FTC’s Vote to Investigate PBMs is a Win for Patients and Pharmacists
Washington, D.C. — The American Economic Liberties Project today released the following statement applauding the FTC’s 5-0 vote today to commence its 6(b) study of the Pharmacy Benefit Manager (PBM) industry.
“With today’s vote, the FTC confirmed the agency will no longer provide cover to abusive pharmaceutical middlemen that take advantage of the American people,” said Zach Freed, Advocacy and Outreach Manager for the American Economic Liberties Project. “For the past two decades, states, congressional committees, and advocacy groups have gathered overwhelming evidence of the unfair and predatory tactics that PBMs use. All the while, the FTC has allowed PBMs to consolidate power through horizontal and vertical mergers, and actively discouraged state and federal regulation of the industry. PBMs drive up drug spending, weaken pharmacy networks and patient care, and cost taxpayers millions of dollars. We’re thrilled to see the FTC move forward with this urgently-needed study and look forward to future actions from the agency.”
PBMs are middlemen who process pharmaceutical benefits for Medicare, Medicaid, and other health insurance plans. In theory, health plans pay PBMs to bargain down the price of drugs and to reimburse pharmacies for patients’ prescriptions. In practice, however, PBMs often abuse their position as middlemen to drive up the cost of drugs, over-charge Medicare and Medicaid, and skim as much money as possible from independent pharmacies.
In May 2022, Economic Liberties submitted a comment letter to the FTC in response to its Request for Information on PBM business practices, urging the agency to move forward with an investigation of the industry. The letter describes the structural issues with the PBM industry, and catalogs the ways that PBMs abuse their business partners, patients, and taxpayers.
Read Economic Liberties’ comment letter to the FTC here.
Learn more about Economic Liberties here.
The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.