The Federal Trade Commission (FTC) has initiated a significant move against pharmacy benefit managers (PBMs) by filing a lawsuit against three major PBMs on September 20. This lawsuit marks one of the more substantial actions the federal government has taken to mitigate the influential power of PBMs, who play a critical role in the pricing and distribution of prescription drugs.
PBMs are often criticized for their role in escalating drug prices. Despite these concerns, there has been limited federal intervention, compelling individual states to take up the mantle. In 2024 alone, nearly half the states in the U.S. have enacted legislation aimed at addressing the high consumer costs, extensive control PBMs wield in pricing negotiations, and the considerable profits these middlemen accrue.
Congress has repeatedly stalled in passing comprehensive legislation aimed at reining in PBMs. With the upcoming election cycle, it remains uncertain whether newly elected legislators will prioritize action against these entities. Given the slow pace at the federal level, state-level initiatives are likely to be the primary battleground for regulating PBMs and curbing their influence on drug prices.
The FTC’s recent lawsuit, which targets some of the largest players in the PBM sector, could potentially signal a shift towards more robust federal involvement in the future. However, for now, states remain at the forefront of the battle against high drug prices and the opaque operations of PBMs. More details can be found in the full analysis by Bloomberg Law here.