Dear Colleague,
When I looked to my left and saw the FTC Chair standing there it was a relief. I had just finished my speech about the vision for the future of pharmacy. Lina Khan, the chair of the FTC, had accepted NCPA's invitation to speak at last week's NCPA Annual Convention in Kansas City a month ago but government officials are notorious for having schedule changes that cause them to cancel at the last minute. She was here. Whew!
Khan's comments drew numerous spontaneous applause eruptions from the audience of pharmacy owners, pharmacy teams, and industry partners. For example, in response to a question about the FTC's probe into PBMs, Khan said that the 6(b) study is a tool to find out what's really going on "especially in markets where you see a lot of opacity or complexity. I think we've seen time and time again where some businesses will use complexity to shroud what's really going on." Although she wasn't specifically talking about PBMs, she described their business practices to a T, and the audience erupted.
There were a couple of things that stood out to me in my conversation with her during the chat and backstage.
The first is that's she's interested in hearing from real people. Just listening to big business who know how to navigate the process can lead to an "incomplete picture," she said.
That's not just lip service either. When Khan took the lead at the FTC last year, she began monthly open meetings where the commissioners and FTC staff can hear the business realities that consumers are navigating. "There's no better way to do that than to hear from people who are actually in these markets," she said.
I asked her what drew the FTC's interest to look into PBMs. While not a new subject at the FTC, she said, it was the overwhelming response the FTC received when they asked for examples of unfair competition that further sparked their interest. She mentioned the 24,000 comments the FTC received from independent pharmacies, patient advocates, and physicians. NCPA strongly encouraged its members to share their stories about how PBM business practices are affecting their business and their patients. Just in case you ever think your advocacy efforts fall on deaf ears, take note.
The second thing that stood out to me, frankly, impresses me the most: Khan is taking on the establishment that has largely gone unchallenged for half a century.
"In the 1980s, the FTC shifted to a greater emphasis on efficiencies and we're now at a moment where we are realizing that has had real consequences and that there are all sorts of sectors of our economy that are no longer competitive. And that is leading to higher prices, lower wages, lower rates of business formation, lower rates of innovation, and so we are in a moment of reassessment."
Forty years of big businesses able to run roughshod over their smaller competitors. Forty years of bullying and using sheer size in coercive or repressive manners. Forty years of a bigger-is-always-better mindset.
That's the conventional wisdom that Khan is questioning. Not only are the mega-PBMs going to pull out all the stops to silence any new thinking but other big businesses are lining up to do the same. The U.S. Chamber for example, has come out strong against Khan, using rhetoric that sounds a lot like the insurance company owned mega-PBMs.
Bigger can be better but bigger is not always better. The FTC is reawakening to that marketplace reality, and that is good news for competition and consumers.
Best,
B. Douglas Hoey, Pharmacist, MBA
NCPA CEO
