Summary: Recently, some of the largest drug companies have merged or formed alliances with some of the largest pharmacy benefit managers (PBM). PBMs manage the prescription drug part of health insurance plans covering millions of Americans. These ventures gained attention not only because of their size but because of concerns that the PBMs would automatically give preference to their manufacturer partners' drugs over those made by competitors. The results of GAO's analysis of PBM formularies--a list of preferred prescription drugs by therapeutic class, often with cost designations--indicate that continued oversight of mergers and alliances between pharmaceutical manufacturers and PBMs is warranted to ensure competition in the marketplace. For example, the changes in Medco's formulary that appear to favor Merck drugs do not necessarily show that Medco automatically gave preference to Merck drugs over those of competitors. However, the formulary changes support the Federal Trade Commission's decision to continue monitoring the Merck/Medco merger and other such ventures.
