BESSEMER, Ala. (September 18, 2023) – The federal government must do more to prevent further integration between pharmacy benefit managers (PBMs) and insurers, American Pharmacy Cooperative, Inc. (APCI), wrote today.
In comments sent to the U.S. Department of Justice and Federal Trade Commission Joint Agencies, APCI commended proposed improvements to merger guidelines but also urged the agencies to investigate PBM and insurer practices that reduce access to medications, restrict patient choice and increase the costs of prescriptions.
Community pharmacy has previously raised concerns that traditional merger analysis under existing antitrust laws have failed to prevent PBMs/insurers from integrating horizontally and vertically. In its comments, APCI highlighted key federal reports released in the past eighteen months that validate these concerns. The co-op also stressed that the federal government can and should scrutinize PBM practices for unfair methods of competition in violation of Section 5 of the FTC Act. Such action by the government would be a powerful tool to prevent mergers that allow PBMs/insurers to leverage bad practices.
“If Section 5 of the FTC Act does not figure centrally into the Joint Agencies factors and frameworks, APCI believes PBMs/insurers will continue to integrate in a way that negatively affects competition and allows PBMs/insurers to leverage unfair methods of competition that drive up drug prices, reduce access to medications, reduce access to providers, and self-deal,” the letter states.
“Unless PBM and insurer practices are reviewed for unfair methods of competition in merger investigations, PBM acquisitions will continue to slip through the cracks and allow PBMs and insurers to further erode the foundations of America’s healthcare system,” said APCI’s General Counsel and Director of Healthcare Policy Greg Reybold. “That is why Section 5 of the FTC Act should be front and center in all PBM and insurer involved mergers and in the finalized Merger Guidelines themselves.”
As an example of the role Section 5 of the FTC Act can play in merger analysis, APCI’s comments focused in on PBM rebate practices and their implications to PBMs.
“PBMs/insurers already possess a stunning degree of control over the availability of prescription drugs including designing exclusionary formularies, requiring step therapy and prior authorizations, withholding coverage for certain drugs, and mandating brand name drugs when cheaper generics are available,” the letter stated. “The implications to PBMs/insurers also possibly controlling what drugs may even be prescribed by physicians and other prescribers are chilling.
“While traditional methods of merger analysis and the draft guidelines may fail to identify such a threat, Section 5 of the FTC Act provides the tools necessary to evaluate and stop such threats to competition when they represent unfair methods of competition,” APCI’s comments concluded.
“The DOJ and the FTC need every tool at their disposal when investigating mergers involving PBMs and insurers -- and Section 5 of the FTC Act has to be one of the tools in their toolbox,” said APCI CEO Tim Hamrick. “It will help them identify and stop PBM acquisitions that perpetuate unfair methods of competition and protect pharmacies and their patients.”
About APCI
APCI is a cooperative of more than 1,600 independently owned community pharmacies in 31 states. Established in 1984 and headquartered in Bessemer, Ala., APCI is recognized as a leader in the fight for prescription drug pricing transparency and reform.