Lawmakers urged the FTC to release a new report on pharmacy benefit managers

A bipartisan, bicameral group of lawmakers has urged the Federal Trade Commission (FTC) to vote in favor of releasing an interim staff report on pharmacy benefit managers (PBMs).

Sense. Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.), Reps. Jake Auchincloss (D-Mass.) and Diana Harshbarger (R-Tenn.), including, wrote to the FTC in light of Tuesday’s opening of the commission’s meeting to consider issuing a second interim staff report on PBMs.

“PBMs were originally created to manage prescription drug benefits on behalf of health plans, negotiating directly with drug manufacturers and setting up pharmacy networks for their contracted payers,” the lawmakers wrote.

“But over the years, these once little-known middlemen have morphed into giant, vertically integrated conglomerates that control every link in the drug coverage and delivery chain, including pharmacies and health plans.”

The FTC opened its investigation into PBMs in 2022 Last year, the agency released its first interim staff report on PBMs, and it found that dominant, vertically integrated PBMs use their outsized market share to benefit patients and independent pharmacists.

FTC Chair Lina Khan said at the time that the report described how PBMs could “squeeze out the independent pharmacies that many Americans — especially those in rural communities — rely on for essential care” and “increase drug prices — including overcharging patients for cancer drugs.”

PBM reforms were included in earlier drafts of the government funding bill last month, but were ultimately dropped. The package includes a ban on linking PBM reimbursement to a drug’s Medicare list price, along with PBMs “passing 100 percent of drug rebates and discounts to the employer or health plan in full.”

A second staff interim report under consideration includes the findings of the FTC’s investigation into PBMs’ contracting practices.

The group of lawmakers who wrote to the FTC introduced legislation last month that would ban joint ownership of both PBMs and pharmacies, calling the practice a “gross conflict of interest.” They cited last year’s FTC report on the bill.

“We expect a second interim report to shed more light on the industry that will be invaluable to lawmakers as the policy priorities of the 119th Congress take shape,” they wrote.

“Accordingly, we urge the FTC to expeditiously issue its second interim staff report and continue to investigate the serious impacts of the PBM industry on patients, taxpayers and independent pharmacies.”

The FTC’s open commission meeting will be held at 11 a.m. EST Tuesday. Members of the public will be given time to address the commission.