FTC Scrutinizes Pharmacy Benefit Managers Amid Market Consolidation

The U.S. Federal Trade Commission (FTC) has raised concerns over the influence of top Pharmacy Benefit Managers (PBMs) on prescription drug prices. An interim report suggests the three largest PBMs control 79% of the market, potentially inflating drug costs. Increased regulation is being considered to address the issue.

The U.S. Federal Trade Commission (FTC) has spotlighted the outsized influence of Pharmacy Benefit Managers (PBMs) on prescription drug prices following years of market consolidation. An interim staff report released on Tuesday indicates that three major PBMs manage 79% of U.S. prescription drug claims, raising concerns over inflated drug costs and adverse impacts on smaller pharmacies and consumers.

The FTC's findings are part of a two-year investigation into the practices of top PBMs, which serve as intermediaries between drug manufacturers and consumers. These firms negotiate discounts and fees, create covered drug lists, and reimburse pharmacies. UnitedHealth Group Inc's Optum unit, CVS Health Corp's CVS Caremark, and Cigna Corp's Express Scripts are the primary PBMs in question. Both CVS and Express Scripts have rebuffed the report, citing inaccuracies and bias.

President Joe Biden's administration is emphasizing efforts to control soaring healthcare costs. The FTC report highlights that top PBMs are now vertically integrated with major insurance companies and pharmacy chains, giving them significant control over drug prices and accessibility. The call for increased regulation mirrors concerns about the lack of transparency and public accountability in PBM operations.

(With inputs from agencies.)