The Federal Trade Commission (FTC) was deadlocked on a bid to study the contracting practices of pharmacy benefit managers (PBMs), meaning the study will not move forward despite fervent lobbying from pharmacists.
The FTC voted 2-2 on a motion to conduct the study into the competitive impact of contracts and related provisions such as reimbursement adjustments like direct remuneration fees (DIRs).
FTC Chair Lina Khan said the commission needed to investigate the practices as smaller and independent pharmacies are closing.
“This trend is especially concerning because community institutions can be superior at delivering to customers,” Khan said.
Khan specifically referenced clawbacks such as direct and indirect remuneration fees, which allow the PBM to take back money from the pharmacy after the point of sale. She added there have been other complaints about PBMs driving patients toward higher drug prices and PBMs steering patients to pharmacies that are part of the same vertically integrated company.
“Despite the agency’s limited resources, I believe it is vital to launch this study,” she said. “We have an imperative to tackle the sky-high drug prices and decline of independent pharmacies.”
The proposed study would have been a wide-ranging look at PBM contract practices but would not contain any law enforcement purpose.
However, commission members Christine Wilson and Noah Phillips were concerned over the proposed scope of the study.
“I am confident the FTC can create a study that employs a data-driven approach that drives empirical and objective examination of important questions about competition in the PBM industry,” Wilson said.
However, she cautioned, “I have observed previously that stakeholders frequently attempt to co-opt the government in their battle against rivals. I am wary of having the FTC used as a pawn to boost the profitability of certain sectors or insulate them from competition,” she added.
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Wilson called for a study design that is more objective. She added that Congress has introduced legislation to call on the FTC to study the PBM industry, including looking into issues on how quality or price may vary depending on whether a patient gets a prescription filled at a pharmacy affiliated with a PBM.
Pharmacy groups blasted the FTC’s narrow decision to not conduct the study.
“After hearing hours of testimony by community pharmacists and patients, all of whom painted the same shocking picture about PBM abuse, and not a single witness there to defend the PBM industry, it is inexplicable that two members of the commission could vote against the study,” said Douglas Hoey, CEO of the National Community Pharmacists Association, in a statement.
The Pharmaceutical Care Management Association, which represents the PBM industry, has previously said that DIR is not a clawback of payments to pharmacies and that the industry is able to negotiate with drug companies for lower drug prices for employers.
"PBMs are holding drug companies accountable by relentlessly negotiating a lowest possible cost on behalf of patients," the PCMA said in a statement to Fierce Healthcare.