Senator’s Letter to FTC Comes as Local Oregon Pharmacies Close Due to High Costs Demanded by Pharmaceutical Middlemen
Washington, D.C. – U.S. Senator Ron Wyden today asked the Federal Trade Commission (FTC) to investigate recent consolidations in Oregon’s retail pharmacy market to assess whether large national pharmacy chains and health plans have acted to make this market less competitive.
Wyden’s letter to FTC Chair Lina Khan follows the recent announcement by Bi-Mart, a regional chain of pharmacies serving largely non-urban areas, that it’s closing 56 pharmacies across the Northwest, including 37 in Oregon.
“Exploitative business practices conducted by pharmaceutical middlemen are driving locally owned pharmacies out of business,” said Wyden, Chair of the Senate Finance Committee. “These practices are not unique to the Pacific Northwest, so I am calling on the FTC to investigate this trend on a national level so action can be taken to protect local businesses.”
Wyden’s letter highlights ongoing industry dynamics that pose significant challenges to small, independent pharmacies. One particular practice known as direct and indirect remuneration, a form of retrospective fees imposed on pharmacies by pharmaceutical benefit managers (PBMs) has been cited as a particular challenge for these pharmacies to maintain healthy finances. According to a report by the Centers for Medicare and Medicaid Services (CMS), PBMs increased pharmacy DIR fees under Medicare Part D by 91,500 percent from 2010 to 2019.
“My deep concern about the trends unfolding in Oregon lead me to request that the FTC investigate Walgreens’ acquisition of Bi-Mart pharmacies, including the surrounding circumstances,” Wyden added. “Although these closures represent a local example, as Chairman of the Senate Finance Committee, I am concerned that they represent a larger national trend in which a few powerful companies have gained the market power to drive competitors out of business and monopolize the market.”
In October, Wyden also urged the federal Centers for Medicare and Medicaid Services (CMS) to review pharmacy closures nationwide in the last five years with a focus on how fees imposed by Medicare Part D plans and middlemen known as pharmacy benefit managers are driving those closures.
The full letter to the FTC is here.
A web version of this release is here.