Sunday, June 11, 2023

Free Download of The Capitol Forum's Report: "Exclusive Drug Dealing: Anticompetitive Practices in the Pharmaceutical Supply Chain"

In 2020, I wrote a blog post entitled "It's the Rx rebates, stupid!" (see for the post) in which I revealed the reason everyone was overpaying for insulin was because of rebating paid by insulin-makers to secure PBM formulary placement. Not long after that post, Novo Nordisk revealed to its investors that it was spending 74% of its gross U.S. sales in the form of legally-exempted rebate kickbacks paid to PBMs (up 3% from the preceding reporting period). The good news is thanks to a series of actions by a number of different parties, the insulin PBM rebate price bubble finally burst when Eli Lilly, followed by Novo Nordisk and then Sanofi all announced in March 2023 that they would slash U.S. insulin list prices, and to pay for that, they would be opting out of the PBM commercialization channel for insulin. The price cuts are expected to happen at latest in early 2024 (at least for patent-expired insulin varieties). I recently blogged that we're seeing some early signs of a similar phenomenon in the anti-inflammatory biologic known by the brand-name Humira with a similar bubble burst in prices for that particular medicine.

Today, I am recommending my readers consider downloading a free report from The Capitol Forum. Details are provided at the end of this post. The Capital Forum describes itself this way:

"We are an investigative news organization providing our subscribers with detail-oriented reporting on antitrust, merger control, corporate investigations, and energy.

Our work combines cutting edge breaking news with in-depth analysis to better inform readers how policy & regulation affects market competition. Our editorial team reconstructs the policy process to yield market insights."

While The Capitol Forum is a subscription-based news outlet, their podcast known as "Second Request" is available free wherever you subscribe to podcasts, and I have occasionally been known to enjoy their perspective. Part of the reason is over the past 40 years or so, American society has enabled more and more monopolies and oligopolies to emerge under the laissez-faire ideology which emerged during the Reagan administration with the idea that a) it is easier to govern big entities because there are fewer of them and b) to ensure the U.S. remains competitive with entities based outside the U.S., we must allow our companies to become even bigger. Whether any of that has proven true is subject to debate, but as Dr. Elisabeth L. Rosenthal, MD told NPR (see for the interview) when her book "An American Sickness" was originally published in 2017:

"If you look at Switzerland, they have a largely market-based [health care] system. But - and this is a really important but - all the countries that have working marketplace-based systems have some form of control over pricing. It's not kind of the Wild West open market. They'll say this is the ceiling you can charge for that procedure. They'll say this is a bandwidth in which you can charge. And you can compete all you want below that ceiling or within that band.

But you can't just drive up prices to whatever the market will bear because - I think one of the legitimate analogies is if water or electricity was a totally free market, imagine what prices would be like."

Anyway, on The Capitol Forum's Second Request podcast, I enjoyed their perspective expressed in two fairly recent episodes in particular, including the April 4, 2023 episode entitled "Spotting Anticompetitive Conduct in Pharma Supply Chain, with Antonio Ciaccia"

and second one that gets somewhat less attention, but on June 1, 2023, Second Request covered another oligopoly known as drug wholesalers (where three companies control that market: McKesson, AmerisourceBergen [which recently changed its name to Cencora], and Cardinal Health control virtually all drug distribution in the U.S.] that really … concentrate all the drug sales in terms of drug inventory

That's a key reason why, when on LinkedIn, The Capitol Forum advertised access to a free copy of a "Special Report" with the title of "Exclusive Drug Dealing: Anticompetitive Practices in the Pharmaceutical Supply Chain" I really wanted to read it, and it was worth doing! To get the report, visit and provide them with a valid email address and your information. They'll email you access to their report.

In particular, the Special Report: Exclusive Drug Dealing: Anticompetitive Practices in the Pharmaceutical Supply Chain lays out two specific instances whereby the U.S. Federal Trade Commission (FTC) and the U.S. Department of Justice Antitrust Division may cite in litigation once the FTC's 6(b) study on PBM business practices concludes.

The report cites a public record of how two Multiple Sclerosis drugs, including Teva's Copaxone and Biogen's Tecfidera have a large body of publicly-documented anticompetitive behavior, which improve the FTC/DOJ Antitrust Division's odds for success. Specifically, the report cites how commercialization of those two drugs violates Sections 1 and 2 of the Sherman Act, Section 3 of the Clayton Act, Section 5 of the FTC Act and Section 2(c) of the Robinson-Patman Act. These examples may be cited when (not IF) we see government litigation against vertically-integrated (with commercial healthcare insurance companies) PBMs when FTC's 6(b) study concludes.

While I had thought we could potentially soon see the release of FTC's 6(b) study on PBM business practices, but on June 8, 2023, FTC announced it was expanding the scope of its study a little to include a compulsory order to a three group purchasing organizations (GPOs) that negotiate drug rebates on behalf of large PBMs which are owned and operated by the PBMs but are based offshore in Switzerland and Ireland (see for more on the study's expansion). That's a good thing, to be sure, but it also means that the FTC study won't likley be completed immediately. We may need to wait just a little while longer on that, but it means the study will be comprehensive. PBMs are likely pretty nervous right now, and their trade group known as Pharmaceutical Care Management Association (PCMA) will likely be bankrolling political candidates who are opposed to FTC  action in 2024. But PCMA is a small organization and unlike PhRMA, doesn't have tons of cash, so their stupid ads may not make much difference. The wheels of justice are now in motion.

Again, to download a free copy of The Capital Forum report entitled "Exclusive Drug Dealing: Anticompetitive Practices in the Pharmaceutical Supply Chain", visit

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