PCMA asks DOJ and FTC to investigate role of wholesalers in generic drug prices

On May 21, PCMA submitted comments to the Department of Justice (DOJ) Antitrust Division and the Federal Trade Commission (FTC) encouraging them to seek information about the business practices of drug wholesalers. The comments were submitted in response to an earlier request for public comments about reinstating guidelines for business collaborations.

The comments highlight that the three largest wholesalers move “virtually all prescriptions in the U.S., controlling 96% of the wholesale pharmaceuticals market.” Additionally, wholesalers own the largest pharmacy services administrative organizations (PSAOs) that negotiate on behalf of pharmacies to buy drugs from drug wholesalers. PCMA’s letter raises the question of how PSAOs may use private contract information to influence wholesale drug prices, particularly for generic drugs.

PCMA notes “Wholesalers that influence pharmacies into purchasing a particular volume of drugs or using a preferred list of drugs might limit competition from rival wholesalers or more competitively priced manufacturers. These arrangements could also enable wholesalers to incentivize pharmacy use of more profitable drugs that might not be the best financial deal for the pharmacy or the consumer. The letter concludes by urging the agencies to “issue guidance on collaboration that allows competition in the pharmaceutical ecosystem to flourish.