New FTC appointment could be good luck for consumers, independently owned pharmacies

NCPA May 13, 2022

Dear Colleague,

Doug HoeyToday is a day of superstitions. The Otis Elevator Co. reports that 80 percent to 90 percent of the elevators it has installed in skyscrapers and large hotels do not have a 13th floor button. The vast majority of airports avoid using the number 13 for gates as well. Thirteen may be an unlucky number, but I'm hopeful that "five" is a lucky number for consumers and independent pharmacy.

On Wednesday, the Senate approved the appointment of a fifth member to the Federal Trade Commission. Alvaro Bedoya was approved by the thinnest of margins — Vice President Kamala Harris cast a tie-breaking vote. Every Senate Republican voted no on the appointment and all Democrats voted in favor, which gives Democrats a 3-2 edge on the commission, and that could portend good news for community pharmacy.

If you recall, back in February, the four-person commission deadlocked on a proposal strongly requested by NCPA and endorsed by FTC Chair Lina Khan to proceed with a 6(b) study of PBMs and their anticompetitive practices. We felt then — and now — that such a study would clearly show how PBM practices are negatively affecting competition and quality patient care. We also urged the commission that it was time to put a stop to mergers that are turning health care systems into current-day robber barons. An in-depth study, we hope, would add to the case for PBM and consolidation reform.

Now, with Bedoya, a respected law professor who is founding director of the Center on Privacy and Technology at the Georgetown University Law Center, joining the commission, we are optimistic that this appointment could be pharmacy's four-leaf clover. We hope that, with the commission at full strength, it will act as soon as possible to revisit the study and launch an examination into PBM practices – practices that increase prescription drug prices, limit consumer choice, and stymie competition for small business community pharmacies.

This year, we have seen another example of why this study into PBM practices is necessary and long overdue. CVS Health's PBM, Caremark, released a policy that would have required network pharmacies to get Caremark's permission before making a bulk purchase — you know, the kind of purchases that can help lower prices and increase competition. After a lot of pressure, Caremark made an adjustment to this policy after Pioneer inserted an override requiring an edit in its pharmacy management system. Unfortunately, Caremark's adjustment still requires pharmacies to report their bulk purchases. In our opinion, this is totally anticompetitive and an overreach.

With PBMs, it seems that it's always a battle over something. We've never asked for special treatment. We want fair treatment and an equal footing. Vertical consolidation has emboldened Aetna/CVS Health, Cigna/Express Scripts, and UnitedHealthcare/OptumRx, which account for 80 percent of the health plan pharmacy benefit market.

Khan's interest in PBMs has given us hope, and Bedoya's confirmation reinforces that hope. Stay away from black cats and we'll watch the FTC for further action.


Doug Hoey

B. Douglas Hoey, Pharmacist, MBA

P.S. Be sure to join us Tuesday night when we examine the impact of CMS' final rule on independent pharmacies—including pharmacy DIR. Register here.