June 14, 2022
Media contact: National Consumers League – Katie Brown, email@example.com, (202) 207-2832
Washington, DC— NCL is deeply concerned by the lack of transparency and accountability surrounding pharmacy benefit managers (PBMs). The pervasive power of PBMs in the pharmaceutical industry has raised out-of-pocket costs for consumers and made it more difficult for them to receive essential medical treatment. NCL believes that the FTC’s investigation into PBMs represents a significant first step to addressing these issues.
The PBM system was originally intended to work on behalf of employers, health plans, labor unions, and states, to negotiate with drug manufacturers and process prescription drug claims. However, as their power and influence in the market has grown, there are major concerns that PBMs have increasingly prioritized profits, with consumers paying the price.
With the highest profit rates of any corporations in the prescription drug supply chain, PBMs have pocketed more than $450 billion in revenue in 2020, a stark $150 billion increase from eight years ago. More concerning is that now, just three PBMs account for approximately 77 percent of all equivalent prescription claims.
PBMs often demand that drug companies provide them “rebates” or discounts to offer medicines as part of a drug benefit plan. While implemented to lower consumers’ out-of-pocket costs, these theoretical consumer savings seem to be nonexistent. In addition, to increase profits, PBMs intentionally steer consumers to higher-priced drugs, regardless of patient and treatment considerations.
As the most prominent PBMs have vertically integrated with the largest health insurance companies, they are employing monopolistic-like practices to increase prescription prices, limit consumer choice, and stifle market competition. NCL is encouraged that the FTC is taking preliminary action to hold PBMs accountable. In addition to this investigation, policy-makers and the FTC must continue to address the lack of regulatory oversight with the utmost urgency.
About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.