Surging drug prices targeted in U.S. study of pharmacy giants

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FILE PHOTO: Signage is seen at the Federal Trade Commission headquarters in Washington, D.C.

By Diane Bartz and Leroy Leo

(Reuters) -The U.S. Federal Trade Commission is looking into how big pharmacy benefit managers like CVS Caremark affect pricing and patients’ access to prescription drugs at a time when costs of some medicines, even older ones like insulin, have skyrocketed, the agency said Tuesday.

As part of the probe, the FTC is sending demands for information to CVS Health Corp’s Caremark, Humana Inc, Cigna Corp’s Express Scripts and UnitedHealth Group’s OptumRx, among others.

Pharmacy benefit managers (PBMs) negotiate with drugmakers for rebates and lower fees on behalf of employers and other clients, and reimburse pharmacies for prescriptions they dispense.

FTC Commissioner Alvaro Bedoya said on Twitter that the practices of these intermediaries are “cloaked in secrecy and opacity,” adding that for most Americans, “pharmacy middlemen control what medicine you get, how you get it, when you get it, and how much you pay for it.”

The study is expected to take months and should make companies’ practices more transparent, FTC Chair Lina Khan said in a statement.

The FTC said in a statement it will ask about fees charged to independent pharmacies and reimbursements that are then clawed back from them, efforts to steer consumers to PBM-owned pharmacies and about their specialty drug policies.

Officials from CVS and Prime Therapeutics said in statements that they intended to cooperate. Other companies did not respond to requests for comment.

The PBM trade group, the Pharmaceutical Care Management Association (PCMA), defended the industry.

“We are confident that any examination of pharmacy benefit managers will validate that PBMs are reducing prescription drug costs for consumers,” said PCMA President JC Scott in a statement.

“Drug manufacturer price-setting is the root cause of high drug costs. The most effective study of issues around drug costs for consumers would examine the entire supply chain,” Scott added.

(Reporting by Diane Bartz in Washington and Leroy Leo in Bengaluru; Editing by Lisa Shumaker and Bill Berkrot)