Pharmacist Al Squitieri says things are difficult on both sides of the counter at his pharmacy. Drug prices are going up, but pharmacies are making less and less.

“It's causing shortages because now pharmacies can order medications for the prices that the insurance companies or the middlemen are willing to pay the pharmacies," he said. 

Squitieri puts some of the blame on pharmacy benefit managers, or PBMs, who work as middlemen between drug wholesalers and pharmacies and are supposed to negotiate fair prices. But Squitieri says they aren’t doing that. 

“PBMs...they're making $100, $150 on a prescription," he said. "And we don't even know how much of that gets passed back on the rebates, back to the plan or not.” 

What You Need To Know

  • The FTC released filed a report on the dealings of pharmacy benefit managers (PBMs) 

  • The report found tPBMs were not following their stated purpose, and were "inflating drug costs and squeezing Main Street pharmacies" 

  • The scrutiny has increased pressure on Capitol Hill to pass PBM-reform bills, like the Pharmacists Fight Back Act

A new report from the Federal Trade Commission backs his position.

Vertical integration, the term for when companies in different stages of production of a product combine into one company, is partly to blame. The report says as PBMs integrate with health insurers and retail pharmacies, they’re push is to create the greatest bottom line for their companies, not patients or pharmacies like Squitieri's.

The Pharmaceutical Care Management Assocation representing American PBMs is refuting the report, calling it, in part, “based on anecdotes and comments from anonymous sources and self-interested parties.” 

“I don't think it's right for a middleman or a PBM that owns a pharmacy and then has to go into your pharmacy to get a prescription filled, and they're being paid by another pharmacy," Squitieri said. 

The FTC report has led to an increased emphasis on PBM transparency on Capitol Hill. Bills like the Protecting Patients Against PBM Abuse Act and Pharmacists Fight Back Act are meant to reduce some of power PBMs have, while putting savings back in the pockets of patients and local pharmacists. They're also gaining bipartisan support, including from New York representatives like Republican Marc Molinaro and Democrat Pat Ryan. 

Squitieri says these companies have become monopolies and it’s up to lawmakers to break them up. 

“A patient goes in to see a doctor and if the doctor feels like he wants to prescribe a certain medication for a patient, but it doesn't make more money for that insurance or for that facility, now the doctor is going to be told, 'hey, you can't write this prescription,'" Squitieri said. "You have to write a different prescription that's going to generate more money, more profits for the shareholders.”