Leaders of the House Energy and Commerce Committee have requested the Federal Trade Commission (FTC) to determine whether three mergers among the industry's largest pharmacy benefit managers have brought down healthcare costs.
In a letter (PDF) to FTC Commissioner Joseph Simons, Reps. Greg Walden (R-Ore.), Michael Burgess, M.D. (R-Tex.) and Gregg Harper (R-Miss.) requested the agency conduct a retrospective analysis of consolidation among pharmacy benefit managers to measure the effectiveness of past enforcement and the impact on downstream healthcare costs.
The three largest PBMs—UnitedHealthcare’s Optum Rx, CVS Caremark and Express Scripts—accounted for 70% of market revenues in 2016, in part because of several significant mergers over the last decade. CVS Health bought Caremark in 2007, Express Scripts bought Medco Health Solutions in 2012 and UnitedHealth bought Catamaran in 2015.
Those three mergers were worth $68.3 billion combined.
But the lawmakers pointed to conflicting information about their impact, including some research that shows PBMs may have used their market power to encourage higher list prices, increasing patient copays. During a February hearing before the committee, policy experts suggested a retrospective analysis would help solidify answers to lingering questions about PBMs.
“The Commission believes that the FTC should conduct a retrospective review of past PBM merger to help improve our understanding of the impact of consolidation in the PBM industry and whether past enforcement has been effective,” the lawmakers wrote.
Simons also previously told lawmakers he hoped to establish a retrospective program to analyze merger enforcement, including in the PBM industry. The lawmakers asked Simons to confirm the agency plans to conduct the study by Aug. 10.