Momentum against a pre-determined, non-substantive FTC report is gaining steam as Daniel J. Gilman, senior scholar of competition policy with the International Center for Law and Economics and former Federal Trade Commission (FTC) staffer, and Jessica Melugin, director of the center for technology and innovation at the Competitive Enterprise Institute (CEI), each published blogs pointing out severe flaws in the report.
Gilman, in “Reports Of The Current FTC’s Intellectual Integrity Have Been Greatly Exaggerated,” summarizes the FTC report:
“The tone of the interim staff report is uniformly conclusory, the dearth of solid conclusions notwithstanding. The title page itself screams a lack of seriousness. This is an interim (or preliminary) report to which the commission attached neither the names of staff authors nor the commission’s own imprimatur. So why is it subtitled, “The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies”? Does that seem like the title of an academic study? An objective government report? An interim report on a serious study? An interim report on a study that has no real analysis or general findings of the impact of PBMs on drug costs (or prices) on average or in aggregate? Or—with apologies to the staff—a whole lot of sound and fury, signifying so much less. What happened to the expert agency?”
Echoing concerns from current FTC Commissioner Melissa Holyoak, who dissented the release of the report, Gilman noted the sheer lack of any evidence used to support the claims included in the report:
“As Holyoak points out, the interim staff report is awfully thin on both economic and legal analysis. Anecdotes and case studies are fine as illustrations. But illustrations of what? Where is the systematic analysis of data? Apart from issue spotting—and the dramatic characterization of potential problems—where is the legal analysis?
“Background work on the report began in 2021. The commission contemplated compulsory orders in February 2022 (perhaps leading to the apparently instant departure of Marta Wosinska, who had only recently been appointed director of the FTC’s Bureau of Economics). Revised orders were issued in June 2022. So, the staff spent two to three years reviewing millions of documents in order to produce this unsigned “interim staff report” (so far, at least). Is this all we get?
“Were any economists harmed, or even mildly inconvenienced, in the study design or its execution?”
Read Gilman’s full blog HERE.
Jessica Melugin, director of the center for technology and innovation at the Competitive Enterprise Institute (CEI), concluded the report was nothing more than unbacked accusations:
“The click-bait title and agency bias could perhaps be forgiven if the contents of the report proved any of the dire accusations. But the FTC continues its march away from rigorous fact finding and economic evaluation. At a recent CEI-hosted event on a different topic, panelist Fred Ashton said, “When it came to writing the report, it’s as if the FTC locked the economists out of the room.” Ditto for the PBM report.
“Instead, we are left with anecdotes in the form of (sometimes anonymous) public comments and scary hypotheticals. There is no evidence presented of higher costs to consumers caused by PBM practices, even though that question should be at the crux of a 6(b) study of that industry. If the conclusions many in FTC leadership have seemingly already reached are so obvious, why not produce a robust economic treatment of the issue?”
In addition, an analyst for JPMorgan, Lisa Gill, noted, “The FTC’s interim findings fall short of any charges against the PBMs or empirical findings on the relationship between increased consolidation in the PBM industry and higher drug prices.”
Read other opposition from a former U.S. Senator, a former Secretary of State, academics, national organizations, and two current FTC commissioners HERE.
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