In ProMarket: How the FTC Protected the Market Power of Pharmacy Benefit Managers

Date: 19 Feb 2021 | posted in: Retail | 0 Facebooktwitterredditmail

The FTC has long protected the power of a few dominant drug middlemen, like CVS, to crush local pharmacies and fleece Medicaid programs. In this ProMarket piece, Stacy Mitchell and Zach Freed look at how the FTC not only failed to act — but worked to stop states from doing so.

“When New York State Assemblyman Richard Gottfried set out to regulate a group of powerful corporate players in his state’s health care system, he was prepared to battle yet another muscular industry lobby. As chair of the Assembly’s Health Committee and a long-time advocate of health care reform, Gottfried has had plenty of fights with big insurers and providers over the years. This time, his enemies were Pharmacy Benefit Managers, or PBMs. PBMs manage prescription drug benefits for health insurers and state Medicaid programs, and Gottfried was seeing them engage in a pattern of price gouging and self-dealing.

What caught Gottfried off guard was the opposition he faced from another quarter: the Federal Trade Commission, created to safeguard Americans from concentrated corporate power, had taken a stance against state legislation like his that sought to rein in the PBMs.”

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Photo by Mike Mozart via Flickr. (CC BY 2.0)

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.