About F%$#ing Time

It looks like Lina Khan and the FTC are going after pharmacy benefits managers. (PBMs)

I knew that this would happen eventually.  PBMs are gatekeeping parasites.

Firms that serve as intermediaries to negotiate and control prescription drug access in the US "wield enormous power," largely with "extraordinarily opaque" business practices, and may be "inflating drug costs and squeezing Main Street pharmacies" for profit, according to a searing interim report released Tuesday by the Federal Trade Commission.

Amid a national focus on America's uniquely astronomical drug costs, the FTC is taking aim at firms that largely work deep in the bowels of the country's labyrinthine health care system, well hidden from public understanding and scrutiny: pharmacy benefit managers (PBMs).

PBMs were initially hired by various payors—employers, health insurance companies, government health plans, and others—to manage prescription drug benefits through various plans. But PBMs have evolved over the years to also negotiate rebates from drugmakers, set reimbursements for dispensing pharmacies, and develop drug formularies (the list of drugs that a health plan covers.) While those functions alone grant PBMs a large amount of power, consolidation and integration over recent years has concentrated that power in troubling ways, according to the FTC report.

………

In the FTC's investigation so far, the commission found evidence that PBMs are steering people toward their affiliated pharmacies—hurting small, independent pharmacies—and allowing their affiliated pharmacies to rake in payments "grossly in excess" of average drug costs. For instance, for two generic cancer drugs (one for prostate cancer and the other for leukemia), pharmacies affiliated with the top three PBMs collectively raked in nearly $1.8 billion in revenue from 2020 to 2022. That represents an excess of revenue of $1.6 billion dollars over the national average cost for the drugs. In other words, pharmacies not affiliated with the top PBMs would have otherwise seen revenue of under $200 million for the same drug dispensing.

Further, the FTC found evidence that big PBMs and big brand pharmaceutical companies make agreements to exclude cheaper drugs made by a rival manufacturer from a PBM's drug formulary in exchange for certain pricing and rebates.

Burn all the PBMs to the ground.