The FTC’s probe into PBMs, which act as the middlemen between insurers and payers, was announced in early June to target long-standing controversies about the industry, such as prescription drug costs, “methods used to direct patients toward PBM-owned pharmacies” and “potentially unfair audits of independent pharmacies,” the FTC said.
In response to the investigation, pharmacy organizations cheered while the PBM industry — and its consultants — argued against it. Pharmacy benefit managers say they work to lower drug costs, but their hidden business practices have been questioned for years.
PBMs “need to be large,” Mr. Manne wrote, referring to the six PBMs included in the FTC’s investigation, which collectively represent 97 percent of the industry, because “their business model requires bringing buyer power to bear in negotiating lower prices with drugmakers.”
He said the FTC thinks these PBMs harm smaller pharmacies, but this argument is disproven by the growing number of independent pharmacies, according to data compiled by the Pharmaceutical Care Management Association.
The FTC “is pursuing a transparently partisan effort to replace markets with an imaginary utopia of ‘atomistic’ competitors, all at the expense of consumer welfare,” Mr. Manne wrote.
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