Pharmacy benefit managers (PBM) have been making headlines all week and the attention seems like it will continue to grow.
On Wednesday afternoon, The Wall Street Journal reported that the Federal Trade Commission (FTC) is gearing up to sue the three largest PBMs — UnitedHealth Group’s OptumRx, Cigna Group’s Express Scripts and CVS Health’s Caremark — over their tactics for negotiating prices for drugs including insulin.
While OptumRx and Express Scripts didn’t respond to the outlet, CVS defended Caremark’s track record in a statement.
PBMs have long been the subject of scrutiny from federal officials, agencies, drugmakers and other healthcare stakeholders. Of note, those three PBMs account for 80% of U.S. prescriptions and are owned by a company that has an insurer arm.
These controversial entities have been charged by critics as contributing to the high prescription drug prices felt by consumers and felt heat from both sides of the aisle.
These criticisms came to a head last year when executives from OptumRx, Express Scripts and CVS testified in front of the Senate Health, Education, Labor, and Pensions (HELP) Committee over the affordability of insulin.
During the contentious public hearing alongside drugmaker executives, PBMs fought off criticisms of their respective business models, much to the consternation of some HELP Committee members.
One of the key moments from the hearing was when Sen. Markwayne Mullin, (R-OK.), claimed PBMs are rebating themselves because they are owned by large health insurers and suggested shutting them down entirely due to their perceived ineffectiveness.
Notably, the potential regulatory action from the FTC comes days after the federal agency released a report that underscored how PBMs “exercise vast control” over healthcare.
While the report stopped short of calling for antitrust action and instead highlighted how PBMs’ operations warranted additional investigation and potential legislation, the FTC is now reportedly prepared to file lawsuits against PBMs regarding these business practices.
Not one to miss an opportunity amid this heightened scrutiny in Washington, D.C., a trade association representing community pharmacists has launched an ad campaign targeting the industry’s so-called middlemen.
On Monday, the National Community Pharmacists Association (NCPA) released a minute-long TV commercial playfully skewering the role of PBMs.
The ad takes place in a children’s classroom, where a PBM executive struggles to explain his job at career day.
The executive tells the children that he “decides what medications doctors can prescribe” to their parents and grandparents as well as “how much they pay for it.”
He makes sure to clarify to the children that he isn’t a doctor, pharmacist or drug manufacturer.
Unable to fully understand his role, the children continue to question him and he ultimately concludes that he is the “middleman” of the industry, before gushing about the billions of dollars PBMs each year.
Titled “PBM Career Day,” the ad is running nationally on CNN.
This is the latest salvo in an ongoing war of ads between PBM trade groups and associations representing pharmacists and drug manufacturers.
The ad campaign’s goal is to garner national support for continued legislative reform of PBMs groups, an effort that has enjoyed bipartisan support on Capitol Hill.
“PBMs and the massive health insurance companies that they’re affiliated with extract billions in profits from patients and pharmacies worsening pharmacy deserts for consumers and snuffing out small businesses,” NCPA CEO B. Douglas Hoey said in a statement. “Our campaign is designed to shed light on these practices, mobilize the public to demand change, and push policymakers to finish the fight for PBM payment reforms. It is time for transparency and accountability in the health care system.”
Senior Editor Jack O’Brien contributed to this article.
For a July 2024 article on lawmakers targeting PBMs over anticompetitive practices, click here.
