Justice Department’s Antitrust Division is looking at healthcare conglomerates and pharmacy drug middlemen. • Ohio Capital Journal

“Hearing about the magnitude of this problem is an eye-opener for all of us, and it is also an affirmation,” Mekki said.

Mekki’s office is one of two major federal antitrust enforcers. The other, the Federal Trade Commission, is already investigating major research of pharmacy benefit managers and is suing them pricing practices related to insulin.

She spoke just after a roundtable discussion held by the American Economic Liberties Project, a group that advocates for policies to ‘the current crisis of concentrated economic power.”

Roundtable participants shared how they believe pharmacy benefit managers are driving community pharmacies out of business, making medications more expensive and, in some cases, making people a lot sicker.

When it comes to concentrated economic power, pharmacy benefit managers, or PBMs, and their parent companies—each of which are among the 15 largest companies in the United States by revenue—seem to be hard to beat.

PBMs represent insurers in drug transactions and they decide which drugs are covered.

And because just three PBMs control access to about 80% of insured patients, they have enormous leverage to extract ever-larger rebates from drugmakers. That is a practice that has been demonstrated increase costs for many consumers at the pharmacy counter.

As PBM parent companies become increasingly “vertically integrated,” they are major players in numerous parts of the healthcare chain, in ways that can create conflicts of interest. For example, the big three PBMs are the dominant middlemen in drug transactions, and they are all part of a company that also owns a top 10 insurer. So they might try to get better deals for their sister insurers than for their competitors.

The major PBMs also determine how much to reimburse pharmacies that dispense medications they buy wholesale. Because the PBMs control access to so many insured patients, independent pharmacies say they have no choice but to accept the contract terms offered.

“They say, ‘We’ll sign you if we can pay you what we want,’” says Benjamin Jolley, a Salt Lake City pharmacist who works with the Economic Liberties Project.

While the companies that own PBMs decide how much to reimburse pharmacies, they also compete with them.

Each of the big three – CVS, United Health and Cigna/Express Scripts – owns mail-order pharmacies, and CVS also owns the nation’s largest retail chain. In other words, healthcare conglomerates can decide how much to pay their own pharmacies And those of their competitors.

Low reimbursement is blamed for a wave of community pharmacy closures, and now reimbursement and difficult retail conditions are contributing to pharmacy closures. thousands of stores also belong to large chains. Experts fear the closures will hit the poor and elderly hardest almost impossible so they can talk to a healthcare provider in person about their medications and chronic conditions like diabetes and high blood pressure.

In an interview after Monday’s roundtable, the Justice Department’s Mekki said she could not discuss what her agency might do about PBMs and the companies that own them. But she said what she has learned so far seems reminiscent of practices in other industries that the Antitrust Division has taken action against.

“One of the most consequential things we have done at the Department of Justice is to think harder about the middleman economy,” she said. “Sometimes that means financial services like our Visa case. Sometimes it means ticketing, like in our Ticketmaster case. It seems like there are a lot of similar dynamics at play in the pharmaceutical industry.”

In the Visa case, Mekki’s division is suing the company, saying it uses its dominance in debit card infrastructure to crowds out competition and increases consumer costs. The Justice Department is also suing to break up the merger of Ticketmaster and Live Nation based on claims that the company is using its dominant position in entertainment ticketing, venues and promotion. to charge customers more and artists less.

These actions and those of the FTC are part of a newly strengthened approach to antitrust enforcement dying since the 1980s. Mekki said the Antitrust Division established a health care task force early this year to try to get a handle on anticompetitive practices in that sector.

The idea “stems from the recognition that keeping our health care antitrust efforts in silos is no longer going anywhere,” she said. “The economy is more consolidated and more integrated than ever before.”

Just as she came to Ohio to hear from stakeholders about PPE, Mekki said she and her colleagues were eager to hear from consumers.

“We are constantly in listening mode and if anyone has information about monopolization, collusion in all corners of the healthcare sector, from nurses to hospitals to pharmacies… we are interested and want to hear from you,” Mekki said.

She added that her office and the FTC have different resources and capabilities, so they work together and collaborate to avoid duplication of efforts. A health care investigation is especially hopeful because it has support from officials across the political spectrum, Mekki said.

“We’re encouraged that there is bipartisan — nonpartisan, really — interest in these issues,” she said. “Health care is so important. There is nothing more personal than the care we receive for ourselves and our families, and for good reason it now amounts to 20% of America’s GDP. We spend a lot of public dollars on these issues and we need to focus on how this money moves around the industry.”