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When the Federal Trade Commission issued mandatory orders Wednesday requiring the disclosure of information concerning the service practises of two PBM-affiliated group buying organisations, it expanded its investigation into drug store advantage managers.
The orders are directed at Zinc Health Services and Ascent Health Services, who act as middlemen between pharmaceutical companies and some of the top PBMs in the country. Refund negotiations are handled by Zinc on behalf of CVS Caremark, while Express Scripts, Prime Therapeutics, Envolve Pharmacy Solutions, and Humana Pharmacy Solutions are represented by Ascent Health Services. The group buying companies have 90 days to provide the business with records.
Market watchers said that PBMs’ reliance on group acquiring companies is dubious because to the bargaining leverage they use.
“The letters seem like a logical next step in the FTC’s investigation into the medication supply chain. The need for PBMs to form GPOs is not entirely evident, much like the PBM business itself, according to Duane Wright, senior federal government analyst at Bloomberg Intelligence.
Along with OptumRx and MedImpact Healthcare Systems, the FTC issued comparable orders to CVS Caremark, Express Scripts, Prime Therapeutics, and Humana Pharmacy Solutions in 2015 as part of its inquiries into PBMs’ effects on the price of prescription drugs. PBMs act as middlemen, negotiating drug prices with manufacturers and pharmacies on behalf of payers.
GPOs are described by Antonio Ciaccia, president of 3 Axis Advisors and CEO of 46brooklyn Research, as “the intermediaries of the intermediaries.”
“The GPO produces a brand-new layer and an even higher capability to produce a bigger detach between the market price and the genuine costs of medications,” he said.
PBMs have actually faced greater criticism from Congress, with a House committee today supporting a bill that would require the company to share information with companies about the price of their prescription drugs. A Senate committee recently agreed to forward a number of bills that would end PBM practises, including by outlawing spread rates. A review of PBMs was published by Your Home Oversight Committee last month.
The FTC’s mandated instructions to the GPOs could lead to further congressional scrutiny, according to Wright.