According to the FTC, it plans to “examine pharmacy benefit managers’ role at the center of the U.S. pharmaceutical system.”
If their operations are addressed properly, drug prices can be reduced significantly, according to Peter Pitts, a former FDA official and the co-founder and President of Center for Medicine in the Public Interest (CMPI).
“If the FTC does its job properly, consumers at the point of this dispensation at pharmacies or through the mail, could see their copay drop anywhere between 50-60 percent,” Pitts recently told Epoch TV’s “China Insider” program.
He noted that the amount would be significant savings for American patients and the price decrease would play an important role in encouraging Americans to use drugs when needed.
“The more expensive drugs are, the less likely Americans are to use them,” Pitss said.
“That’s got serious consequences relative to lack of compliance and having diseases get worse and patient [treatment] become even more expensive,” he added.
The expert further elaborated on how PBMs started to do harm to the U.S. pharmaceutical industry.
PBMs have brought together many small companies, and for many years managed to take advantage of volume to negotiate between 50-70 percent off the list prices, both for brand name drugs and generic drugs.
But later, out of greed, he said, “they’re actually pocketing 50-60, sometimes 70 percent of the savings and not passing [them] along, ultimately, to patients.”
“So rather than being a tool to lower drug prices, you’re actually raising drug prices and restricting use for American patients,” Pitts said.
“PBMs are so big, that they are actually trying to have the American consumer use more expensive products, because their cut of the rebates are bigger,” he added.
In his opinion, this is the cause of the FTC investigation.
On the other hand, he pointed out, “PBMs are an incredibly powerful lobby in Washington, which is why they have been able to get away with their shenanigans for so long.”
“They’ve got very big checkbooks and on another front they’re not afraid to write big checks to protect their nefarious monopolies,” Pitts said.
Yet, both federal and state governments have become aware of PBM’s practices and thus, he said, “are trying to put laws in place to make sure that the rebates that these PBMs get actually get passed along to patients.”
Pitts suggested that Congress also take action to tackle this practice.
“If Congress can get together on a bipartisan basis, we can make things happen because at the end of the day, all members of Congress want Americans to have better access to medicines,” Pitts said.
