Pharmacy Benefit Managers and the Federal Trade Commission: A Relationship Gone Sour

This Viewpoint provides a brief history of pharmacy benefit managers (PBMs), describes the ways in which PBMs have acquired influence in the prescription drug distribution system, and suggests possible scenarios surrounding the June 2022 decision by the Federal Trade Commission to launch an investigation into PBM business practices.

Does Regulating Dietary Supplements as Food in a World of Social Media Influencers Promote Public Safety?

Social media influencers promote a wide variety of products, including dietary supplements. Dietary supplements are regulated as foods, not drugs, by the US Food and Drug Administration and the Federal Trade Commission. This article details weaknesses in administrative and common law regulatory approaches to addressing some influencers' negligent misrepresentation claims about dietary supplements.

Trends in Cigarette Marketing Expenditures, 1975-2019: An Analysis of Federal Trade Commission Cigarette Reports

INTRODUCTION

With tightened regulations on cigarette marketing and decreased smoking, the major tobacco companies quickly shifted their marketing expenditures in recent decades to maintain profits. We investigated cigarette marketing expenditures in the United States from 1975 through 2019 to examine the trends in cigarette marketing expenditures over the past 45 years.

AIMS AND METHODS

Cigarette marketing expenditure data were obtained from the Federal Trade Commission (FTC) cigarette reports, 1975-2019. Based on individual expenditure categories included in the FTC reports, we created seven aggregate categories for marketing expenditures: Retail; Print; Out of home; Free tobacco products and gifts; Sports, public entertainment, and sponsorships; Telephone and digital; and Other. Dollar amounts and percentages by category were examined to assess trends in marketing expenditures.

RESULTS

Cigarette marketing expenditures increased since 1975 and peaked in 2003 at $21.1 billion (adjusted dollars); afterward, they declined dramatically until 2010 and remained stable at around $9 billion through 2019. While all other expenditures decreased, retail expenditures increased, comprising more than 50% of expenditures in 1988 and reaching about 98% in 2019. In the retail category, tobacco companies spent the most on promotional allowances, coupons, and retail-value-added bonuses between 1988 and 2003, after which price discounts dominated retail spending.

CONCLUSIONS

Overall, cigarette marketing expenditures peaked in 2003 and retail first became the leading category in 1988. Tobacco companies adapted their marketing strategies in retail and allocated most of their retail spending on price discounts since 2003 to lower cigarette prices.

IMPLICATIONS

The major US tobacco companies directed the bulk of their vast spending on the retail environment since 1988. Moreover, they have dramatically shifted their marketing strategies within the retail category from cigarette advertising before 2003 to customer-directed price discounts since then. This shift may imply a change in focus from recruiting new smokers to retaining current smokers, in response to tax increases and government regulations. Accordingly, restrictions on price-related promotions in retail and nontax strategies should be implemented to counter tobacco companies' marketing efforts in retail.

Legal and Ethical Analysis of Advertising for Elective Egg Freezing

This paper reviews common advertising claims by egg freezing companies and evaluates the medical evidence behind those claims. It then surveys legal standards for truth in advertising, including FTC and FDA regulations and the First Amendment right to free speech. Professional standards for medical advertising, such as guidelines published by the American Society for Reproductive Medicine (ASRM), the American College of Obstetricians and Gynecologists (ACOG), and the American Medical Association (AMA), are also summarized. A number of claims, many of which relate to the targeting of younger women for eOC, are found to breach legal and ethical standards for truth in advertising. The ethical implications of misleading advertising claims are also discussed, and the central narrative woven by OC ads - that egg freezing is empowering to women - is examined. The paper concludes that a more balanced approach to the risks and benefits of OC is necessary to truly respect women's autonomy. Moreover, justice requires us to look beyond a medical procedure accessible only to a minority of women in order to address inequities in the workplace.

