NCPA Applauds Senate Scrutiny of Anticompetitive PBM Behaviors, Encourages Greater Enforcement

NCPA July 15, 2021

ALEXANDRIA, Va. (July 15, 2021) – As policymakers continue probing antitrust and consolidation issues across various industries, the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights held a hearing Tuesday to examine competition within the pharmaceutical marketplace.

In its statement for the record, the National Community Pharmacists Association pushed the subcommittee to scrutinize the role of vertically integrated for-profit companies that have affiliated with pharmacy benefit managers and engage in business practices that put small-business community pharmacies and consumers at an economic disadvantage. NCPA is specifically recommending:

  • U.S. agencies with enforcement authority to increase their focus on anticompetitive transactions involving vertical consolidation of health care organizations, rather than almost exclusively on horizontal theories of harm; and
  • Additional oversight of pharmaceutical formularies and the “rebate wall” games that can wreak havoc on costs for patients and incentivize PBMs to select higher-priced drugs for their formulary in order to capture greater rebates at the expense of less-expensive competing drugs and therapies or generics.

“The ability of PBMs to game the system not only results in the closure of pharmacies in rural and underserved communities but increased costs for the patient at the point of sale,” wrote NCPA in its statement to Chairwoman Amy Klobuchar (D-Minn.), Ranking Member Mike Lee (R-Utah), and members of the subcommittee. NCPA also welcomed steps recently taken by the Biden administration and the Federal Trade Commission to cast a more skeptical eye toward proposed mergers, as well as continued congressional oversight and actions to meaningfully reduce the costs of prescription drugs for patients.

Among senators speaking at the hearing, Sens. Chuck Grassley (R-Iowa) highlighted how PBMs operate with little transparency, making it difficult for patients and others to understand drug pricing; Josh Hawley (R-Mo.) discussed the need to stop the retroactive collection of pharmacy direct and indirect remuneration fees which drive independent pharmacies towards insolvency; and Marsha Blackburn (R-Tenn.) said that Congress should regulate PBMs to protect patients, community pharmacies, and taxpayers from anticompetitive PBM behaviors like audits, patient steering, and clawbacks.  

NCPA CEO B. Douglas Hoey, pharmacist, MBA said, “The top three PBMs control 77 percent of the prescription drug marketplace. This consolidation – as well as the high costs and limited health care access that follow these vertical transactions – demands vigorous antitrust enforcement from Congress and from agencies like the Federal Trade Commission and the Department of Justice. We’re grateful to Sens. Klobuchar and Lee and their subcommittee colleagues for holding this hearing and stand ready to collaborate on policies to meaningfully reduce the cost of drugs for patients and ensure their access to quality community pharmacy health care services.”

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Founded in 1898, the National Community Pharmacists Association is the voice for the community pharmacist, representing over 21,000 pharmacies that employ approximately 250,000 individuals nationwide. Community pharmacies are rooted in the communities where they are located and are among America’s most accessible health care providers. To learn more, visit www.ncpa.org.

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