US FTC expands probe into pharmacy benefit managers

FILE PHOTO: Signage is seen at the Federal Trade Commission headquarters in Washington, D.C.

(Reuters) -The U.S. Federal Trade Commission said it had sought information from two privately held companies that negotiate drug rebates on behalf of pharmacy benefit managers (PBMs) as part of its probe into how PBMs affect pricing of prescription drugs.

The two companies, Zinc Health Services and Ascent Health Services, are group purchasing organizations, that negotiate after-market discounts or rebates with drug manufacturers on behalf of PBMs and hold the contracts that govern those rebates.

Zinc Health negotiates rebates for CVS Health Corp and Ascent Health for Cigna Group's Express Scripts unit and Prime Therapeutics, which is a privately held PBM, the FTC said on Wednesday.

PBMs act as middlemen and negotiate rebates and fees with drug manufacturers, create lists of medications that are covered by insurance, and reimburse pharmacies for patients' prescriptions.

The inquiry aims to shed light on unfair PBM practices, which include directing patients towards PBM-owned pharmacies, using "complicated and opaque" reimbursement methods, as well as negotiating rebates and fees with drug manufacturers that may impact the cost of prescription drugs to payers and patients, the agency said.

The FTC last year demanded information from the six largest PBMs in the United States, including CVS' Caremark, Humana Inc, Express Scripts and UnitedHealth Group Inc's OptumRx.

(Reporting by Manas Mishra and Mariam Sunny in Bengaluru; Editing by Vinay Dwivedi and Shounak Dasgupta)