A Comparison between Cigarette Topography from a One-Week Natural Environment Study to FTC/ISO, Health Canada, and Massachusetts Department of Public Health Puff Profile Standards

Standardized topography protocols for testing cigarette emissions include the Federal Trade Commission/International Standard Organization (FTC/ISO), the Massachusetts Department of Health (MDPH), and Health Canada (HC). Data are lacking for how well these protocols represent actual use behavior. This study aims to compare puff protocol standards to actual use topography measured in natural environments across a range of cigarette brands. Current smokers between 18 and 65 years of age were recruited. Each participant was provided with a wPUM™ cigarette topography monitor and instructed to use the monitor with their usual brand cigarette ad libitum in their natural environment for one week. Monitors were tested for repeatability, and data were checked for quality and analyzed with the TAP™ topography analysis program. Data from n = 26 participants were analyzed. Puff flow rates ranged from 17.2 to 110.6 mL/s, with a mean (STD) of 40.4 (21.7) mL/s; durations from 0.7 to 3.1 s, with a mean (STD) of 1.5 ± 0.5 s; and volumes from 21.4 to 159.2 mL, with a mean (STD) of 54.9 (29.8) mL. Current topography standards were found to be insufficient to represent smoking across the wide range of real behaviors. These data suggest updated standards are needed such that emissions tests will provide meaningful risk assessments.

The Federal Trade Commission and Consumer Protections for Mobile Health Apps

The Federal Trade Commission (FTC) has an important role to play in the governmental oversight of mobile health apps, ensuring consumer protections from unfair and deceptive trade practices and curtailing anti-competitive methods. The FTC's consumer protection structure and authority is outlined before reviewing the recent FTC enforcement activities taken on behalf of consumers and against developers of mhealth apps. The article concludes with identification of some challenges for the FTC and modest recommendations for strengthening the consumer protections it provides.

Advocacy, Research, and Anesthesia Practice Models: Key Studies of Safety and Cost-Effectiveness

The practice of anesthesia includes multiple competing practice models, including services delivered by anesthesiologists, independent practice by certified registered nurse anesthetists (CRNAs), and team-based approaches incorporating anesthesiologist supervision or direction of CRNAs. Despite data demonstrating very low risk of death and complications associated with anesthesia, debate among professional societies and policymakers persists over the superiority or equivalence among these models. The American Society of Anesthesiologists uses published findings as evidence for claims that anesthesia is safer when anesthesiologists lead in providing care. The American Association of Nurse Anesthetists cites its own research on safety and cost-efficiency outcomes to defend against these claims. We review and critique studies of the safety outcomes and cost-effectiveness of anesthesia delivery that have been cited in the Federal Trade Commission comment letters related to competition in health care, where each profession has laid out their case for how they ought to be recognized in the market for anesthesia services. The Federal Trade Commission has a role in protecting consumers from anticompetitive conduct that has the potential to impact quality and cost in health care. Thus, it is important to evaluate the evidence used to make claims about these topics. We argue that while research in this area is imperfect, the strong safety record of anesthesia in general and CRNAs in particular suggest that politics and professional interests are the main drivers of supervision policy in anesthesia delivery.

Federal Regulation of Infant and Toddler Food and Drink Marketing and Labeling

Foods and beverages marketed for infants, babies, and toddlers through 3 years of age is a $7 billion industry in the United States, incorporating a wide range of products, including infant formula and other types of drinks, foods, and snacks. The World Health Organization (“WHO”) found that mothers “are often inundated with incorrect and biased information” from direct advertising, health claims on products, information packs from sales representatives, and the distribution of samples of infant formula and “educational materials” by infant formula manufacturers. To address these problematic practices, in 1981, the WHO established the International Code of Marketing of Breast-milk Substitutes (the “Code”) to end the inappropriate marketing of infant formula and other food and drinks intended for children up to age two. In 2016, WHO expanded the definition of breastmilk substitutes to include milk and milk products specifically marketed for feeding infants and young children up to age three. However, the United States is one of a minority of countries that has not passed any legislation or regulation to implement the Code. Furthermore, U.S. regulation and enforcement actions have not kept pace with the introduction of new products and product categories and the profusion of labeling and marketing claims questionably implying nutritional and developmental benefits from these products.

