Warren, Hawley, Harshbarger, Auchincloss Urge FTC, at Upcoming Meeting, To Release Second Report On Prescription Drug Middlemen

Warren, Hawley, Harshbarger, Auchincloss Urge FTC, at Upcoming Meeting, To Release Second Report On Prescription Drug Middlemen

Numerous state and federal investigations found prescription drug middlemen use their market dominance to overcharge taxpayers, hide profits, and squash competition.

Bipartisan letter "urge(s) FTC to issue its . . . report swiftly and continue investigating the serious effects of the (drug middleman) industry on patients, taxpayers, and independent pharmacies."

Text of Letter (PDF)

Washington, D.C. - Senators Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.), alongside Representatives Diana Harshbarger (R-Tenn.) and Jake Auchincloss (D-Mass.), wrote to the Federal Trade Commission (FTC) urging them to vote "yes" on releasing a second interim report on prescription drug middlemen, or pharmacy benefit managers (PBMs), at the FTC's Open Commission Hearing on Tuesday, January 14, 2025.

"PBMs were originally created to handle the prescription drug benefit on behalf of health plans, negotiating directly with drug manufacturers and setting pharmacy networks for their contracted payers," wrote the lawmakers. "But over the years, these once little-known middlemen have morphed into giant, vertically-integrated conglomerates that control every link in the drug coverage and delivery chain, including pharmacies and health plans."

In fact, during President Trump's first term, he branded PBMs as "famous middlemen" that "rip() off Medicare patients with high prescription prices."

In June 2022, the FTC launched an inquiry into the industry, requiring the six largest PBMs - which manage nearly 95% of all prescriptions filled in the United States - to provide information on their business practices and contractual arrangements to determine their effect on the affordability of prescription drugs.

Despite delay tactics from PBMs, the FTC released an interim staff report detailing how the largest PBMs use their size to "employ lopsided and unilateral contracting practices" that force independent community pharmacies to "enter into one-sided, non-negotiable contracts with the leading PBMs." The report also found that in some cases, these middlemen have forced patients with insurance to pay an unreasonably high out-of-pocket cost that is far beyond the true cost of their prescription drug.

The FTC's interim report helped inform various bipartisan proposals to rein in abuses in the PBM market. For example, last month, Senators Warren and Hawley, alongside Representatives Harshbarger and Auchincloss, introduced the Patients Before Monopolies (PBM) Act, legislation to prohibit joint ownership of PBMs and pharmacies, a gross conflict of interest that enables these companies to enrich themselves at the expense of patients and independent pharmacies.

"We expect a second interim report will shine further light on the industry that will be invaluable to legislators as the policy priorities of the 119th Congress take shape," added the lawmakers.

Senator Warren has led efforts to use every tool available to lower drug prices by reining in abuses in the prescription drug middleman and fighting Big Pharma's anti-competitive business practices:

