FTC Review of PBMs

The Federal Trade Commission (FTC) aims to promote competition, educate consumers, and protect them from unfair business practices. In mid-2022, the FTC announced that they will be investigating records from six of the largest pharmacy benefit managers (PBMs) to understand how they operate their businesses. Under section 6(b) of the Federal Trade Commission Act, the FTC has the power to conduct studies without a specific law enforcement purpose. The PBMs to be investigated include Express Scripts, CVS Caremark, OptumRx, Prime Therapeutics, Humana, and MedImpact Healthcare Systems. PBMs collaborate with a variety of pharmaceutical industry sectors including drug manufacturers, insurers, and pharmacies. They negotiate prescription drug costs, develop drug formularies, and contract with pharmacies to dispense medication to patients.

An initial inquiry began on February 11, 2022, when the Commission voted on the proposal to launch a study into PBM practices. The intent was to look at information related to rebates, pricing policies, and fees. The result was a split 2-2 vote. On February 25, 2022, the FTC requested public comments on the impact of PBM practices. The comment period remained opened for 60 days, ending on April 25, 2022. During that time, the FTC received over 24,000 comments.  On June 7, 2022, the FTC voted 5-0 to proceed with the inquiry. As a result, the six largest PBMs will have 90 days from the date they receive an order to provide their records from the previous 5 years. How the PBMs will respond is yet to be determined. The FTC expects this study will identify the PBM’s role in the prescription drug market and their impact on patients, physicians, employers, pharmacies, and payers. The FTC hopes that this study will reveal and further elucidate the numerous practices that PBMs are involved in such as prior authorizations, specialty drug policies, audits, and formulary design.

The FTC will be requesting the following information from PBMs:

  • Pharmacy Networks and Reimbursement
    • Top drugs by sales, by prescription volume, specialty drugs, and rebated drugs
    • Post-sale adjustments
    • Development of pharmacy networks
    • Audits of pharmacy networks
  • Formularies
    • Prior authorization resolution times and rates
    • Situations when brands are favored over generics
    • Rebated drugs

According to the FTC announcement, the goal of the inquiry is to gain a deeper understanding of PBM practices including fees and clawbacks charged to pharmacies, potential steering of patients to PBM-owned pharmacies, audit practices, prevalence of prior authorizations and other restrictions, and the impact of rebates and fees on formulary design and costs to payers and patients.

This study is being conducted without a specific law enforcement purpose.  The PBMs could be penalized for omitting requested information or falsifying reports.

PHSL expects PBMs to submit terabytes of information to the FTC.  It is unknown how long the analysis by the FTC will take. What will the FTC reveal from this inquiry?  How will that impact PBMs, patients, payers, and pharmacies?


Pharmacy Benefit Managers Practices Controversies What Lies Ahead | Commonwealth Fund

FTC Launches Inquiry Into Prescription Drug Middlemen Industry | Federal Trade Commission

In Reversal, FTC Launches Inquiry Into PBM Industry (ajmc.com)

FTC’s PBM Study Signals Broader Federal Scrutiny of the Prescription Drug Sector | Epstein Becker & Green – JDSupra


Posted: October 2022

Leave a Reply