FTC PBM Investigation

The Federal Trade Commission launched a formal investigation into pharmacy benefit manager practices in 2022, issuing compulsory orders to the six largest PBMs. The investigation represents the most significant federal scrutiny of the PBM industry in decades and has already produced findings that are shaping legislative and regulatory action.

Scope of the Investigation

The FTC's inquiry focused on several areas: the impact of PBM business practices on drug affordability for consumers, the role of rebates and fees in drug pricing, PBM steering of patients to affiliated pharmacies, the effect of PBM practices on independent pharmacy viability, and the relationship between vertical integration and competitive dynamics. The six PBMs subject to compulsory orders were CVS Caremark, Express Scripts, OptumRx, Humana Pharmacy Solutions, Prime Therapeutics, and MedImpact Healthcare Systems.

Key Findings

The FTC's interim report, released in 2024, highlighted several concerns. The investigation found that the three largest PBMs have used their market power to steer patients toward PBM-owned pharmacies. The report documented instances where PBM-owned pharmacies received more favorable reimbursement than independent pharmacies for the same drugs. The FTC also examined how rebate structures may contribute to higher list prices and expressed concern about the lack of transparency in PBM pricing and revenue.

Implications for Employers

The FTC investigation has increased awareness of PBM practices among legislators and regulators, creating momentum for transparency requirements and competitive reforms. For employers, the investigation reinforces the importance of strong contractual protections, comprehensive audit rights, and ongoing monitoring of PBM performance. Regardless of eventual regulatory outcomes, the investigation has generated public data and analysis that employers can use to inform their PBM evaluations.