FDLI: PBMs, P/E Studies, DTC Ads And The Internet

Several competitive issues regarding the vertical integration ofPharmacy Benefit Managers into drug firms worry the Federal Trade Commission, a recent US Food and Drug Law Institute meeting has heard (see also pages 12-13 and Marketletter September 15).

Michael McNeely, assistant director at the FTC's Bureau of Competition, said lost sales were not the issue. Matters relating to foreclosure (the inability of another drug company to reach a segment of the market) include access foreclosure, the possible raising of entry barriers which would diminish R&D, raising of competitors' costs and possible aggravation of the effects of foreclosure due to reciprocity agreements between the PBM and the drug company. Also of concern was access to price information which could facilitate collusion and access to bidding information which could raise prices.

An "open" formulary (a product of an independent pharmacy and therapeutics committee) was the centerpiece of the FTC's remedy in the Lilly/PCS cause, he said. It also required a firewall which prohibited the exchange of competitively sensitive information. Rebates and discounts have not always produced increased market share, he said, and PBMs may not be the right vehicle for disease management, as they are not experts on outcomes.