As it continues a broad probe into the operations of pharmacy benefit managers, the Federal Trade Commission (FTC) has voted to rescind longstanding advocacy statements on this sector.
The commission voted 3-0 to pull the historical advocacy statements, according to an announcement from the agency, on the pretense that these previous positions no longer reflect the state of the market. The FTC said that rescinding these statements is in direct response to PBMs' reliance on them to push back against transparency or disclosure requirements.
The FTC "warns against reliance on the Commission’s prior conclusions, particularly given the FTC’s ongoing study of the PBM industry to update its understanding of the industry and its practices," according to the release.
The advocacy letters in question were issued between 2004 and 2014, and cautioned against proposals that would increase regulatory oversight of PBMs. The FTC added that a 2004 joint report with the Department of Justice and a 2005 FTC study, which are also used to push back against PBM reform, are also likely outdated.
"Until the FTC’s current PBM study is complete and previously issued materials can be reevaluated, the Commission discourages reliance on these advocacy letters and reports," the agency said in the release.
The commission launched an investigation into major PBMs last summer, issuing letters to six of the largest firms: CVS Caremark, Express Scripts, Optum Rx, Humana Pharmacy, Prime Therapeutics and MedImpact Healthcare Systems. This probe has expanded to include several major group purchasing organizations.
Pharmacy benefit managers have been a major target for reform in recent months, and a central concern is the level of concentration in the industry: both in terms of market share and integration with major payers. The three largest PBMs—Caremark, Express Scripts and Optum Rx—dominated 80% of the market.
They are also all integrated with large insurers; Caremark is a sister company to Aetna, Express Scripts is owned by Cigna and Optum Rx is a subsidiary of UnitedHealth Group.
The Pharmaceutical Care Management Association (PCMA), the industry's major lobbying firm, acknowledged that market dynamics have shifted in the industry over the years but said it doesn't agree "with their conclusion." It said it will continue to cite prior guidance and studies from the FTC in the absence of new guidelines.
“To be clear, pharmacy benefit companies support transparency that enables patients, their physicians, and health plan sponsors to make informed decisions on how best to manage prescription drug costs and empowers policymakers with information they need to make the right policy decisions to lower drug costs for all Americans," PCMA said in a statement.
“We are confident that the FTC examination of our industry will once again validate that pharmacy benefit companies are reducing prescription drug costs for employers and patients," PCMA said.