Medical Marketing in the United States, 1997-2016

IMPORTANCE

Manufacturers, companies, and health care professionals and organizations use an array of promotional activities to sell and increase market share of their products and services. These activities seek to shape public and clinician beliefs about laboratory testing, the benefits and harms of prescription drugs, and some disease definitions.

OBJECTIVE

To review the marketing of prescription drugs, disease awareness campaigns, health services, and laboratory tests and the related consequences and regulation in the United States over a 20-year period (1997-2016).

EVIDENCE

Analysis (1997-2016) of consumer advertising (Kantar Media data for spending and number of ads); professional marketing (IQVIA Institute for Human Data Science, Open Payments Data [Centers for Medicare & Medicaid Services]); regulations and legal actions of the US Food and Drug Administration (FDA), Federal Trade Commission (FTC), state attorneys general, and US Department of Justice; and searches (1975-2018) of peer-reviewed medical literature (PubMed), business journals (Business Source Ultimate), and news media (Lexis Nexis) for articles about expenditures, content, and consequences and regulation of consumer and professional medical marketing. Spending is reported in 2016 dollars.

FINDINGS

From 1997 through 2016, spending on medical marketing of drugs, disease awareness campaigns, health services, and laboratory testing increased from $17.7 to $29.9 billion. The most rapid increase was in direct-to-consumer (DTC) advertising, which increased from $2.1 billion (11.9%) of total spending in 1997 to $9.6 billion (32.0%) of total spending in 2016. DTC prescription drug advertising increased from $1.3 billion (79 000 ads) to $6 billion (4.6 million ads [including 663 000 TV commercials]), with a shift toward advertising high-cost biologics and cancer immunotherapies. Pharmaceutical companies increased DTC marketing about diseases treated by their drugs with increases in disease awareness campaigns from 44 to 401 and in spending from $177 million to $430 million. DTC advertising for health services increased from $542 million to $2.9 billion, with the largest spending increases by hospitals, dental centers, cancer centers, mental health and addiction clinics, and medical services (eg, home health). DTC spending on advertising for laboratory tests (such as genetic testing) increased from $75.4 million to $82.6 million, although the number of ads increased more substantially (from 14 100 to 255 300), reflecting an increase in less expensive electronic media advertising. Marketing to health care professionals by pharmaceutical companies accounted for most promotional spending and increased from $15.6 billion to $20.3 billion, including $5.6 billion for prescriber detailing, $13.5 billion for free samples, $979 million for direct physician payments (eg, speaking fees, meals) related to specific drugs, and $59 million for disease education. Manufacturers of FDA-approved laboratory tests paid $12.9 million to professionals in 2016. From 1997 through 2016, the number of consumer and professional drug promotional materials that companies submitted for FDA review increased from 34 182 to 97 252, while FDA violation letters for misleading drug marketing decreased from 156 to 11. Since 1997, 103 financial settlements between drug companies and federal and state governments resulted in more than $11 billion in fines for off-label or deceptive marketing practices. The FTC has acted against misleading marketing by a single for-profit cancer center.

CONCLUSIONS AND RELEVANCE

Medical marketing increased substantially from 1997 through 2016, especially DTC advertising for prescription drugs and health services. Pharmaceutical marketing to health professionals accounted for most spending and remains high even with new policies to limit industry influence. Despite the increase in marketing over 20 years, regulatory oversight remains limited.

Time for Change: Stepping Up the FDA's Regulation of Dietary Supplements to Promote Consumer Safety and Awareness

People are often looking for that quick fix when it comes to their health. With dietary supplements so readily available on the market, the public assume that they have been through rigorous testing. Dietary supplements are not tested as much as consumers believe. The Food and Drug Administration (FDA) does not initiate the same type of testing and analysis for supplements as it does for food, drink and medication. Given that people are now choosing supplemental meal replacements and the like, as opposed to whole foods, regulations drastically need to be stepped up in an effort to emphasise public safety. An authoritative body needs to stop manufacturers from taking advantage of an already vulnerable marketplace. I suggest a new form of regulation that takes the pressure away from the FDA and into the hands of someone who wholly focuses on the supplement market. Dietary supplements have revolutionised the "health" world; however, the only way that the market can keep growing is through enacting more stringent rules and regulations--at the same time allowing consumers to maintain their autonomy and freedom when purchasing.

