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Phrankenstein companies must be stopped, says NCPA in new FTC comments

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ALEXANDRIA, Va. – Three massive corporations integrating the largest insurance companies, big-box pharmacies, and pharmacy benefit middlemen in the world are strangling competition and bleeding patients, said the National Community Pharmacists Association in comments submitted to the Federal Trade Commission.

NCPA outlined the “staggering scope” of practices that distort the pharmacy market against independent competitors, patients, and taxpayers. “NCPA believes the FTC could correct many of these harms by focusing its immediate attention on adhesion contracts between PBMs and independent community pharmacies, patient steering to PBM-affiliated pharmacies, and discriminatory reimbursement. The FTC should undertake studies and rulemaking to address each of these issues,” said the organization.

The FTC is once again considering whether to launch a so-called 6b study, which is essentially a civil investigation, into how PBMs operate, how their behavior affects smaller competitors, and how all of that affects patients and consumers. The commissioners deadlocked 2-2 on a proposed study earlier this year. This time, however, all five members would be present.

“The testimony from consumers and small-business pharmacy owners was unanimously in favor of a study last time and many pleaded with the FTC to take action,” said NCPA CEO B. Douglas Hoey. “We appreciate Chair Lina Khan for not giving up on the issue. We’re hopeful that a majority of commissioners will finally agree to investigate how these companies and their practices reduce competition, limit patient choice, and increase patient cost.”

CVS/Aetna/Caremark is the largest of the three quasi-monopolies. CVS is the ubiquitous retail pharmacy chain. It owns Aetna, one of the biggest insurance companies in the country, and CVS Caremark, a PBM that decides which drugs insurance plans will cover and which pharmacies patients must use. Cigna/Express Scripts is another dominant player. Cigna is a national insurance heavyweight that owns Express Scripts, a PBM, and is the third largest pharmacy in the country because of its mail-order pharmacy. Then there’s UnitedHealthcare and OptumRx, another insurance company-PBM tag team that also owns a mail-order pharmacy.

“These three companies control 80 percent of all prescriptions in the United States,” said Hoey. “Independent community pharmacies that want access to the market must accept lopsided contracts that reimburse less than the cost of drugs. And the same three companies steer patients to their own mail-order pharmacies. These practices increase out-of-pocket costs for patients and limit their choices of health care providers.”

Click here for NCPA’s comments.


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