In The News | Express Scripts-FTC deal making matters worse, pharmacies say
- 11 minutes ago
- 2 min read
Reporter: Noah Tong
Key Takeaways
The Federal Trade Commission and Express Scripts last month settled allegations the pharmacy benefit manager inflated insulin prices.
Pharmacies say Express Scripts responded by worsening their contract terms and demanding more data about their businesses.
The settlement is too ambiguous and the FTC needs to hold PBMs accountable, pharmacies contend.
The FTC is poised to resolve similar charges against CVS Caremark and Optum Rx.
A settlement between Express Scripts and the Federal Trade Commission designed to curb anticompetitive business practices may counterintuitively have the opposite effect, pharmacies warn.
In February, Cigna division Express Scripts agreed to a series of changes to resolve a federal lawsuit alleging the pharmacy benefit manager inflated insulin prices. The settlement, Express Scripts’ pledged shift to a rebate-free model, and other actions by lawmakers and regulators were viewed by some as positive developments that would foster equitable and transparent practices.
Pharmacies, however, have since received new contract terms via electronic fax from Express Scripts, which is part of Cigna’s Evernorth Health Services subsidiary. They don’t like what they see and have little time to opt out.
“The contracts are untenable,” said Wesley Hickman, pharmacy manager and owner of Hickman’s Pharmacy in Leland, North Carolina. The drugstore will opt out of the agreement, he said.
How PBMs reimburse pharmacies has long caused consternation, which pushed states to act in the absence of federal requirements. The healthcare conglomerates that own the leading PBMs, meanwhile, have attempted to maintain margins but appease regulators by adopting industry-friendly changes.
As part of the FTC deal, Express Scripts will “delink” compensation from list prices and transition away from rebate guarantees and spread pricing.
The PBM also agreed to reprioritize what drugs are on its formularies, pay pharmacies the cost of drugs plus a dispensing fee and expand insulin benefits.
The ramifications of the FTC’s agreement with Cigna could soon be more widely spread. The FTC leveled the same charges against CVS Health subsidiary CVS Caremark and UnitedHealth Group division Optum Rx. The agency announced a tentative settlement with CVS Health last week, although the terms are unknown, and is working on a deal with UnitedHealth Group.
But the Express Scripts settlement’s language lacks specificity and lends itself to creative interpretations, pharmacies and other parties wrote in letters to the FTC this month.
The FTC projects the agreement will reduce patients’ out-of-pocket costs by up to $7 billion over 10 years.
“There were a lot of positive elements,” Emma Freer, senior healthcare policy analyst at the American Economic Liberties Project, a think tank that opposes monopolies, said of the settlement. “But it also has a lot of loopholes regarding prescription drug affordability and pharmacy reimbursement rates.”
For example, not all Express Scripts formularies are subject to the agreement and its $25 copay cap for insulin could be modified at any time, Freer said... Continue Reading
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