After the Federal Trade Commission released its report highlighting the "enormous power" pharmacy benefit managers have over drug pricing and access, agency Commissioner Melissa Holyoak, criticized the report and its findings in a dissenting statement.
In her July 9 dissent, Ms. Holyoak criticized the FTC report on process irregularities in producing it, lack of substance, and for not generating meaningful engagement around policy.
"[T]he report was plagued by process irregularities and concerns over the substance — or lack thereof — of the original order," she wrote. "In fact, the politicized nature of the process appears to have led to the departure of at least one senior leader at the Commission. The concerns over process and substance turned out to be warranted. Rather than generate public engagement and fruitful policy discussion, the report will only exacerbate ideological schisms and further degrade the legitimacy of the Commission. And most importantly, the report leaves us without a better understanding of the competition concerns surrounding PBMs or how consumers are impacted by PBM practices."
She also referenced a 2005 FTC report that found that these entities do not influence price or access to drugs as heavily as the 2024 report indicated.
The intention of the updated report on the topic, Ms. Holyoak said, was to reference what was done in 2005 and provide an analysis of how the landscape has changed.
"[T]o assert that market conditions have changed is one thing — but to ignore the 2005 report without conducting a new empirical analysis of market conditions or explaining why the findings, conclusions, and empirical work no longer apply is a different matter entirely," she wrote. "Among other critical conclusions, the report does not address the seemingly contradictory conclusions in the 2005 report that PBMs, including vertically owned PBMs, generated cost savings for consumers. In fact, the report does not present any empirical evidence to rebut the 2005 report's findings."
Another FTC Commissioner, Andrew Ferguson, said, although he concurs with the release of the report on PBMs, he added it was important to mention the "unusual nature of this particular interim report." He criticized the report's interim release, heavy reliance on public comments, and lack of evidence and notes, and said he was "troubled" by the report's claims that PBMs have not yet complied with the June 2022 Orders issued to them.
"Before issuing a final report, we need to determine whether these findings are representative of market dynamics for other drugs, and we need to learn whether any reimbursement practices ultimately affect consumers' out-of pocket costs," Mr. Ferguson wrote. "Prescription-drug prices have risen higher and higher, with list prices on average outstripping even the runaway inflation of the last few years. We need to understand whether any anticompetitive or unfair or deceptive acts or practices on the part of PBMs or any other market participants are contributing to these prices."
The Pharmaceutical Care Management Association — a national association representing pharmacy benefit companies — also criticized the report.
Several healthcare industry groups praised the report, as did a lawmaker.
The following organizations shared their reactions to the report with Becker's:
American Society of Health-System Pharmacists: The report, which is part of an ongoing inquiry ASHP has called for since 2022, focuses on the abusive practices of PBMs. … PBM reform is one of ASHP's long-standing advocacy issues. ASHP previously testified before the FTC and wrote to the FTC commissioner highlighting these dangerous PBM practices. ASHP applauds the FTC for its ongoing work on PBMs and encourages the commission to continue prioritizing patient safety and access to medications by curbing abusive PBM practices. ASHP also supports legislation advancing in both chambers of Congress to rein in PBMs."
Cigna's Express Scripts (one of the three largest PBMs in the U.S.): These biased conclusions will do nothing to address the rising prices of prescription medications driven by the pharmaceutical industry. Nor will they help the employers, unions, and government clients that work with pharmacy benefit managers to help keep prescription benefits affordable for their members. We have provided the FTC with millions of lines of data and documents over the last two and a half years and we look forward to addressing the blatant inaccuracies in the Commission’s initial report.
CVS Caremark (one of the three largest PBMs in the U.S.): We stand by our record of protecting American businesses, unions, and patients from rising prescription drug prices. Our efforts have resulted in members, on average, paying less than $8 per 30-day supply of medication. Independent analyses show net brand drug prices have declined six years in a row, despite significant inflation across the U.S. economy and egregious list price increases from drugmakers. This is the work we do every day on behalf of the businesses who provide benefits to their employees. The FTC was created to protect consumers. Any suggestions from the FTC about policies that limit the use of PBM negotiating tools would instead reward the pharmaceutical industry, leaving American businesses and patients at the mercy of the prices drugmakers set. We will continue to work every day on behalf of every business and consumer we serve so that every prescription is delivered safely and affordably.
National Association of Chain Drug Stores: "NACDS emphasizes that these harms are experienced brutally by pharmacies of diverse sizes and formats, including independents and chains, that do not receive preferential treatment from their vertically integrated plans and PBMs. For more than two years, the FTC has been studying PBM tactics, and NACDS has contributed insights to this important work. Unfortunately, this study also exemplifies the PBMs' focus on delaying reforms. … For patients and for the pharmacies on which they rely, all branches of government at the federal and state levels must act to bring about comprehensive PBM reform, and do so without delay."
National Community Pharmacists' Association CEO Douglas Hoey: In recent years, the pharmacy benefits space has undergone massive transformation. It's no longer 2005. Without question — and as the interim report makes clear — the marketplace has exploded because of countless mergers and acquisitions, as well as tactics like patient steering and take-it-or-leave-it contracting. It's a system that may work for massive PBM middlemen, but it's anti-consumer and anticompetitive."
Pharmaceutical Care Management Association CEO JC Scott: Today’s interim FTC report falls far short of being a definitive, fact-based assessment of PBMs or the prescription drug market. Members of the commission themselves disagree with the content of the report and the decision to release it. This report is based on anecdotes and comments from anonymous sources and self-interested parties, and supported only by two cherry-picked case studies that are implied to be representative of the entire market. The report completely overlooks the volumes of data that demonstrate the value that PBMs provide to America’s health care system by reducing prescription drug costs and increasing access to medications."
UnitedHealth's OptumRx (one of the largest PBMs in the U.S.): PBMs, like Optum Rx, are the key counterweight to pharmaceutical companies' monopoly power to set and raise drug prices, and the money we are saving the employers, unions, governments and payers who rely on us to negotiate savings is helping consumers through reduced premiums, point-of-sale discounts on medicines and greater investment in population health and wellness programs. The FTC has rushed to publish an incomplete report with flawed conclusions that do not follow from the data and information Optum Rx provided to the agency.