Hospital Consolidation: FTC May be a Stick in the Spokes of Hospital Mergers

For instance, in the case of Sanford Health's acquisition of Mid Dakota Clinic in North Dakota, the agency challenged the deal, claiming that the merged entity would control 75% or more of primary care and other health services in the Bismarck-Mandan metropolitan area.

Emboldened, the FTC Seems Ready to Fight More Mergers

A court ruling to block a merger in central Pennsylvania could mean more FTC sticks in the spokes of health care system mergers.

STOPPING DECEPTIVE HEALTH CLAIMS: THE NEED FOR A PRIVATE RIGHT OF ACTION UNDER FEDERAL LAW

This Article offers a thorough analysis of an important public health issue, namely how to confront the growing problem of deceptive claims regarding foods and dietary supplements, including increasingly prevalent but unverifiable claims. The authors call for the creation of a limited private right of action under the Federal Trade Commission (FTC) Act for deceptive health-related claims for these products. The proposal responds to the growing market for these products and the inadequacy of current laws and enforcement actions to prevent such claims. In crafting the limited private right of action, the authors attempt to enhance consumer protection without undermining federal agency primacy in enforcement. The Article ends with an appendix setting forth proposed language for a statutory amendment to the FTC Act incorporating the authors' proposal.

Waving the Red Flag: FTC Regulation of Deceptive Weight-Loss Advertising 1951-2009

This article documents the historical role of the Federal Trade Commission (FTC) in regulating deceptive weight-loss advertising, which the commission began to prioritize in the 1990s after a dramatic rise in complaints. It also includes the results of a content analysis of more than 150 FTC complaints filed between 1951 and 2009, which were used to analyze trends in advertising content, liability for deceptive practices, and outcomes. Regulatory efforts may not have curbed the use of bogus weight-loss claims, which have only increased over time. The FTC has made attempts to apply broad liability, but advertisers and corporate leaders continue to be named most frequently over other respondents, including advertising agencies, media outlets, and product endorsers. Although the number of complaints that result in financial penalties is increasing, the FTC lacks systematic and specific policies to adequately deter advertisers and address what continues to be a growing problem.

A Closer Look at the North Carolina Board of Dental Examiners and Who Can Practice Dentistry

On February 25, 2015, the U.S. Supreme Court rendered a six-to-three opinion in favor of the Federal Trade Commission in their dispute with the North Carolina State Board of Dental Examiners concerning teeth-whitening services provided by nondentists. That decision was the culmination of almost nine years of arguments and allegations that began with a disagreement regarding the definition of the practice of dentistry. The ethical aspect of this dispute resides in the one's perspective regarding the motivation behind the actions taken in the North Carolina State Board of Dental Examiners.

High-cost generic drugs--implications for patients and policymakers

Some older generic drugs have become very expensive, owing to factors including drug shortages, supply disruptions, and consolidations in the generic-drug industry. But generics manufacturers that legally obtain a market monopoly can also unilaterally raise prices.

Internet claims on dietary and herbal supplements in advanced nephropathy: truth or myth

BACKGROUND

The use of complementary/alternative medicine has garnered rising interest in recent years. Natural products including herbs, vitamins, and minerals are the most popularly consumed. The Internet is a ubiquitous source of information/market for these supplements.

AIM

To systematically evaluate the dietary and herbal supplement recommended for patients with CKD and ESRD on the Internet, and try to distinguish between the claim of the manufacturer and proven scientific data.

METHODS

A questionnaire assessing each website was formulated. Each product ingredient was recorded in the questionnaire by two independent reviewers and statistically analyzed.

RESULTS

Of the 184 websites, 28% claimed to decrease CKD progression, 60% did not advise to consult a doctor before taking the supplement, and >90% did not mention any potential drug interaction, disease interaction, or caution in use during pregnancy or in children. The ten common plant ingredients claiming to be beneficial in kidney diseases were uva ursi, dandelion, parsley, corn silk, juniper, celery, buchu, horsetail, marshmallow, and stinging nettle. In contrast to their claims, these substances were not adequately studied in humans. The available animal studies showed detrimental effects and potential drug interactions with commonly used medications in the CKD/ESRD population.

