By Marty Schladen – June 2, 2021, Minnesota Reformer
It’s investigating whether Amazon, Google, Apple and Facebook are engaging in anticompetitive practices. And Sen. Amy Klobuchar, D-Minn., just published a book about the need to revive the government’s antitrust powers.
But if this is to be a new era of trust-busting, advocates say, prescription drugs should be a top priority.
With bipartisan support, Sens. Chuck Grassley, R-Iowa, and Maria Cantwell, D-Wash., in April introduced a bill that would require the Federal Trade Commission to launch such an investigation. It would look at whether the health care giants that own the biggest pharmacy middlemen are using their market power to drive up the cost of drugs and diminish access to care by driving out competing pharmacies.
The middlemen, known as pharmacy benefit managers, or PBMs, control more than 77% of the prescription marketplace in the U.S. That gives them power to decide which drugs are covered, the size of rebates manufacturers grant them and how much pharmacies will be reimbursed if those pharmacies want access to the millions of patients the PBMs represent.
The largest PBM, CVS Caremark, is owned by a company that also owns the largest retail chain, CVS Pharmacy. So as a PBM, it’s determining how much its own stores and its competitors will be reimbursed when they supply drugs to CVS Caremark’s clients.
CVS maintains that it doesn’t advantage its own pharmacies when determining reimbursements. But The Columbus Dispatch obtained confidential documents showing that in 2017, CVS Caremark reimbursed CVS pharmacies far more for generic Medicaid drugs than it did large competitors such as Walmart.
In addition, the Arkansas Insurance Department last year published an analysis showing that the big three PBMs — CVS Caremark, UnitedOptumRx, and Express Scripts — reimbursed national pharmacy chains at substantially higher rates than they did regional chains and independent pharmacies. The smaller chains and independents are often in underserved areas, and if they go out of business, it could create “pharmacy deserts.”
In another possible instance of abuse, CVS Caremark in late 2017 slashed reimbursements under the Ohio Medicaid program. Then it sent letters to struggling independent pharmacists acknowledging that reimbursements were down and saying that CVS wanted to buy their pharmacies.
Meanwhile, each of the PBMs has combined with a major health insurer since 2014. CVS owns Aetna. OptumRx is owned by Minnesota-based UnitedHealth. And Express Scripts is owned by Cigna.
The companies say they maintain firewalls between their business units to keep one from unfairly advantaging the others. But suspicions abound.
Alabama, Tennessee, Texas and West Virginia have passed laws in recent months banning the companies from using their insurance or PBM operations to steer clients to certain pharmacies. They were passed after residents offered testimony such as, “‘I got a prescription filled at Joe’s pharmacy and when I got home there’s a message on my voicemail saying, ‘We know you just got prescription X filled. You can go to the CVS down the street and get it filled at a better rate, a better copay,’” Anne Cassity, Vice President of Federal and State Government Affairs for the National Community Pharmacists Association, said Friday.
CVS didn’t respond to a request for comment.
A group representing the PBM industry, the Pharmacy Care Management Association, earlier this month said it had no problem with a Federal Trade Commission antitrust investigation.
“The core mission for PBMs is to advocate on behalf of patients to increase access to affordable prescription drugs,” PCMA spokesman Greg Lopes said. “We look forward to working with Sens. Grassley and Cantwell on real solutions to lowering drug costs.”
Sens. Marsha Blackburn, R-Tenn., Richard Blumenthal, D-Conn., Thom Tillis, R-N.C., and Joni Ernst, R-Iowa, have signed onto the bill requiring an investigation, but it’s unclear how many others in Congress have tuned in.
Rep. Tim Ryan, D-Ohio, last week held a virtual press event in which he promoted H.R. 3, a drug pricing bill that seeks to control costs by focusing solely on drugmakers. Among its provisions, the bill would require manufacturers selling drugs to Medicare patients to peg their costs to those in foreign countries such as Australia.
Insurers and PBMs play an enormous role in determining prescription drug costs, but Ryan said he wanted to address their role in other legislation.
The office of Sen. Sherrod Brown, D-Ohio, was asked if he supported the bill requiring an antitrust investigation of the corporations that own the big PBMs and insurers.
“That is a Judiciary Committee bill, of which Sen. Brown is not a member,” a spokeswoman said on background. “Requiring more information is important. However, Sen. Brown is focused on reforms to increase oversight over PBMs and curb PBM abuses, as part of his efforts to address prescription drug costs through the committee on which he serves — the Senate Finance Committee.”
She listed several transparency measures Brown included in a bill that passed out of the Finance Committee last year.
The office of Sen. Rob Portman, R-Ohio, didn’t respond when asked if he supported legislation requiring an antitrust investigation.
Cassity, of the community pharmacists association, said her group and others need to work to explain an admittedly complex matter to lawmakers.
“I think it’s a little early and there’s been so much focus on pharmaceutical manufacturers since January,” she said. “I think there’s an opportunity here. It’s very complicated and many members of Congress don’t understand it the way they need to, but a lot of them do.”
She added, “There has been more understanding, but there needs to be more education. And frankly, antitrust, a lot of folks hear that and they back off if they’re not intimately involved with it in their committee.”
This story was originally published by Ohio Capital Journal, which is part of States Newsroom. Follow Ohio Capital Journal on Facebook and Twitter.