SCPC Expresses Disappointment in FTC’s Deadlock Vote on Study of PBM’s Impact on Drug Prices and Independent Pharmacies

DATE: February 18, 2022

The FTC must act to curb the anti-competitive practices of PBMs

Washington, D.C. – Yesterday, the Federal Trade Commission (FTC) deadlocked on whether to begin a study on the effect large pharmacy benefit managers (PBMs) have on drug prices and practices that may disadvantage independent and specialty pharmacies, as well as the patients they serve.

The Senior Care Pharmacy Coalition (SCPC), the organization representing the nation’s long-term care (LTC) pharmacies, offered the following statement from SCPC CEO and President, Alan Rosenbloom, in response to the FTC ruling:

“We are disappointed in the FTC’s continuing deadlock on whether to study the anti-competitive activities of PBMs. This long overdue study is crucial to ensuring free and fair markets for prescription drugs and pharmacy services. PBMs are the hub around which enormous and expanding health care conglomerates revolve. They routinely engage in extortionate practices and price gouging as they act as middlemen between drug companies, pharmacies, and consumers.

We strongly urge the FTC to study PBM practices and their impact on drug prices and independent and specialty pharmacies. And we encourage the FTC to consider the unique impact of PBMs on LTC pharmacies. The FTC must address the market domination of PBM-driven conglomerates and to block further consolidation among PBMs and their affiliated conglomerates in adjoining markets.         

Just three PBMs, Caremark, Express Scripts and OptumRx dominate the market, processing 77% of prescriptions delivered to Americans. For LTC pharmacies, the “big three” process nearly 90% of all prescriptions. Each PBM is a part of a larger conglomerate that collectively dominate the markets for health insurance, prescription drug coverage, retail pharmacy, mail order pharmacy, and specialty pharmacy, and owns a significant share of the LTC pharmacy market. 

PBMs routinely gouge pharmacies with pay-to-play fee demands, fees which the Center for Medicare and Medicaid Services estimates have increased more than 100,000% from 2010 to 2020 and now top $9 billion a year. The landscape of limited competition allows PBMs to exercise undue market power, disadvantage unaffiliated pharmacies, and limit consumer choice while forcing them to pay more for drugs, thus generating outsized profits for themselves.

Anti-competitive barriers imposed by PBMS that restrict patient access to high-quality care and services from specially trained health care professionals like those at LTC pharmacies should be removed. Older Americans with long-term care needs require an average of 12-14 prescription drugs per day. These individuals are medically complex, suffer multiple chronic conditions, and have extensive impairments in daily activities. Any unfair PBM practices that inhibit LTC pharmacy services or force them to close can be life-threatening for the hundreds of thousands of patients they serve daily.

An FTC study would be an important step in addressing PBMs’ flagrant exploitation of independent and specialty pharmacies. PBMs and related conglomerates are reaping enormous profits at the expense of independent pharmacies – retail, specialty, and long-term care – and to the detriment of competition and the American public. It is well past time for the FTC to act.”