Feb 14, 2022 - Health

FTC may probe pharmacy benefit managers

FTC Chair Lina Khan sits in a chair in front of Congress.
FTC chair Lina Khan has PBMs in her sights. Photo: Saul Loeb-Pool/Getty Images

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.

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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