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An ongoing Federal Trade Commission study finds pharmacy benefit managers may have inflated drug costs while squeezing independent pharmacies, enriching some of the largest companies in the country at the expense of patients.

The interim FTC report released Tuesday details the market influence of companies known as PBMs, which are hired and, in many cases, owned by health insurers to manage drug benefits within heath plans. Their roles include negotiating prices, setting co-pays for medications and creating pharmacy networks where patients can fill prescriptions.

Eagan-based Prime Therapeutics and OptumRx, a division of Minnetonka-based UnitedHealth Group, were two of six PBMs singled out in the report.

"The FTC's interim report lays out how dominant pharmacy benefit managers can hike the cost of drugs — including overcharging patients for cancer drugs," FTC Chair Lina Khan said in a statement. "The report also details how PBMs can squeeze independent pharmacies that many Americans — especially those in rural communities — depend on for essential care."

The trade group for PBMs decried the report, saying it "falls far short of being a definitive, fact-based assessment" and didn't live up to FTC's history of objectivity.

The Pharmaceutical Care Management Association noted in a statement that one member of the five-person commission disagreed with the decision to release the report. It was based on anecdotes, anonymous comments and "cherry-picked case studies," according to the trade group.

"Throughout this process, FTC leadership has shown that they have predetermined conclusions that they want to advance irrespective of the facts or the data, and this report demonstrates an intention to follow through on their agenda regardless of the evidence," the association said in a statement. "Nothing can change the fact that PBMs are operating in an extremely competitive market and have a proven track record of reducing prescription drug costs."

Interim studies are unusual and do not represent a final report from the FTC, Commissioner Andrew Ferguson wrote Tuesday in a statement. The final version, Ferguson said, should include more definitive evidence of pharmacy-reimbursement practices and incentives, but he concluded: "It is important for the commission to share what staff has learned to date, such as it is."

In 2022, the FTC launched its review of PBMs, a subject that was highlighted by Commissioner Alvaro Bedoya during comments at a Minneapolis event on economic competition that year.

Last month, Minnesota Attorney General Keith Ellison led a bipartisan group of 32 attorneys general asking the U.S. Supreme Court to review a case that could otherwise limit state regulation of PBMs.

In 2023, the state Commerce Department imposed a $500,000 fine against Rhode Island-based CVS Caremark, alleging the PBM used strategies not allowed under Minnesota law to steer consumers to its own pharmacies. CVS Caremark, which denied the allegations and did not admit liability, was one of the six PBMs highlighted by the FTC's report.

Express Scripts, which is owned by Connecticut-based insurer Cigna, rounds out the "Big 3″ of PBMs, the FTC says, along with CVS Caremark and OptumRx, owned by Minnesota-based UnitedHealth Group. Collectively, they manage 79% of prescription drug claims for about 270 million people, according to the report. Add the next three largest PBMs, one of which is Prime Therapeutics, and the group manages 94% of prescription drug claims in the United States.

In 2004, the top three PBMs served a combined 190 million people, the FTC says, and managed 52% of prescription drug claims.

"In addition to this high degree of horizontal concentration, the Big 6 PBMs have become vertically integrated within massive conglomerates that provide a broad range of services across the pharmaceutical supply chain and other segments of the health care sector," the FTC report says.

PBMs enter into rebate contracts with drug makers, the FTC says, an arrangement where manufacturers provide payment for favorable placement on health plan formularies, which can shape demand by specifying how much patients pay out-of-pocket for a medication.

The FTC says it has evidence PBMs and drug manufacturers "sometimes enter rebate agreements expressly conditioned on excluding [lower cost] generic drugs from coverage," according to the report. In other cases, there's evidence that PBMs and manufacturers enter agreements so that prior authorization rules and step therapy requirements — where patients must try certain drugs before others — discourage the use of generic alternatives, the study found.

The report also highlights potential problems with vertical integration, where large companies like UnitedHealth, CVS and Cigna own both PBMs and insurance companies as well as specialty pharmacies, which handle high-cost and complex medications.

"Amidst increasing vertical integration and concentration, these powerful middlemen may be profiting by inflating drug costs and squeezing Main Street pharmacies," the report says.

In a statement, OptumRx said the FTC rushed to publish an analysis that was incomplete and reached flawed conclusions. Its findings, the company added, don't follow from the more than six years of data and millions of pages of information it has provided the commission.

"PBMs, like OptumRx, are the key counterweight to pharmaceutical companies' monopoly power to set and raise drug prices," the company said in a statement. "The money we are saving the employers, unions, governments and payers who rely on us to negotiate savings is helping consumers through reduced premiums, point-of-sale discounts on medicines and greater investment in population health and wellness programs."

Prime Therapeutics said in a statement it was disappointed the report didn't distinguish how its structure and business practices are different than other large PBMs.

"Prime is not owned by or affiliated with any single national payer, private equity, nor publicly traded," the company said. "Prime is an independent company owned by a consortium of 19 separate, mission-driven, not-for-profit Blue Cross Blue Shield plans located across the country, each with their own unique attributes, geographies and membership."

OptumRx said it agreed with several parts of a dissent released Tuesday by one of the five FTC commissioners — Melissa Holyoak — who said the report shouldn't be released, arguing it fails to offer empirical evidence to support claims about the market power of PBMs, including suggestions that competition in the market has declined.

"The commission has failed to advance the public's understanding of PBM practices," Holyoak wrote. "Our job is not to score cheap points for transient political favor — it is to identify and protect against anti-competitive harm."

Commissioners Khan, Bedoya and Rebecca Kelly Slaughter issued a statement supporting the release, saying the interim report "lays out an initial economic analysis, including a discussion of how exclusionary rebates may be having negative spillover effects on competition in drug markets, impeding generic entry."