-ed from Joel Zinberg HERE.
Alden Abbott, Senior Research Fellow with the Mercatus Center at George Mason University and former FTC general counsel, attacks the validity of the findings from the FTC’s interim staff report in recent commentary in Forbes:
“The negative view of PBMs set forth in a recent interim FTC staff report is at odds with economic research on the economic benefits of PBMs.
“The FTC should not issue a final version of the 2024 interim report unless and until staff fully addresses the serious deficiencies revealed by Commissioner Holyoak’s dissent. If these errors cannot be corrected, a final report should not be released and the interim report should be withdrawn. A failure to do so would seriously damage the FTC’s reputation for reputable high quality academic research.”
See the full commentary from Abbott HERE.
Satya Marar, visiting postgraduate fellow at the Mercatus Center, adds to the disapproval of the lack of data surrounding the FTC’s case against rebates:
“Notably, the recent FTC interim report on PBMs and “rebate walls” charted just two anecdotal examples of drugs whose prices may have risen as a result of formulary-listing rebates, but failed to examine industrywide empirical pricing data, or empirical economic data on the contractual relationships among all the parties in the medicine-procurement chain. These criticisms were noted in Commissioner Holyoak’s dissent to the report, which argued that the report’s failure to provide transparent and consistent methodology, its use of loaded language, and it lack of empirical industrywide data compromise not only its utility, but also the quality standards to be expected from the agency’s research products. She also noted that the FTC’s last investigation of PBMs and their impact on competition and drug prices in 2005 found that PBM negotiations lower drug prices and insurance premiums—at least, on average. Both of these findings could constitute evidence of procompetitive efficiencies.”
Learn more about what Marar had to say HERE.
See why The Wall Street Journal Editorial Board has also raised concerns over the FTC’s recent actions against PBMs HERE and a recent piece in Law360 on the flawed FTC suit 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.
