Drug middlemen inflate US costs, squeeze out competitors, FTC says

 Lina Khan, chair of the Federal Trade Commission (FTC), testifies before the House Appropriations Subcommittee at the Rayburn House Office Building on May 15, 2024, in Washington, DC.

Enlarge / Lina Khan, chair of the Federal Commerce Fee (FTC), testifies earlier than the Home Appropriations Subcommittee on the Rayburn Home Workplace Constructing on Might 15, 2024, in Washington, DC. (credit score: Getty | Kevin Dietsch)

Companies that function intermediaries to barter and management prescription drug entry within the US “wield monumental energy,” largely with “terribly opaque” enterprise practices, and could also be “inflating drug prices and squeezing Principal Road pharmacies” for revenue, in keeping with a searing interim report launched Tuesday by the Federal Commerce Fee.

Amid a nationwide concentrate on America’s uniquely astronomical drug prices, the FTC is taking goal at companies that largely work deep within the bowels of the nation’s labyrinthine well being care system, effectively hidden from public understanding and scrutiny: pharmacy profit managers (PBMs).

PBMs had been initially employed by numerous payors—employers, medical health insurance corporations, authorities well being plans, and others—to handle prescription drug advantages by means of numerous plans. However PBMs have advanced over time to additionally negotiate rebates from drugmakers, set reimbursements for allotting pharmacies, and develop drug formularies (the listing of medicine {that a} well being plan covers.) Whereas these capabilities alone grant PBMs a considerable amount of energy, consolidation and integration over current years has concentrated that energy in troubling methods, in keeping with the FTC report.

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