FTC’s Deals on Drug Price Reform Have Critics Questioning Scope (Bloomberg Law)

The Federal Trade Commission’s settlements with the nation’s largest pharmacy benefit managers contain both positive reforms and questionable impacts for the broader market, economists and lawyers say. Ten-year pacts would require companies to overhaul a business model that critics say incentivizes higher drug prices and siphons money from pharmacies and employer health plans. The settlements require the PBMs to offer plans that calculate patient cost-sharing based on the drug’s net price, delink their compensation from drug prices, and not favor drugs with high rebates over lower-priced alternatives. Self-insured employers, however, can choose plans without those provisions. “If a meaningful number of plan sponsors opt out of standard offerings, the practical effect of these settlements may be limited as a result,” said Alex Russell, a partner in Goodwin’s antitrust and competition practice. She also noted that the broader industry remains vertically integrated. Several states are trying to ban the big three PBMs from owning pharmacies but are being challenged in court. “There’s a question as to how this is going to affect the industry overall,” she said. “Is this going to change things when, structurally, the industry is still very much the same?” The settlements reflect a number of federal and state policy changes already in place or in the works. “For a very long time, PBMs were not the focus of antitrust compliance and private litigation,” Russell said to Bloomberg Law. “That has changed dramatically over the last several years.”