Pharmacists and Manufacturers Rip PBM Practices

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Manufacturers are aligning with pharmacists and providers to blame high drug costs and limited patient access on pharmacy benefit managers.

As policy makers and consumer advocates continue to demand reductions in prescription drug prices, manufacturers are aligning with pharmacists and providers to blame high drug costs and limited patient access on pharmacy benefit managers (PBMs). The charges range from using formularies to curb the use of important but expensive medicines, to requiring lengthy procedures for patients to gain coverage of costly treatments. Makers of generic drugs and biosimilars, moreover, claim that PBMs encourage consumers to use more expensive brand drugs that are more profitable to the plans, even though these tactics harm competition and undermine efforts to develop less costly medicines. New legislation from leading Senators aims to address these concerns, while the Federal Trade Commission (FTC) is moving to launch a broader investigation of PBM practices.

With Democrats now controlling FTC’s agenda, the Commission has solicited comments from stakeholders on how the growth in PBM formulary exclusions can limit patient access to medicines. The three leading PBMs—CVS Caremark, Cigna/Express Scripts, and UnitedHealth/OptumRx—manage about 80% of drug benefit plans offered by insurers and health plans and raise concerns among policy makers that excessive market concentration enables the middlemen to control drug coverage and reimbursement, as spelled out in the FTC’s request for public comment on this issue.

Independent pharmacists are leading the charge with a call for attention to how PBMs, working with big pharmacy chains, reduce reimbursement and steer patients away from smaller pharmacies. The National Community Pharmacists Association (NCPA) has called on the FTC to investigate these activities and to initiate legal action against PBMs for certain unfair or deceptive business practices.

Leading medical groups similarly blame PBMs for limiting patient access to vital medicines through formulary tiering practices and coverage policies. The American College of Rheumatology has been vocal in calling for legislation to require PBMs to pass on negotiated savings to patients, instead of retaining high rebates and fees. And the American Hospital Association cites PBM “white bagging” programs that require cancer patients to obtain a treatment for infusion in a clinic from a separate specialty pharmacy.

Meanwhile brand manufacturers point to formulary exclusions that steer patients to select drugs from firms offering steep discounts and high rebates, while limiting coverage of many innovative but expensive therapies. The Pharmaceutical Research and Manufacturers of America (PhRMA) cites a recent report from the Xcenda arm of major drug distributor AmerisourceBergen, which presents data on how leading PBM formularies exclude access to more than 1000 medicines, leaving patients with limited and more expensive treatment options. PhRMA further notes that PBMs often exclude access to less costly insulins in favor of higher priced versions that offer large rebates to the plans.


Members of Congress have proposed a range of measures to limit these and other PBM programs. The latest comes from Sens. Maria Cantwell (D-Wash) and Chuck Grassley (R-IA), who are co-sponsoring a bill to limit “spread pricing” and other PBM practices seen to affect competition in the marketplace. A main provision in their Pharmacy Benefit Manager Transparency Act of 2022 would prevent PBMs from charging health plans and payers more for a drug than what they reimburse the pharmacy. Additional sections would block spread pricing and “claw backs” of payments to pharmacies; require full PBM disclosure of rebates, costs, prices, fees, and other transactions with health plans and payers; and require PBMs to report differences in rates or fees to unaffiliated vs. affiliated pharmacies. The measure also requires FTC to report to Congress on PBM practices and to protect whistleblowers from being punished for bringing PBM violations to light.

As chairman of the Senate Commerce Committee, Cantwell already held a hearing in May on PBM practices and the need for legislation to establish a more equitable system for patients to access needed medicines. The Senate Finance Committee, where Sen. Grassley is the ranking Republican, is also examining these issues, as will relevant House committees. The Biotechnology Innovation Organization (BIO) applauded the Senate measure as well as ongoing FTC efforts to examine the role PBMs play in the biopharma market.

Pharma mergers also face FTC, DOJ scrutiny

In a separate move, the FTC has scheduled a public meeting to assess the impact of pharmaceutical company mergers on competition, innovation, and consumers. The Department of Justice Antitrust Division will co-host with the FTC a two-day workshop June 14 and June 15, 2022, to examine pharma sector market competition and merger remedies and how such actions affect biopharma innovation. This meeting was recommended by the Multilateral Pharmaceutical Merger Task Force, formed in March 2021 by the FTC to gain input on appropriate competition analysis from state attorneys general and officials in Canada, the United Kingdom, and the European Union. The workshop will be webcast each day at

About the author

Jill Wechsler is Washington editor for Pharmaceutical Technology.