FTC warns PBMs about unlawful drug rebate practices through new enforcement policy

The Federal Trade Commission has voted unanimously to put pharmacy benefit managers and drugmakers "on notice" about a new enforcement policy against illegal bribes and rebate schemes that can block patient access to competing lower-cost drugs. 

The federal agency said it will use its full range of legal authorities to crack down on the practice of paying rebates and fees that may exclude competitors from offering cheaper drug alternatives, according to a June 16 news release.

The new policy comes shortly after the FTC announced a probe into the PBM industry and practices June 7.

The agency is specifically concerned that rebate practices are driving up the cost of insulin, which has increased 300 percent in the last two decades.

The enforcement policy may apply when drug companies pay rebates and fees to PBMs that stifle competition from less expensive generic and biosimilar alternatives. It may also apply when PBMs are incentivized to place expensive drugs on formularies instead of cheaper alternatives, shifting the cost to payers and patients.

"Today's action should put the entire prescription drug industry on notice: when we see illegal rebate practices that foreclose competition and raise prescription drug costs for families, we won't hesitate to bring our full authorities to bear," FTC Chair Lina Khan said.

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