A couple of weeks ago, that there were these obscure middlemen that were using information advantages and concentrated control of pharmaceutical markets to raise prices. The was about seven years late, , on warning about the dangers of pharmacy benefit managers, or PBMs. But the series got launched just before the Federal Trade Commission released preliminary results of its ongoing investigation into PBMs, enabling the paper to write a kind of “told you so” of the FTC’s interim report.
In fact, the FTC has been studying PBMs for two years, starting with requests for information from the leading companies. They predictably delayed and obstructed in response; the report threatens to take the PBMs to court to compel information. But there’s enough available data for the agency to draw some initial conclusions in their .
The story told is quite familiar to readers. The three leading PBMs control about 80 percent of the market for filling prescriptions; all three have aligned with insurance companies (Express Scripts/Cigna, CVS Caremark/Aetna, Optum Rx/UnitedHealth). They also own their own mail order and specialty pharmacies, and CVS is a major pharmacy chain.
Through UnitedHealth and CVS, health clinics are connected to PBMs. This vertical integration plays out in familiar ways. Once pitched as a way to lower drug costs, PBMs now sit in between health plans, drug companies, dispensing pharmacies, and patients, negotiating prices with drug manufacturers and managing where.