More than 500 stakeholders sent comments to the FTC on whether the commission should look further into pharma middlemen, known as PBMs, with many of the commenters calling for more federal oversight.
Similar to the critical open comment period in a deadlocked FTC session last February, pharmacies and pharmacy groups are continuing to call out the lack of transparency among the top 3 PBMs, which control about 80% of the market.
“What has become apparent during the increase of control and authority of PBMs in the prescription drug market, is that when PBM activity negatively impacts independent pharmacies, it also negatively impacts consumers,” the National Community Pharmacists Association said in its comment.
What’s different between February and now is that there is one more Biden-appointed commissioner on the FTC, so the balance has shifted to a 3-2 advantage for Lina Khan, opening the door for a closer look into PBMs.
A coalition of the largest employers in the US also sent a letter to Khan yesterday outlining their “distress with the continued predatory behavior of the PBM industry, an inexcusable lack of oversight, and the cohort’s recommendations for the Commission to increase transparency and address the untenably high costs in health care.”
And the American College of Rheumatology said it’s “particularly concerned” with several PBM practices that negatively impact patients, including “PBM-imposed access barriers, such as step therapy and prior authorization, [that] delay and deny necessary care for patients,” and the way PBMs “create administrative burdens for clinicians and take valuable time away from patient care.”
Congress is similarly pushing for such sunshine, and it’s been a bipartisan effort too.
Republican Sens. Chuck Grassley (IA) and Mike Braun (IN), alongside Democrat Sen. Ron Wyden (OR), submitted a letter to Khan last week, calling for something to be done after the commissioners remained deadlocked in that 2-2 vote in February on whether to formally look into anti-competitive practices of PBMs.
At the time, Khan said, “We have a real moral imperative to act, this inquiry is long overdue.”
Earlier this week, chairs of their respective committees, Sens. Maria Cantwell (D-WA) and Grassley introduced a new bill to shine a light on the PBM market and empower the FTC and state attorneys general to stop unfair and deceptive PBM business practices.
The legislation would make it illegal for PBMs to engage in what’s known as “spread pricing” in which they charge health plans and payers more for a prescription drug than what they reimburse to the pharmacy, and they pocket the difference. The bill would also prohibit PBMs from clawing back payments made to pharmacies, increasing fees or lowering reimbursements to offset reimbursement changes in federally-funded health plans.
Meanwhile, industry group PhRMA praised a new report from Xcenda that found PBMs are increasingly restricting patient access to prescription medicines.
In 2022, the report notes, 1,156 medicines were excluded from at least one of the three largest PBMs’ standard commercial insurance formularies, which is a nearly 1,000% increase in the number of excluded medicines since 2014.
What’s worse is that brand-name drugs without a generic or biosimilar alternative accounted for nearly half (47%) of total formulary exclusions, leaving patients with fewer and typically more expensive treatment options.