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FTC may probe pharmacy benefit managers

FTC chair Lina Khan has PBMs in her sights

Axios


The Federal Trade Commission will vote Thursday on whether it will study how pharmacy benefit managers affect drug prices and the businesses of pharmacies.

Why it matters: PBMs are powerful, secretive and heavily consolidated, and it appears the FTC is open to scrutinizing the industry that got significantly more concentrated under the FTC's own watch.


The intrigue: The FTC did not respond to requests for more information about what the study could include.

  • But one of the FTC's targets likely will be fees PBMs claw back from pharmacies — fees the federal government is also targeting in a new proposed regulation.


Flashback: Over the past two decades, the FTC has blessed a plethora of mergers and acquisitions that led to the current situation, in which three PBMs — CVS Caremark, OptumRx and Express Scripts — control 80% of the market.

  • CVS bought Caremark in 2007 (just three years after Caremark bought AdvancePCS).

  • UnitedHealth, which owns OptumRx, has acquired several competing PBMs since 2015, including Catamaran, Diplomat and Helios.

  • Express Scripts, now owned by Cigna, acquired NextRx in 2009 and Medco in 2012.


The Express Scripts-Medco deal caused considerable consternation among antitrust experts, but the FTC ultimately cleared it.

  • Former FTC commissioner Julie Brill was the sole dissenting vote, writing: "While I sincerely hope that I am wrong about the effects of this merger, I believe — with deep sadness and concern — that will not prove to be the case."

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