An interim report issued by federal officials this week excoriated pharmacy sales middlemen over business practices that have grossly inflated drug prices — and made it harder for long-term care pharmacists to meet the needs of nursing homes and their patients.
The Federal Trade Commission’s report on pharmacy benefit managers and their impact on the access and affordability of prescription drugs details how increasing vertical integration and concentration has allowed the six largest PBMs to control nearly 95% of all prescriptions filled in the United States.
One of those PBMs handles drug negotiations for 47% of long-term care residents in the US, the American Society of Consultant Pharmacists said.
“The report from the FTC shows what pharmacists have long known: PBMs are growing rich through vertical integration and restricted access to care. The result has hurt pharmacies and patients across the country,” ASCP CEO Chad Worz, PharmD, told McKnight’s Long-Term Care News in an email Wednesday.
While leaders from both parties have long targeted PBMs with rhetoric amid public demand for drug-pricing reform, lawmakers have done little legislatively to stem the practices that allow PBMs to set prices and monopolize services.
Congress declined to address PBM reform in its last budget negotiations, while CMS failed to address the activities of drug middlemen in its 2025 final Part D rule in April. The FTC does now appear ready to take at least some legal action, with the Wall Street Journal reporting Wednesday night that the commission would sue the three largest PBMs over their tactics for negotiating prices for drugs, including insulin.
In its report, FTC also said it could take to court the PBMs that continue dragging their feet on submitting data and other information requested by the commission since it started its inquiry in 2022.
Reaction to the interim report ranged from frustration to fury.
“While powerful and damning, the report is simply an interim staff report,” Worz noted. “The FTC must finish its work, and PBMs need to stop their transparent delay tactics.”
Senate Finance Committee Chairman Ron Wyden (D-OR) said he would now go “to the mat” to ensure a bill that previously passed out of his committee would make it to President Biden’s desk this term.
“Middlemen are right at the heart of Americans’ frustration with the healthcare system: high prices and red tape preventing them from getting the care they need,” Wyden said. “The FTC’s comprehensive findings show how PBMs use their market power to drive up costs for families and restrict access to preferred pharmacies at the expense of independent pharmacies.”
The Modernizing and Ensuring PBM Accountability Act would prohibit tying PBM compensation to drug’s sticker price in Medicare, increase transparency by creating independent audit and enforcement measures, and provide relief to independent community pharmacies that Wyden said are “often on the receiving end of PBM business practices that are harmful to their business.”
Because PBMs serve as both health plans and pharmacists, the FTC report said, they “wield enormous power and influence over patients’ access to drugs and the prices they pay.”
“PBMs also exert substantial influence over independent pharmacies, who struggle to navigate contractual terms imposed by PBMs that they find confusing, unfair, arbitrary, and harmful to their businesses,” the report found.
The interim report also accused PBMs of exerting substantial influence over independent pharmacies by imposing “unfair, arbitrary, and harmful contractual terms.” They also sometimes work with their drugmakers to set special rates and use “opaque” drug classification systems to make some in-demand items harder to get or more expensive for patients.
One potential mechanism that PBMs may use to steer prescriptions to affiliated pharmacies is to classify drugs as specialty, the report said. In reviewing more than 1,200 comments, the FTC said it heard that “[m]any PBMs will re-classify a medication as a ‘specialty drug’ primarily based on a very high cost” and then “forc[e] their plan members to fill specialty medications only at pharmacies directly owned by the PBMs.”
Among those raising those issues was the Senior Care Pharmacy Coalition, representing more than 300 long-term care pharmacies. The coalition told the FTC that PBMs “classify their medications as specialty drugs subject to the convoluted and opaque process whereby pharmacy access to specialty medications is restricted based on largely specious criteria created simply to allow PBMs to drive a significant percentage of specialty pharmacy revenue to payer-affiliated specialty pharmacies.”
