Two key senators are urging the Federal Trade Commission (FTC) to investigate "co-manufacturing" arrangements that they fear pharmacy benefit managers may be using to stymie competition.
Sen. Ron Wyden, D-Oregon, chair of the Senate Finance Committee, as well as committee member Sherrod Brown, D-Ohio, wrote a letter (PDF) to the FTC on Tuesday expressing concern about units formed recently at two major PBMs that seek to manufacture biosimilars that challenge high-cost branded drugs.
CVS Health unveiled its Cordavis unit in August 2023, and its first partnership is with drugmaker Sandoz on its Hyrimoz drug, a biosimilar for Humira. Cigna's Evernorth has formed a private label distributor called Quallent Pharmaceuticals, also with the purpose of bringing biosimilars to market.
In the letter, the senators say the PBMs contribute consulting services in these partnerships with manufacturers but are not participants in the actual production of the drugs. As such, they said there's a risk that PBMs could take advantage of these co-manufacturing arrangements to reduce competition.
For example, they could manufacture a biosimilar product through one of these divisions, set an unfairly high price and then steer patients toward it, the senators argue. When it announced Cordavis, CVS said Hyrimoz would have a price 80% lower than Humira.
“The concern with these ‘co-manufacturing’ agreements is that they are a veiled attempt by PBMs to control additional parts of the supply chain which has resulted in additional harm to consumers in the form of fewer drug choices and higher drug costs,” the senators wrote.
“We urge the FTC to examine new PBM tactics that appear to create further barriers to competition and harm the ability of consumers to access lower cost prescription drugs," they continued. "It is important we keep a watchful eye on the evolving tactics of PBM megafirms as they proceed with owning more and more of the prescription drug supply chain.”
The FTC kicked off an investigation into the business practices of major PBMs two years ago and released an interim report based on that analysis in July. In mid-September, the agency sued the largest firms over the role they play in rising insulin prices.
Regulating the PBM market has been a hot topic on the Hill for several years, but a number of bills have stalled in Congress.