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State Insurance Commissioners Seek Meeting With FTC On PBMs


The group representing state insurance commissioners is seeking information from the Justice Department and Federal Trade Commission about their investigations of pharmacy benefit managers’ practices, saying its members want to meet with federal officials to discuss how consolidation in the PBM industry impacts patients.

The state insurance commissioners also want to discuss what they view as insurers’ misleading marketing practices.

The National Association of Insurance Commissioners (NAIC) wrote to DOJ and FTC May 11 asking for updates on the FTC’s investigation of PBM practices, along with other investigations of health insurance carrier antitrust violations and health insurance plan marketing.

The organization wants an update on FTC’s study of PBMs and their impact on consumer prices, which began last year. Under section 6(b) of the FTC Act, the commission is investigating PBM business strategies, including charging fees to unaffiliated pharmacies; steering patients toward PBM-owned pharmacies; and designing formularies based on rebates from manufacturers.

NAIC wrote that states have “become increasingly active in their oversight of PBMs with the passage of new laws and rules, especially following the Rutledge decision,” referring to the 202 Supreme Court case that has underpinned DOJ’s recent arguments that states can enact broad PBM regulations.

“The NAIC is currently in the process of developing a White Paper on PBM practices and state regulations and would welcome a briefing by the FTC on their findings from their inquiry on the impact of vertically integrated PBMs on access and cost,” the group’s leadership, including NAIC president and director of the Missouri Department of Commerce and Insurance Chlora Lindley-Myers, wrote in the letter.

FTC recently ramped up its effort by ordering two major group purchasing organizations (GPOs) to turn over records and information regarding their business practices after consumer advocacy groups said the commission should examine GPOs’ coordination with PBMs and the resulting impact on prescription pricing.

The records order applies to Zinc Health Services, the GPO for CVS Caremark (CVS Health); and to Ascent Health Services, the GPO for Express Scripts, Prime Therapeutics, Envolve Pharmacy Solutions and Humana Pharmacy Solutions.

In response to the order, the Pharmaceutical Care Management Association (PCMA) said FTC was inappropriately focusing on PBMs and GPOs rather than on players in the prescription drug supply chain.

“The FTC is adopting Big Pharma rhetoric and using the label middleman, while our companies are proud to stand between drug companies’ high prices and patients and employers trying to pay for healthcare,” the PBM lobby group said.

PCMA this week launched a major new ad campaign encouraging opposition to Congress’ pending legislation backed by the drug industry that would crack down on PBM business practices.

NAIC also asks for information on other FTC investigations involving health insurers. It wrote that when Congress amended the McCarran-Ferguson Act in 2020 to allow FTC to investigate antitrust complaints against health insurers, members of Congress said DOJ and FTC would notify states of any complaints or investigations. NAIC had opposed the change and said existing state laws were sufficient.

“However, to date, no state regulators have reported any such notification from the Department of Justice or FTC,” the letter says. “Insight into any anti-competitive behavior by our regulated entities and the impact that may have on consumers is vitally important to our work. With that in mind, please provide an update on any health insurer antitrust investigations, a list of which states may be impacted, and records of any notifications made to those states.”

Additionally, the state commissioners ask for a meeting with FTC staff to discuss misleading marketing practices in the insurance industry, such as uses of social media and robocalls that can take place across state and national borders. “The NAIC has formed a Working Group so that state regulators can share information about such practices they have seen and coordinate responses,” the members wrote.

Reporter -- Jessica Karins (jkarins@iwpnews.com)

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