Staff Submits Comments on Pharmacy Benefit Managers to Virginia House of Delegates; Commission Approves Issuance of Strategic Plan for Fiscal Years 2006-2011; FTC Approves Final Consent Order in Matter of New Century Health Quality Alliance, Inc.

For Your Information

Commission approval of staff comments to the Virginia House of Delegates: The FTC has approved the filing of comments by the staffs of the Bureaus of Competition and Economics and the Office of Policy Planning with the Virginia House of Delegates on the subject of pharmacy benefit managers (PBMs). Specifically, the comments, made in response to a request by Virginia Delegate Terry G. Kilgore for the staff’s analysis of Virginia House Bill 945 (HB 945), address the proposed legislation’s impact on competitors and consumers. HB 945 would regulate some aspects of the contractual relationships between PBMs and health benefit plans (HPBs) and pharmacies.

According to the comments, which can be found on the FTC’s Web site as a link to this press release, the staff believes that if enacted, HB 945 is likely to have the unintended consequence of increasing prescription drug prices and, ultimately, possibly decreasing the number of Virginia consumers with insurance coverage for pharmaceuticals. Specifically, the staff believes that the bill likely would limit PBMs’ ability to offer lower-cost pharmacy networks to HBPs, and to implement HBPs’ plans to encourage consumers to use certain lower-priced drugs. Finally, the staff believes that the bill’s disclosure requirements may indirectly lead to higher drug prices for Virginia consumers.

The Commission vote approving issuance of the staff comments was 5-0. (FTC File No. V060018; the staff contact is Daniel Gilman, Office of Policy Planning, 202-326-3136.)

Release of Commission report: The Commission has approved the release of The Federal Trade Commission Strategic Plan for Fiscal Years 2006-2011, as required under the Government Performance and Results Act (GPRA) and through guidance issued by the Office of Management and Budget. Every three years, each government agency is required to prepare and submit an updated strategic plan regarding its program activities that covers at least the next five years. The FTC’s original strategic plan was prepared in 1997, in consultation with Congress and external “stakeholders” in the agency’s mission.

Issued by the Commission on September 30, 2006, the Strategic Plan for Fiscal Years 2006-2011 first presents a Message from the Chairman, an Overview of the FTC’s Mission, Vision, Strategic Goals, and Organization, and a Summary of Strategic Goals, Objectives, and Performance Measures. It then details how the plan will be implemented in the next five years in the areas of consumer protection and maintaining competition, on an objective-by-objective basis.

Finally, it includes a discussion of the factors affecting the achievement of goals, a description of the agency’s evaluation plans, and a list of the FTC’s GPRA stakeholders. The Commission vote to issue the plan was 5-0. It is now available from the Financial Management Office by emailing GPRA@ftc.gov and from the FTC’s Web site at: www.ftc.gov/opp/gpra. (File No. P961201; staff contact is Steven A. Fisher, Chief Financial Officer, 202-326-2202.)

Commission approval of final consent order: Following a public comment period, the Commission has approved the issuance of a final consent order in the matter concerning New Century Health Quality Alliance, Inc. and Prime Care of Northeast Kansas, L.L.C., et al. The vote approving issuance of the final order was 5-0. (FTC File No. 051-0137; the staff contact is David Narrow, Bureau of Competition, 202-326-2744; see press release dated August 24, 2006.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

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