US FTC "Unlikely" To Curb PBM Strategies

While the US Federal Trade Commission has announced plans to revisit the Merck & Co and SmithKline acquisitions of pharmacy benefit management companies (see page 3), hemant Shah of HKS & Co feels it is unlikely to impose any meaningful restrictions on these companies' PBM strategies. His reasons for this opinion include:

- The FTC's antitrust division is mandated to oppose any action that would prohibit competition or mean high consumer prices, but PBMs foster rather than inhibit price competition. They negotiate and often demand lower prices from drugmakers to pass on to their customers and, whether independent or owned by drug firms, PBMs do not violate antitrust laws;

- If a PBM cannot continue to offer its customers (which are highly sophisticated medium and large corporations, insurers and other managed care organizations) substantial savings over the long term, it will lose business to other PBMs which may be willing to do so. Additionally, with the growth of the electronic highway and information technology, many large companies and institutions may be able to manage their prescription drug benefits in-house rather than using PBMs, especially if their prices are rising. The fear of potential rises in drug prices over the long term seems to have little or no basis;