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Pharmacy Benefit Managers: Early Results on Ventures With Drug Manufacturers

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Report Type Reports and Testimonies
Report Date Nov. 9, 1995
Report No. HEHS-96-45
Subject
Summary:

Some of the largest drug companies have recently merged or formed alliances with some of the largest companies that manage prescription drug benefits for health plans, called pharmacy benefit managers. The ventures gained immediate attention from industry observers not only because of their size but also because of concerns about their effect on competition in markets for drug manufacturers' products and pharmacy benefit managers' services. This report discusses the role of pharmacy benefit managers in the health care industry, the objectives of these ventures, and specific concerns about the effectiveness of these ventures on competition in the markets served by drug companies and pharmacy benefit managers. GAO concludes that some mergers between drug manufacturers and pharmacy benefit managers warrant continued monitoring by the Federal Trade Commission to ensure that the pharmacy benefit managers do not give their manufacturing partners an unfair advantage by including their products on lists of preferred drugs that they cover and excluding those of competing firms.

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