The Federal Trade Commission this month announced that it was expanding its probe into drug middlemen — companies accused of increasing the cost of prescription drugs through secretive, one-sided arrangements with drugmakers and pharmacies. Specifically, it added a third company created by one of the biggest middlemen to its investigation.
The commission, which polices anti-competitive practices in the marketplace, on June 8 issued a compulsory order for Emisar Pharma Solutions to hand over “information and records on its business practices.” The order is part of a sweeping “6(b)” investigation into drug middlemen known as “pharmacy benefit managers” that began a year ago.
Part of some of the largest corporations in the United States, each of the PBMs is affiliated with a major insurer: CVS Caremark with Aetna, Express Scripts with Cigna, and OptumRx with UnitedHealth.
The PBMs create pharmacy networks, create lists of covered drugs and negotiate massive, secretive rebates and discounts from drugmakers in exchange for covering their products. The three largest are estimated to control 80% of the marketplace.
The PBMs have argued that they use their clout to negotiate discounts for the people they cover. But their critics say they aren’t transparent about their finances and that ever-increasing rebates are associated with even bigger increases in the list prices of drugs.
Even as concerns have been raised about the big-three PBMs, they’ve appeared to add another layer of secrecy.
States Newsroom’s Ohio outlet, the Capital Journal, in 2021 reported the rise of “group purchasing organizations” started by each — CVS started one called Zinc Health Services, ExpressScripts launched Ascent Health Solutions and Optum launched Emisar. The companies negotiate rebates and other discounts from drug manufacturers on the behalf of the big three PBMs and some smaller players.
Critics are not just concerned that adding another corporate layer will put yet another curtain around the companies’ practices. They’re also concerned that two of the three group-purchasing organizations are headquartered overseas, potentially making some of their dealings undiscoverable.
Express Scripts’ Ascent is based in Switzerland and Optum’s Emisar is headquartered in Ireland.
The FTC last year opened its probe into the big-three PBMs and into Humana Inc., Prime Therapeutics LLC, and MedImpact Healthcare Systems Inc. Then last month, it added Zinc and Ascent to the probe. This month, it added Emisar.
“Emisar, like Zinc and Ascent, negotiates rebates with drug manufacturers,” the FTC said in announcing the move. “Emisar negotiates these rebates on behalf of OptumRx and, like OptumRx, is a subsidiary of UnitedHealth Group. The Order to Emisar is substantially similar to the orders recently issued to Zinc and Ascent.”
We had 6 pharmacies in a city of 25K just 7 years ago when I opened a family practice here in Newberg, Oregon. We now have 3 pharmacies, one of which closes randomly d/t staffing difficulties. Patients' expectations are pretty low at this point. BTW, There are 3 organizations in this city of 25K that see adult patients that use Medicaid products. The hospital, the Federally Qualified Health Center that is paid to be here by various types of funding AND me. The multinational corporations that have digested (well past eating up) the hospitals, clinics, , pharmacies, long term care facilities, durable medical equipment companies, and Ben and Jerry's ice cream, which is therapeutic and should be on an HSQA list somewhere as covered and independent providers of care (like me except I tend to question authority and those organizations hate that!) We (yup, all of us) let this happen by letting bean counters run the show. Healthcare bought the bill of goods back during Prucare, it ate a big rotten egg when non-profit boards of directors sold out to HCA and other health care, for-profit corporations (I lived through through the cheap gloves bought to save money during the height of the AIDS crisis.) I taught ethics at the University of Texas at Austin before (or so I pretend) I was accepted to the Great State of Oregon as a health care refugee from the small state of Texas. Even an education and teaching at the University of Texas at Austin cannot save a 5-time cancer survivor from bankruptcy. And being broke in Texas means no health insurance. I never died, apparently. I started a clinic in a place that truly values life. I know this because they saved mine.