Senior Care Pharmacy Coalition Applauds Federal Trade Commission Vote to Investigate Pharmacy Benefit Managers, Introduction of The Pharmacy Benefit Manager Transparency Act of 2022 by Senators Grassley and Cantwell￼
Actions Vindicate SCPC Comments to the Federal Trade Commission Regarding PBM Practices
The Senior Care Pharmacy Coalition (SCPC), the only Washington-based organization exclusively representing the interests of long-term care (LTC) pharmacies applauds the Federal Trade Commission (FTC) for yesterday’s decision by to investigate Pharmacy Benefit Managers (PBMs) and the vertically integrated health care conglomerates which own them. The Commissioners voted unanimously to initiate the investigation, a long-overdue step to protect consumers, competition, and independent LTC pharmacies from abusive and anti-competitive business practices of PBMs and their corporate masters.
The FTC action comes less than a month after Senators Chuck Grassley (R-IA) and Maria Cantwell (D-WA) introduced the Pharmacy Benefit Manager Transparency Act of 2022.This legislation seeks to provide greater disclosure of opaque PBM business practices so that the public better understands the anticompetitive impact of PBM practices have on the country’s health care system, and so policymakers are better able to act. SCPC thanks Senators Grassley and Cantwell for their leadership on these issues.
In the run up to yesterday’s FTC vote, the Commission received more than 24,000 comments expressing criticisms and concerns regarding PBM practices, including SCPC’s detailed analysis of the impact on LTC pharmacies and the millions of Americans who need LTC and related services. The FTC’s decision to investigate PBMs vindicates SCPC’s comments and concerns. In the comment letter, SCPC President and CEO, Alan Rosenbloom, calls on the FTC to use its authority to prohibit arbitrary, unfair, or deceptive PBM practices by enforcing the antitrust laws compatible with the Federal Trade Commission Act (FTC Act) and the Clayton Act. The decision to investigate PBMs is an essential first step.
PBMs impose anti-competitive barriers that restrict patient access to high-quality care and services from specially trained health care professionals like those at LTC pharmacies. Just three PBMs dominate the pharmaceutical market, processing 80% of prescriptions delivered to Americans in 2021. For LTC pharmacies, this market concentration is even higher. Each PBM is a part of a larger health care 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.
LTC pharmacies have a unique perspective on PBM issues because they serve patients with LTC needs, a group that is not confined to LTC facilities and that relies overwhelmingly on Medicare to pay for their drugs. They rely heavily on prescription drugs, with older adults who need LTC averaging 12-14 prescription medications a day. These individuals are medically complex, suffer multiple chronic conditions, have extensive impairments in daily activities, and benefit from the enhanced services LTC pharmacies provide. Unfortunately, PBM practices often prevent this group from accessing the enhanced services that LTC pharmacies provide.
The SCPC commentary underscores the need to look beyond PBMs to the conglomerates of which they are a part. Because PBMs hold such influence over the drugs for which insurers will pay, they wield tremendous power that benefits their affiliated pharmacies to the detriment of independent LTC pharmacies, competition, and especially consumer access, quality, and cost. While the FTC’s investigation and the Grassley-Cantwell legislation are promising developments, more must be done. SCPC urges Congress and the FTC to continue scrutiny of PBMs’ unfair and anti-competitive practices, and especially to act once the investigations conclude.
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