Relationships Between Drugmakers and PBMs Under a Microscope

Contracts dating as early as January 1, 2006, between drugmakers and PBMs are being closely scrutinized lawmakers.

The US Attorney’s Office for the Southern District of New York has recently demanded information about contracts between drugmakers and pharmacy benefit managers (PBMs).

According to The Wall Street Journal, prosecutors approached Johnson & Johnson, Merck & Co, and Endo International Plc for this information in March.

Johnson & Johnson said in a 10-Q filing that their company, Janssen Pharmaceuticals, received a Civil Investigative Demand relating to contracts between them and PBMs from January 1, 2006 to the present.

Similarly, Merck reported in their 10-Q filing that they received a similar demand regarding the drugs Maxalt and Levitra from January 1, 2006 to present.

Endo International states that it will cooperate with the investigation into contacts for the drug, Frova. Their 10-Q, filed on March 6, 2016, cites that Endo will not be able to predict the outcome and cannot estimate the possible losses, if any.

The companies did not release the name of any PBMs in their respective filings.

Relationships between drugmakers and PBMs have been under increased scrutiny recently.

Other companies, such as AstraZeneca PLC and Novartis, have recently paid settlements to the Department of Justice regarding relationships with healthcare middlemen.

AstraZeneca agreed to pay $7.9 million last year to resolve allegations that the company provided discounts on certain drugs if the PBM, Medco Health Solutions, provided favorable coverage for their drug Nexium. However, AstraZeneca denied the allegations.

Novartis agreed to pay $3390 million in November to resolve allegations that the company provided discounts and rebates to certain specialty pharmacies that recommended doctors prescribe Novartis drugs. Novartis accepted responsibility for its actions, the article concluded.