Pharmacists, FTC debate during hearing on anti-trust immunity

April 3, 2012

Should independent pharmacies be given anti-trust immunity to act against contracts presented by pharmacy benefit managers? A representative of the Federal Trade Commission said ?no? and pharmacists said ?yes? during a Congressional subcommittee hearing on HR 1946 last week.

Should independent pharmacies be given anti-trust immunity to act against contracts presented by pharmacy benefit managers (PBMs)? A representative of the Federal Trade Commission (FTC) said “no” and pharmacists said “yes” during a Congressional subcommittee hearing on HR 1946 last week.

The bill is sponsored by Rep. Tom Marino (R-PA), who is joined by 30-some co-sponsors from both sides of the political aisle.

Marino’s “Preserving Our Hometown Independent Pharmacies Act of 2011” would grant independent pharmacies limited anti-trust immunity to negotiate jointly on PBM pharmacy contracts. The bill would not allow independents to organize to negotiate contracts for Medicaid or other federal health programs.

Giving independents anti-trust immunity is a bad idea, the FTC argued during the hearings before the House Judiciary Committee Subcommittee on Intellectual Property, Competition and the Internet.

“Giving healthcare providers – whether pharmacies, physicians, or others – a license to engage in price fixing and group boycotts aimed at extracting higher payments from third-party payers would be a costly step backward, not forward, on the path to a better health care system,” said Richard Feinstein, director of the FTC Bureau of Competition.

“Where’s the data?” asked pharmacist Mike James, owner of Person Street Pharmacy in Raleigh, N.C. and vice president of ACP Congressional Network. “Look closely at the FTC testimony. Do they anywhere reference actual pharmacy pricing data? No … the agency has opinions, but not facts.

“Virtually every single prescription a pharmacist in your district handles is controlled by one of three PBMs,” James told the House panel. “The PBMs tell pharmacists whether they can fill a prescription at their pharmacies, whether they can use a lower-cost generic or must use a more profitable brand preferred by the PBM, and what profit margin the pharmacy is allowed to keep. PBMs are in direct competition with every pharmacy in every one of your districts.”

The committee approved a similar anti-trust bill in 2007, but the proposal was defeated in later votes.