• In December 2024, Senators Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.), alongside Representatives Diana Harshbarger (R-Tenn.) and Jake Auchincloss (D-Mass.), introduced the Patients Before Monopolies (PBM) Act, legislation to prohibit joint ownership of PBMs and pharmacies.
• In October 2024, Senators Elizabeth Warren (D-Mass.) and Marco Rubio (R-Fla.) reintroduced the United States Pharmaceutical Supply Chain Review Act, legislation to require the Federal Trade Commission (FTC), in consultation with the Department of Commerce, to produce a report on the impacts of foreign investment in the United States' pharmaceutical industry.
• In June 2024, Senator Warren and U.S. Representative Pramila Jayapal (D-Wash.) sent letters to eight pharmaceutical companies urging them to voluntarily de-list over 100 "sham" patent listenings, which would create opportunity for more competition and lower drug prices.
• In May 2024, Senator Warren and Representative Lloyd Doggett (D-Texas) sent a letter to Secretary of the Department of Commerce, Gina Raimondo, and Under Secretary Laurie Locascio, highlighting the lawmakers' new review of public comments on the agency's Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights and urged them to strengthen and finalize the guidance.
• In May 2024, Senators Warren, Bernie Sanders (I-Vt.), and Jeff Merkley (D-Ore.) wrote to the Chamber of Commerce expressing concern and demanding an explanation for the organization's opposition to the Biden administration's proposal to boost competition and lower drug prices for American families and businesses by allowing agencies to consider price when deciding to exercise their "march-in rights" under the Bayh-Dole Act.
• In March 2024, Senator Warren sent the letter in response to GlaxoSmithKline (GSK) discontinuing the brand-name version of Flovent HFA, the go-to inhaler for children, blasting the company for its price-gouging strategy that may cause millions of children to lose access to one of the few drugs that is appropriate to treat their asthma and allergies.
• In February 2024, Senators Warren and Angus King (I-Maine) and U.S. Representative Lloyd Doggett (D-Texas) led 75 lawmakers in sending a letter to the Biden administration in support of strengthening and finalizing its draft guidance to protect taxpayers and reduce prescription drug prices. The lawmakers submitted a public comment supporting the "Interagency Guidance Framework for Considering the Exercise of March-In Rights" and calling for changes to ensure increased transparency, oversight, and accessibility of medical products invented through taxpayer-funded research and development.
• In February 2024, Senator Warren and Representative Jayapal announced that three drug manufacturers pulled their sham patents after warnings, and urged the FDA to continue fighting against Big Pharma's patent abuse.
• In December 2023, Senator Warren published an op-ed in Newsweek commending the Biden administration's announcement that price can be considered in the government's decision to march-in on a drug, effectively lowering drug costs, and calling on Americans to fight back against an industry that has been taking advantage of them for decades.
• In December 2023, Senator Warren issued a statement after the Biden administration announced it would issue guidance to federal agencies that would allow the government to seize patents of certain expensive drugs developed with taxpayer support to create more competition and lower prices.
• In December 2023, Senator Warren and Representative Jayapal sent letters to the CEOs of 8 pharmaceutical companies urging them to voluntarily remove sham patent claims improperly included in the FDA's Orange Book and end their unlawful practices that delay competition and drive up costs for patients and taxpayers.
• In December 2023, Senator Warren and Representative Jan Schakowsky (D-Ill.) reintroduced the Affordable Drug Manufacturing Act, legislation that would radically reduce drug prices through public manufacturing of prescription drugs.
• In September 2023, Senator Warren and Representative Jayapal sent a letter to FTC Chair Lina Khan urging the FTC to issue a policy statement about the improper listing of drug-related patents in the FDA's Orange Book.
• In August 2023, Senator Warren and Representative Jayapal sent a letter to FDA Commissioner Dr. Robert M. Califf, urging him to close loopholes that pharmaceutical companies have exploited to block generics from entering the market, keeping drug prices high and maximizing profits.
• In June 2023, Senators Warren and Angus King (I-Maine) and Representative Lloyd Doggett (D-Texas) sent a letter to Department of Commerce (DOC) Secretary Gina Raimondo and Department of Health and Human Services (HHS) Secretary Xavier Becerra asking for information on the membership, process, timeline, and scope of work of the recently announced Interagency Working Group for Bayh-Dole.
• In April 2023, Senator Warren and Representative Jayapal sent a letter to Kathi Vidal, Director of the USPTO, calling on USPTO to take immediate action and use its existing administrative authorities to help lower drug prices and hold pharmaceutical companies accountable for anti-competitive business practices. The lawmakers outlined six specific actions that the USPTO should take.
• In February 2023, Senators Warren and Bernie Sanders (I-Vt.) and Representatives Jayapal and Katie Porter (D-Calif.) sent a letter to the USPTO, calling on the agency to give close scrutiny to any of Merck's requests for new patents for Keytruda, a biological treatment used to treat cancer, citing new reports about Merck's ongoing abuse of the patent system to protect its monopoly on the drug.
• In January 2023, Senators Warren and King and Representative Doggett led their colleagues in sending a follow-up letter to HHS Secretary Xavier Becerra that urged the Secretary to exercise his authority to lower the price of cancer treatment Xtandi.
• In December 2022, Senator Warren and Rep. Jayapal sent a letter to Director Kathi Vidal following up on their June 2021 letter about USPTO's efforts to hold pharmaceutical companies accountable for anti-competitive business practices and tackle high drug prices.
• In June 2022, Senators Warren and King and Representatives Doggett, Joaquin Castro (D-Texas), Sara Jacobs (D-Calif.), and Porter led a group of 100 members from across the ideological spectrum to urge HHS Secretary Xavier Becerra to swiftly act and use his existing authorities to lower prices on critical prescription drugs.
• In April 2022, Senator Warren sent a letter to HHS Secretary Becerra, sharing the findings from a letter that over 25 legal and public health experts sent to her outlining three powerful legal tools the Biden administration could use to lower drug prices.
• In March 2022, Senator Warren and her colleagues called out drug manufacturers for squeezing American families with rapid and widespread price hikes on prescription drugs.
• In February 2022, Senators Warren and King and Representative Doggett urged HHS to exercise its march-in rights for the life-saving cancer drug Xtandi to dramatically lower its price for millions of Americans.
• In June 2021, Senator Warren led a letter questioning PhRMA's lobbying efforts to block policies that would lower drug costs for millions of Americans.

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