This is the best summary I could come up with:

PBMs are a topic I’ve covered, mostly as a cause of the disappearance of rural independent pharmacies, but last week, the FTC sparked a big political fight by releasing this report on the PBM business model.

If you’re an employer, a union, a state or Federal government program, and you need drug benefits for a group, you hire a PBM and they set you up with a range of formularies and pharmacy networks.

“According to PitchBook,” the FTC report noted, “these four entities and their subsidiaries (which include the largest PBMs) collectively engaged in more than 190 transactions over the 2016 to 2023 period (UHG, 88; CVS, 53; Humana, 39; and Cigna, 14).”

But in 1987, Congress passed an exemption to a Medicare Anti-Kickback statute, which created a safe harbor for group buying entities to accept payment from drug manufacturers in the form of rebates, with certain guardrails in place.

“These kinds of discounts seem contrary,” it said, “to basic American precepts of justice, as they would “effectively end the value of publicly posted prices” and “favor the large organized interests with competitive alternatives at the expense of the unorganized, uneducated, or captive.” That’s the main policy recommendation to the most conservative Republican President since Herbert Hoover.

They directed their PBM to preference their own drug through Cordavis and ignore the other biosimilars available on the market from smaller pharma companies, adding what I’m told is $50-100 million to CVS’s bottom line.

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