CONCLUSIONS

Nephrologists need to be cognizant of the lack of substantiated proven benefits of these substances and of the potential adverse effects in the animal models that can translate to the patients. Most importantly, the policy needs to change regarding the regulation of these products to prevent patient harm and misinformation.

Pulled in two directions. Providers pursuing coordinated care confused by antitrust actions

Providers pursuing mergers to better coordinate care for patients are becoming exasperated by antitrust actions, saying recent FTC cases have left them confused. "You can't know ahead of time whether something is or is not OK. There are certain extremes where you can know if something is extreme or perfectly OK, but there is a wide range of possibilities in between," says Dr. David Pate, left, of St. Luke's Health System, Boise, Idaho.

Long-term Medicaid excess payments from alleged price manipulation of generic lorazepam

BACKGROUND

Cost savings from the use of generic drugs versus brand-name drugs are well known. Both private and public prescription drug plans encourage the use of generic drugs through a variety of mechanisms. The magnitude of cost savings for a given generic drug is dependent on the degree to which the generic market is competitive. Should the competitive structure become compromised, higher prices and reduced cost savings may result. An alleged conspiracy between Mylan Laboratories and its active-ingredient suppliers in 1997 was associated with an increase in seller concentration in the generic lorazepam market. The Federal Trade Commission (FTC) alleged that Mylan raised costs to consumers by $120 million because of price increases for generic lorazepam from March through December 1998 and for generic clorazepate from January through December 1998. In November 2002, a settlement with Mylan was approved by the FTC, and a federal district court required Mylan to pay $147 million, including $28.2 million to state agencies including Medicaid.

OBJECTIVES

To (a) describe the seller concentration in the national Medicaid generic lorazepam market over a 19-year period from January 1991 through December 2009, (b) estimate the excess payments for generic lorazepam by Medicaid between 1998 and 2009, and (c) investigate potentially increased utilization and prices of 2 substitute pharmaceuticals: branded lorazepam (Ativan) and generic alprazolam (another widely used intermediate-acting benzodiazepine).

METHODS

Using Medicaid State Drug Utilization Data from the Centers for Medicare Medicaid Services, we calculated the 4-firm concentration ratio (CR₄) and the Herfindahl-Hirschman Index (HHI) for the Medicaid generic lorazepam market, along with pre-rebate reimbursement for pharmacy claims, number of claims (utilization), and average pre-rebate reimbursement per claim (average "price") for generic lorazepam, from 1991 through 2009. Medicaid's excess payments were estimated under 2 different assumptions regarding what the average generic lorazepam price would have been in the absence of the alleged conspiracy. To find counterfactual prices, the average per-claim reimbursement for lorazepam for the 4 quarters prior to the alleged conspiracy, $6.80, was inflated using (a) the quarterly change in the average per-claim reimbursement for generic alprazolam and (b) the Consumer Price Index (CPI) for all urban consumers, all goods. Potential impact of the alleged conspiracy on the branded lorazepam and generic alprazolam markets was investigated.

RESULTS

The average pre-rebate reimbursements per claim for generic lorazepam were $10.25, $23.12, and $8.48 in 1991, 1998, and 2009, respectively. For the same 3 years, CR₄ = 52.80, 76.02, and 86.74, while HHI = 905.71, 2,166.25, and 2,233.36. Medicaid's excess payments from 1998-2009 were estimated at approximately $625-$657 million. The data also suggest the possibility of small impacts on the utilization of branded lorazepam and the price of generic alprazolam.

CONCLUSIONS

Prior to the alleged conspiracy in 1997, average pre-rebate reimbursement per claim for generic lorazepam was declining, while seller concentration was rising. After a jump in average payment per claim in the years immediately following the alleged conspiracy, prices have gradually returned to their pre-1998 levels. However, the generic lorazepam market was more concentrated in 2009 than prior to the alleged conspiracy.