Pharmacy groups say the Federal Trade Commission (FTC) must step in to crack down on pharmacy benefit manager practices such as clawback fees in the latest salvo to ratchet up pressure for the federal government or Congress to scrutinize the industry.
Comments were due Wednesday on a request for information from the FTC on PBM practices and their impact on physicians, patients and other stakeholders. The agency said it is studying a wide array of PBM practices that include unfair or anticompetitive contract talks.
Several pharmacy and payer advocacy groups weighed in.
“What has become apparent during the increase of control and authority of PBMs in the prescription drug market, is that when PBM activity negatively impacts independent pharmacies, it also negatively impacts consumers,” according to comments from the National Community Pharmacists Association.
The group noted that the PBM market is dominated by three large companies—CVS Caremark, Express Scripts and OptumRx—which are also vertically integrated with the major insurers Aetna, Cigna and UnitedHealth Group.
Pharmacy groups have long called for reforms on certain PBM practices, chief among them steering patients away from independent pharmacies to affiliated specialty pharmacies or mail-order and retail facilities.
“PBMs create arbitrary lists, such as specialty and aberrant drug lists to limit independent pharmacies’ access to patients,” the comments said. “These lists require patients to obtain certain drugs from a PBM-affiliated pharmacy.”
Other tactics include requiring a patient to get a refill from a PBM-affiliated pharmacy instead of the one used for the initial prescription.
The group charged that PBMs have used tactics such as direct and indirect remuneration fees where a PBM claws back portions of the amount it reimbursed the pharmacy for a drug.
“The clawback creates a situation where the independent pharmacy has no ability to know the amount the PBM will reimburse it for dispensing the drug,” the group said.
It added that while an independent pharmacy must pay such DIR fees, a PBM-affiliated pharmacy doesn’t either have to pay the fee or, “if they do, they have transparency into the fees and can financially plan for them,” the comments said.
Some provider groups also called for reforms surrounding PBMs and the 340B drug discount program, where drug companies offer discounts to safety-net providers in exchange for participation in Medicare and Medicaid.
Family Health Centers, a collection of nonprofit health centers, commented that PBMs have created a “number of aggressive business practices to steal our 340B savings and increase their profit margins.”
The group added in comments that PBMs will intentionally reimburse 340B pharmacies “at lower rates than non-340B pharmacies for prescription drugs simply because health centers receive a 340B discount.”
The centers said they have little negotiating power with PBMs since they cannot lose access to the organization’s network.
But the Pharmaceutical Care Management Association (PCMA), which represents PBMs, said that there have been “many misunderstandings or misperceptions regarding PBMs’ business practices.”
“PBMs can achieve economies of scale that benefit consumers, and PBM services allow health plans and plan sponsors to avoid expending the significant resources needed to manage prescription drug benefits reliably and efficiently,” the comments said.
The organizations can, for example, incentivize the dispensing of generics and cheaper brand-name drugs via formularies and can emphasize management tools such as prior authorization and step therapy to manage costs.
PCMA also pushed back on pharmacy criticisms of its contracting practices, noting that PBMs “do not and cannot dictate contract terms to pharmacies.” The group added that PBMs negotiate manufacturer rebates and pharmacy discounts intended to steer patients toward lower-cost generics or biosimilars.
“PBMs typically pass rebates onto health plans and plan sponsors, and it is up to the plans to decide how to use them, whether by offsetting the need for increased premiums or reducing members’ out-of-pocket costs such as co-pays or coinsurance,” the comments added.
PBM rebates, however, have received regulatory scrutiny in recent years. The Trump administration issued a final rule in late 2020 calling for the removal of a safe harbor for Medicare Part D drug rebates, leaving PBMs and insurers open to prosecution under federal anti-kickback laws. The rule, which has been delayed by the Biden administration, would create a new safe harbor for discounts offered at the point of sale.
PCMA also noted that it uses pharmacy DIR as pay-for-performance incentives and other quality measures.
It remains unclear what the FTC’s next steps will be. The agency deadlocked 2-2 earlier this year on whether to investigate PBM contracting practices.
The PBM industry could face pressures from other areas, though. A bipartisan bill recently introduced in the Senate would boost FTC powers to go after PBMs and ban several practices such as DIR fees. The Centers for Medicare & Medicaid Services has also recently finalized a rule that prohibits DIR fees in Medicare Advantage plans.