WASHINGTON – Sen. Chuck Grassley (R-Iowa) today welcomed the Federal Trade Commission (FTC)'s interim staff report on opaque pharmacy benefit manager (PBM) practices. The interim report is a direct result of Grassley’s request for a 6(b) study on potential anti-competition in the prescription drug industry, as well as his bipartisan demands for a status update in light of FTC’s significant delays.

"This interim report from the FTC is a step towards improving PBM transparency and accountability, which Congress and consumers alike are calling for. The data FTC has collected so far appear to confirm my concerns about concentration and possible anti-competition in the PBM industry – both of which harm independent pharmacies and hike prices patients have to pay for medications they need. That said, I’m not lifting my foot off the gas,” Grassley said. "The FTC says it’s committed to completing this review in a timely manner, and you can bet I’ll be holding the commission to its promise. At the same time, Democratic Leader Schumer ought to listen to the bipartisan majority of the Senate and take action on the bills my colleagues and I have shepherded through committee to shine light on shady PBM operations.”

Background:

Grassley more than five years ago pressed the FTC to review PBMs’ role in determining prices for prescriptions like insulin [in 2021, he conducted a bipartisan insulin investigation through the Senate Finance Committee, which FTC cites on page 66 of its interim staff report]. At Grassley’s persistent urging, the commission finally launched a 6(b) inquiry in June 2022. He and his bipartisan colleagues pushed the FTC to complete its study in October 2022 and, again recently, at its 18-month mark in January.

In today’s interim staff report, FTC blames its failure to produce 6(b) findings on PBMs’ unwillingness to provide key documents. With the information it has collected, the commission confirms just three PBMs control nearly 80 percent of the market, consistent with existing data. Regarding PBM impacts on rural pharmacies, FTC notes between 2013 and 2022, one in 10 independent retail pharmacies in rural America shuttered their doors. A top priority of Grassley’s, which he continues to advance as a senior member and former chairman of the Senate Finance Committee, is to preserve rural patients’ access to their local pharmacies.

Finally, data in FTC’s interim report seem to substantiate Grassley’s assertions that consolidation and vertical integration in the PBM industry are fueling anti-competitive conduct – examples highlighted in the interim report include steering, unfair contracting, inflating pricing, pushing larger rebates and sidelining lower-priced generics. Such conduct disadvantages independent and rural pharmacies and keeps drug costs high for patients.

Committee-Passed, Grassley-Led PBM Measures:

  • The Prescription Drug Pricing for the People Act would require the FTC to study anti-competitiveness in the health care industry and report back to Congress. It passed the Senate Judiciary Committee in February 2023. 
  • The PBM Transparency Act would authorize the FTC to hold PBMs accountable for unfair or deceptive practices. It passed the Senate Committee on Commerce, Science and Transportation in March 2023.  
  • A legislative package, as well as a separate amendment, would strengthen PBM oversight mechanisms from multiple angles. The legislation passed the Senate Finance Committee in July 2023 and November 2023, respectively. 
  • The Patient Right to Shop Act would expand Americans’ insight into prescription drug costs. It passed the Senate Health, Education, Labor and Pensions Committee in May 2023.

About PBMs:

PBMs manage every aspect of the prescription drugs benefit process – from setting prices, to deciding which drugs insurance plans cover and how they’re dispensed. Despite PBMs’ sweeping influence, neither Congress nor the taxpayer has adequate visibility into their operations. Grassley's efforts to pull back the curtain on PBMs will help identify causes for skyrocketing prescription drug costs, as well as solutions to curtail them. 

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