FTC Staff Files Comments with New Jersey Assemblywoman on PBM Legislation; Commission Seeks Public Comments on Orders to Collect Information on Food Marketing

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Commission authorization of the filing of staff comments: The Commission has authorized the staff of the Office of Policy Planning, Bureau of Economics, and Bureau of Competition to submit joint comments to State Assemblywoman Nellie Pou regarding New Jersey Assembly Committee Substitute for Assembly No. 320 (A-320), which would regulate the contractual relationships between pharmacy benefit managers (PBMs) and both health benefit plans (HBPs) and pharmacies. Specifically, the Assemblywoman asked the staff to determine whether the proposed legislation is anticompetitive and would likely result in “increased costs of pharmaceutical care for employers, unions, and consumers.”

In its comments, the staff contends that A-320, if enacted, would limit the ability of PBMs, HBPs, and pharmacies “to enter into efficient, mutually advantageous contracts, and may increase pharmaceutical prices in New Jersey.” The comments point out that, although some lawsuits have raised questions about PBM conduct, “empirical evidence suggests that the potential problems that the bill attempts to address are not prevalent.” In fact, the Commission’s recent study of the PBM industry suggests that “HBPs can, and do, protect themselves from potential conflicts of interest in arms-length contracts with PBMs.” The comments provide additional details on the staff analysis of A-320, concluding that the bill likely would increase risk exposure in PBM/health plan contracting and adversely impact the efficient use of mail-order pharmacies; in addition, the bill might impede price competition among pharmaceutical companies or pharmacies and promote an undue degree of vertical integration in HBP/PBM organizations.

The Commission vote authorizing the staff to file the comments with Assemblywoman Pou was 5-0. A copy of the comments can be found on the FTC’s Web site and as a link to this press release. (FTC File No. V060019; the staff contact is Daniel J. Gilman, Office of Policy Planning, 202-326-3136.)

Publication of Federal Register notice: The Commission has approved the publication of a Federal Register notice requesting comments on proposed information requests. The FTC proposes to issue compulsory process orders to major food and beverage manufacturers, distributors, and marketers and quick-service restaurant companies for information concerning, among other things, their marketing activities and expenditures targeted toward children and adolescents. The notice provides background on the purpose of the proposal, details the types of information to be requested, and tells interested parties how and where to submit their comments. Comments are due to the Commission on or before May 18, 2007.

A copy of the notice can be found as a link to this press release and on the FTC’s Web site. (The staff contacts are Carol Jennings and Sarah Botha, Bureau of Consumer Protection, 202-326-3010 or 202-326-2036).

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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