Commercial Pharma manufacturers lawsuits against payers and benefit managers preferred...

Pharma manufacturers lawsuits against payers and benefit managers preferred drugs are on FTC’s radar


The attention of federal antitrust regulators has been drawn to a slew of lawsuits filed by pharmaceutical companies, challenging the “preferred” medicine list of payers and benefit managers.

Pfizer, Sanofi, and other healthcare companies are suing their rival companies for allegedly giving rebates to the insurance companies and Pharmacy benefit managers in exchange for their drugs being added to the preferred formulary list.

The FTC (Federal Trade Commission) told Congress in May that lawsuits contending that such exclusive discounts restrict competition and might create constitutional theories that the agency will follow.

According to Industry observers, these suits as well as FTC’s evaluation of them could set the tone for how pharmaceutical rebates are governed, potentially changing the means of reaching hundreds of pharmaceuticals to the consumers.

However, this intricate sector is based on treaties with precise terms and unique connections, and plaintiffs are finding it very hard to apply antitrust legislation to fact-specific cases, which could impact authorities’ decisions to enforce or impel changes.

“The FTC may use the losses in private cases as evidence that the current interpretations or applications of antitrust laws are inadequate, and maybe as an argument that the laws need to be changed,” said Barbara Sicalides, a partner at Troutman Pepper LLP. 
PBMs (Pharmacy Benefit Managers) are used by insurers to bargain with the drug makers for reduced prices. Pharmaceutical manufacturers pay kickbacks to be included on the PBM formulary list, which often includes the terms to exclude rival’s products from the list. Competitors who seek to promote their products to PBMs’ customers face a “rebate wall” as a result of the practice.

According to a 2020 report by Xcenda, AmerisourceBergen’s healthcare consultancy firm, this rebate practice has been unregulated even though the PBMs have unified in past years.

The three top PBMs CVS Caremark, a CVS Health Inc. subsidiary, OptumRX, a part of Optimum Inc., and Express Scripts, a company of Cigna group, now hold about 70% of the prescriptions in the United States, according to a report.

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