A two-day virtual workshop from the Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ) mulled the current state of antitrust law enforcement in the pharmaceutical industry, discussing the role of pharmacy benefit managers (PBMs) in driving up prices for consumers.
“A competitively vibrant market protects access to existing drugs and promotes new innovation, but access to medicine is already in peril by untenable costs,” said Rebecca Kelly Slaughter, an FDA commissioner in the workshop, which was held June 14–15.
M&A plays a role in driving up costs, Slaughter argued. “When mergers diminish competition in pharmaceutical markets, the result is higher prices, which can have a devastating effect for patients,” she said. “Enforcement action is necessary to prevent such harms.”
The workshop was organized by the Multilateral Pharmaceutical Merger Task Force, formed in March 2021 by then-Acting FTC Chair Rebecca Kelly Slaughter.
The rising cost of drugs has become an area of increasing focus for FTC.
The workshop referenced a recent JAMA study that found the median launch price for new drugs in the U.S. increased from $2,115 in 2008 to $180,007 in 2021. By 2020, U.S. prescription drug spending exceeded $500 billion.
Slaughter noted that U.S. prescription drug spending was $30 billion in 1980.
Also in the virtual workshop, FTC chair Lina Khan noted that the agency had seen empirical reports showing that acquisitions made to shut down potential competitors “may be relatively common in the pharmaceutical industry.”
Khan described the need to encourage research and development in the pharma industry while arguing that “the work of antitrust enforcers can help ensure that companies are facing the right incentives to continue innovation and to make the fruits of the scientific feats widely available at affordable prices.”
She concluded that the most profitable pharma companies have fallen behind in drug discovery and development.
Khan underscored “how much work there is to be done” to ensure an even playing field in the pharmaceutical industry.
The FTC also believes pharmacy benefit managers (PBMs) play a vital role in drug spending. Accordingly, the commission announced an inquiry last week, asking the six top pharmacy benefit managers to share information on their business practices.