FTC votes unanimously to increase scrutiny over pharmacy agent fees

Federal Trade Commission

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The Federal Trade Commission (FTC) voted unanimously to adopt a policy statement on Thursday stating its intention to more closely examine the rebates and fees paid by drug manufacturers to Pharmacy Benefit Managers (PBMs) to get preferred coverage for their drugs from payers.

The five-member commission, including two Republican commissioners, voted 5–0 to increase the scrutiny of the practice to assess its impact on payers and patients.

“These rebate and fee agreements may incentivize PBMs and other intermediaries to steer patients to higher-cost drugs over less expensive alternatives,” the FTC wrote.

Acting as middlemen between drugmakers and consumers, PBMs decide which drugs get covered by health insurance plans and negotiate prices with manufacturers.

Leading PBMs include the Caremark unit of CVS Health Corporation (NYSE:CVS), Express Scripts of Cigna (CI), and OptumRx of UnitedHealth Group (UNH).

The commission has paid particular attention to insulin to highlight the impact of the arrangement. Citing research, FTC points out that the wholesale price of the lifesaving medication has nearly tripled between 2009 and 2017, raising out-of-pocket costs for both insured and uninsured patients.

Notable insulin manufacturers include Eli Lilly (LLY), Sanofi (SNY), and Novo Nordisk (NVO).

Last week, the FTC said it would launch an investigation into how vertically integrated pharmacy benefit managers affect the price and availability of prescription drugs.

Under the probe, companies including CVS Health (CVS), Cigna (CI) and UnitedHealth (UNH), and Humana (HUM) were expected to receive subpoenas for information.

Harry Byrne

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