Radar on Drug Benefits

Alvaro Bedoya’s confirmation as a commissioner of the Federal Trade Commission gave new hope to organizations urging the FTC to investigate PBMs. The Senate confirmed Bedoya, a Biden administration nominee, on May 11. Prior to Bedoya’s confirmation, an effort to investigate PBMs stalled when the agency’s existing four commissioners deadlocked along party lines in a Feb. 17 meeting over whether to start such a probe. Instead, the commission on Feb. 24 issued a public request for information (RFI) regarding “the ways that practices by large, vertically integrated Pharmacy Benefit Managers’ (PBMs) are affecting drug affordability and access.”

Meanwhile, Sens. Chuck Grassley (R-Iowa) and Maria Cantwell (D-Wash.) on May 24 introduced legislation that they said would empower the FTC “to increase drug pricing transparency and hold pharmacy benefit managers (PBMs) accountable for unfair and deceptive practices that drive up the costs of prescription drugs at the expense of consumers.” According to the two legislators, the Pharmacy Benefit Manager Transparency Act “would ban deceptive unfair pricing schemes; prohibit arbitrary claw backs of payments made to pharmacies; and require PBMs to report to the FTC how much money they make through spread pricing and pharmacy fees.”

Centene Corp. has agreed to sell two of its pharmacy businesses, Magellan Rx and PANTHERx Rare, in separate transactions as part of the insurer’s decision last year to exit the PBM industry.

Prime Therapeutics, a PBM jointly owned by 19 Blue Cross and Blue Shield affiliates, is acquiring Magellan Rx for about $1.35 billion in a deal that’s expected to close in the fourth quarter, while a joint venture of the Vistria Group, General Atlantic and Nautic Partners is buying PANTHERx Rare for $1.45 billion in a deal that’s expected to be completed in the next two to four months.

With a raft of biosimilars coming to market starting in 2023, major PBMs are touting the pharmacy infrastructure and services that they say will position them to help customers take advantage of cost-saving opportunities in the coming years.

Speaking during recent conference calls to discuss first-quarter 2022 financial results, they also reported healthy client retention levels as PBMs move through the large-employer selling season.

“Our team is quite excited about and well positioned for the accelerating biosimilar trend that we see in front of us for the coming years,” Cigna CEO David Cordani said during a May 6 conference call to discuss first-quarter 2022 financial results, per a transcript from The Motley Fool.

New research published in JAMA Health Forum found that rebate revenue for PBMs grew between 2015 and 2019 — but that growing rebate revenue was not passed on to patients.

The research letter’s authors measured both prerebate and postrebate drug costs taken from medical loss ratio (MLR) filings made by plans to CMS. The research sample includes commercial insurance filings from small group, individual and large group health plans across “approximately 2,200 unique health plans” covering 70 million lives.