The Federal Trade Commission (FTC) is expanding its probe into pharmacy benefit managers by issuing compulsory orders to two group purchasing organizations that negotiate rebates on behalf of PBMs.
The FTC said late Wednesday that the orders will require Zinc Health Services and Ascent Health Services to provide key details and information on their business practices. Last summer, the agency sent similar orders to the six largest PBMs in the country: CVS Caremark, Express Scripts, Optum Rx, Humana Pharmacy Solutions, Prime Therapeutics and MedImpact Healthcare Systems.
Zinc operates as the GPO for Caremark, while Ascent provides similar services to Express Scripts, Prime Therapeutics, Humana Pharmacy Solutions and Envolve Pharmacy Solutions, the FTC said.
The FTC said its "inquiry is aimed at shedding light on several PBM practices" including clawing back funds from unaffiliated pharmacies, steering patients toward PBM-owned pharmacies and negotiating rebates and fees with drugmakers that may "skew the formulary incentives" and drive up drug prices.
PBMs have been in the hot seat of late as policymakers aim to bring down rising drug costs in the U.S. Last week, the heads of the three largest pharmacy benefit managers were grilled by legislators about their business practices as well as vertical consolidation within the industry.
Caremark, Express Scripts and Optum account for 80% of the PBM market, and all three are integrated with large national health plans: Aetna, Cigna and UnitedHealthcare, respectively. These massive companies also own GPOs, providers, data analytics and more.
At a hearing Wednesday in the House, Ways and Means Committee Subcommittee on Health Chairman Vern Buchanan, R-Florida, dinged the FTC for not intervening as vertical consolidation became the norm in the insurance space. He called vertical integration in healthcare "one of the worst examples of consolidation over the last few years."
“While the FTC allows these mergers to occur since they’re in different areas of healthcare, they’re no less problematic—they result in fewer options for patients and reduced competition," he said.
Multiple bills targeting PBMs are in the works in Congress. Last week, the Senate Health, Education, Labor and Pensions Committee approved legislation that aims to add additional transparency into the market and would ban controversial spread pricing practices.
In the release, the FTC noted that independent pharmacies have repeatedly raised concerns about PBMs.
"PBMs also have substantial influence over independent pharmacies, which have collectively voiced concern that PBMs negotiate and leverage contractual terms with these pharmacies that are confusing, unfair, arbitrary, and harmful to their businesses," the FTC said in the announcement.