CVS, Cigna PBMs targeted as lawmakers criticize new “anti-competitive” move

Pharmacy benefit managers run by health insurers have once again come under scrutiny in the U.S. Congress. Two leading Senate Democrats called on the U.S. FTC on Tuesday to investigate a new anticompetitive practice called co-manufacturing introduced by PBMs.

In a letter to the FTC Chair, Lina Khan, Sen. Ron Wyden (D-Ore.), chairman of the Senate Committee on Finance, and committee member Sen. Sherrod Brown (D-Ohio) singled out CVS Health (NYSE:CVS) and Cigna (NYSE:CI), which operate PBMs, Caremark and Express Scripts, respectively.

Wyden and Brown pointed to CVS (CVS) and Cigna’s (CI) manufacturing subsidiaries, Cordavis and Quallent Pharmaceuticals.

Established to produce biosimilars against AbbVie’s (ABBV) Humira in partnership with Sandoz (OTCQX:SDZNY) and Boehringer Ingelheim, Cordavis, and Quallent illustrated PBM’s latest attempts to widen their control over the healthcare supply chain, the duo argued.

“The concern with these “co-manufacturing” agreements is that they are a veiled attempt by PBMs to control additional parts of the supply chain, which has resulted in additional harm to consumers in the form of fewer drug choices and higher drug costs,” the senators wrote.

They urged the FTC to study co-manufacturing and “its impact on competition in the health care industry and costs for consumers.”

Sen. Wyden is a well-known critic of PBMs. He called for industrywide reforms after the FTC issued a report in July detailing how PBMs contribute to soaring drug prices in the U.S. Other health insurers, UnitedHealth (UNH) and Humana (HUM), also operate PBM businesses.