PBMs tout robust competition in market as FTC orders more documents for review

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Two more pharmacy benefit managers (PBMs) must send their business records to the U.S. Federal Trade Commission (FTC).

Meanwhile, PBMs said the most recent data shows robust competition in that industry.

The developments were some of the latest this week in the continuing national discourse on how to tackle high drug prices and foster competition in health care.

FTC demands documents

The FTC has issued compulsory orders to Zinc Health Services, LLC, and Ascent Health Services, LLC, two group purchasing organizations (GPOs) that negotiate drug rebates on behalf of other PBMs. Zinc was founded in 2020 and operates as the GPO for CVS Caremark. Ascent was founded in 2019 and operates as a GPO for Express Scripts, Prime Therapeutics, Envolve Pharmacy Solutions, and Humana Pharmacy Solutions.

Those orders follow similar compulsory orders issued in June 2022 to the six largest PBMs: CVS Caremark; Express Scripts, Inc.; OptumRx, Inc.; Humana Pharmacy Solutions, Inc.; Prime Therapeutics LLC; and MedImpact Healthcare Systems, Inc.

The Commission’s continuing inquiry “is aimed at shedding light on several PBM practices, including charging fees and clawbacks to unaffiliated pharmacies; steering patients towards PBM-owned pharmacies; potentially unfair auditing of unaffiliated pharmacies; the use of complicated and opaque pharmacy reimbursement methods; and negotiating rebates and fees with drug manufacturers that may skew the formulary incentives and impact the costs of prescription drugs to payers and patients,” according to the FTC.

Zinc Health Services and Ascent Health Services have 90 days to respond.

PBMs examines the market

This month, PCMA published “The PBM Marketplace is More Competitive, Not Less,” an online summary of PCMA President J.C. Scott’s interview with Jason Borschow, ECO of Abarca, and Mike Ellis, CEO of Maxor National Pharmacy Services, two PBMs.

Contrary to popular belief of a few PBMs dominating the market, there are 73 full-service pharmacy benefit companies operating, including six that are new since 2021, according to PCMA.

That figure was up from 66 in 2019. PCMA noted the current total of 73 accounts for new PBMs; the loss of some PBMs due to and mergers and acquisitions; and some PBMs expanding duties to be counted as “full service” companies.

“One big takeaway from these numbers is how dynamic the pharmacy benefit company marketplace is both changing and expanding,” the PCMA analysis said. “New companies entering the market create additional competitors and help drive innovation. Not all pharmacy benefit companies are the same. They distinguish themselves through the choices they offer to payers and patients. But what they all have in common is securing affordable and accessible prescription drugs for employers, labor unions, governments, payers, patients, and taxpayers.”

The PCMA online summary was written for the Rx Research Corner blog written by the association’s research team.

Stifling drug competition?

The FTC also announced this week it would sue to stop pharmaceutical company Amgen Inc. from acquiring Horizon Therapeutics PLC. The federal agency said “the deal would allow Amgen to leverage its portfolio of blockbuster drugs to entrench the monopoly positions of Horizon medications used to treat two serious conditions, thyroid eye disease and chronic refractory gout,” according to its news release.

The drugs at issue are Tepezza, for thyroid eye disease, and Krystexxa, for chronic refractory gout. Neither has any competition in the pharmaceutical marketplace.

“Rampant consolidation in the pharmaceutical industry has given powerful companies a pass to exorbitantly hike prescription drug prices, deny patients access to more affordable generics, and hamstring innovation in life-saving markets,” FTC Bureau of Competition Director Holly Vedova said in a news release.

The lawsuit “sends a clear signal to the market: The FTC won't hesitate to challenge mergers that enable pharmaceutical conglomerates to entrench their monopolies at the expense of consumers and fair competition,” Vedova said. It was “the FTC’s first challenge to a pharmaceutical merger in recent memory,” she added.