Latest news with #LinaKhan
Yahoo
3 days ago
- Business
- Yahoo
How Democrats can pull off a win under a GOP trifecta: Dismantle the "legal" drug cartel
Just before President Trump pushed her out at the behest of his corporate donors, former Federal Trade Commission chairwoman Lina Khan released a damning report about the most rapacious and anti-competitive actors in the entire healthcare system: pharmacy benefit managers. These middlemen in the drug supply chain don't discover new medicines. They don't manufacture them. They don't even physically dispense most prescriptions. Yet they rake in tens of billions of dollars each year by driving up costs for everyone else — especially patients battling cancer, HIV, heart disease, and autoimmune conditions. In their report, FTC investigators documented how the PBM industry — which is dominated by just three firms, CVS Caremark, Express Scripts, and OptumRx, that collectively oversee roughly 80% of all prescriptions dispensed nationwide — imposed eye-popping markups on generic drugs used to treat deadly diseases. The PBMs' affiliated pharmacies charged hundreds — even thousands — of percent more than they paid to acquire drugs like the cancer treatment Gleevec and multiple sclerosis medication Ampyra. This isn't just a case of corporations being greedy. It's the result of a rigged market structure. In theory, pharmacy benefit managers could play a valuable role by negotiating with drug manufacturers for lower prices. Since they haggle on behalf of health plans that collectively enroll hundreds of millions of Americans, these PBMs have considerable leverage, and should theoretically drive a hard bargain and win enormous discounts. And in fact, they do. The problem is that those savings rarely flow to patients at the pharmacy. Instead, PBMs have made the supply chain so convoluted that almost nobody on the outside — whether the patient filling the prescription, the pharmacist dispensing it, the doctor writing it, or even the employer sponsoring the health plan — can easily tell how much a drug will cost after discounts, rebates, and various fees and clawbacks are applied. This opacity isn't an accident. It's by design. The lack of transparency enables PBMs to overcharge patients and health plans. Congressional investigations have revealed numerous instances in which PBMs steered patients towards more expensive drugs — which come with bigger discounts and rebates for the PBM — "even when there are lower-cost and equally safe and effective competing options" available. Some of the largest PBMs have even created offshore shell corporations to help pocket negotiated rebates — instead of passing them off to patients. Patients don't even realize when they're being ripped off. PBMs almost never disclose the total discounts they negotiate on specific drugs. So patients' cost-sharing obligations are calculated based on a drug's unnegotiated, inflated "list price," rather than its true discounted price. As a result, patients spend billions more out-of-pocket than they otherwise would if the discounts were publicized. These inflated costs are a key reason that 21% of American adults have skipped filling a prescription in the past year due to affordability concerns, while 12% have skipped doses or cut pills in half. The FTC also found clear patterns of self-dealing, where PBMs steered the most profitable prescriptions to their own affiliated pharmacies while boxing out independent community pharmacies. Thousands of independent pharmacies have closed in recent years, leaving entire counties without a single brick-and-mortar store where patients can fill a prescription. Finally, PBMs use their consolidated power to keep drugs off of health plan formularies — unless manufacturers pay exorbitant fees. This is a policy failure. But it's also a political opportunity. Congress has previously considered two bipartisan bills that would rein in PBMs' worst abuses. If reintroduced and passed, one bill would eliminate the perverse incentive for PBMs to favor expensive drugs by delinking PBMs' compensation from list prices. Another would require that negotiated discounts be passed directly to patients at the pharmacy. And just last month, FTC Chair Andrew Ferguson reignited an FTC lawsuit against pharmacy benefit managers (PBMs) that accuses them of anticompetitive behavior. Democrats have a chance to lead — and win — on this issue. Taking on PBMs doesn't just lower drug costs. It shows voters that we're willing to fight the entrenched interests hurting their families and their finances. It shows that we're the party that puts patients ahead of profiteers. We don't need to wait for the next election. We just need the political will to act.
Reuters
5 days ago
- Business
- Reuters
Mega-deal truce augurs gentler trustbuster norm
NEW YORK, May 29 (Reuters Breakingviews) - New competition cops are making their presence known. The U.S. Federal Trade Commission on Wednesday blessed the $35 billion merger of software developers Ansys (ANSS.O), opens new tab and Synopsys (SNPS.O), opens new tab, on the proviso, opens new tab that they offload some assets. It's the sort of truce that the previous administration broadly rejected, and heralds a gentler, albeit stricter than expected, trustbusting regime. Under Chair Lina Khan, the FTC consciously dismantled a looser antitrust policy ushered in during the late 1970s. Authorities ditched the practice of allowing companies to unite if they simply promised to abide by certain standards of conduct, or 'behavioral remedies' in the vernacular. They sued under novel theories of how deals might harm consumers and rejected even the premise of using divestitures to prevent overlapping business lines. Landmark court rulings reinforced the crackdowns, and more deals were abandoned before ever coming to light. Big transactions by technology giants Alphabet (GOOGL.O), opens new tab, (AMZN.O), opens new tab, Apple (AAPL.O), opens new tab and Meta Platforms (META.O), opens new tab withered, declining by roughly 60% from 2021 to 2023. A new merger rulebook ultimately codified the changes, but CEOs and merger practitioners anticipated that President Donald Trump's administration would wipe the slate clean. Instead, new FTC Chairman Andrew Ferguson embraced, opens new tab the updated guidelines, and on Wednesday he made clear that there would be no 180-degree turn. The aggressive strategies pursued by Khan and her Department of Justice counterpart, Jonathan Kanter, did encounter blowback. Some of their challenges ended in divestiture agreements, opens new tab, however contentiously. Aggressive dealmakers also got help from the courts. In an eight-page statement, opens new tab accompanying the conditional Synopsys approval, Ferguson and two colleagues stuck to a hard line while also calling Team Biden's approach 'hostile.' They rejected any 'categorical refusal' to consider divestiture remedies. And although agency officials acknowledged that the FTC had become 'too comfortable' with such caveats in the past, a tough new norm is taking shape. Some recent agreements planned for nuanced philosophical changes. Cloud computing company Salesforce (CRM.N), opens new tab, for example, will pay, opens new tab takeover target Informatica (INFA.N), opens new tab about 4.5% of the agreed $8 billion purchase price if regulators block the deal. Cybersecurity provider Wiz wrung a 10% fee from buyer Google. Eighteen-month contract lengths add extra breathing room, too. With the rules of the road becoming clearer, there's even a chance for a similarly modest rebound in M&A. Follow @JMAGuilford, opens new tab on X
Time of India
26-05-2025
- Business
- Time of India
FTC drops case against Pepsi alleging price discrimination
HighlightsThe United States Federal Trade Commission dropped its case against PepsiCo, which accused the company of price discrimination favoring Walmart. The lawsuit, which alleged violations of the Robinson-Patman Act, was criticized by Federal Trade Commission Chairman Andrew Ferguson for being a partisan stunt. Former Chair Lina Khan described the dismissal of the case as a benefit to large retailers, warning that it may lead to increased prices for consumers. The U.S. Federal Trade Commission on Thursday dropped its case accusing PepsiCo of price discrimination that favored Walmart, and criticized former Chair Lina Khan for rushing the case out. The lawsuit filed in New York had accused the soft drink manufacturer of violating the Robinson-Patman Act , a law that went largely unenforced for decades by the federal government. The case was filed in New York on January 17, days before President Donald Trump took office. "Taxpayer dollars should not be used for legally dubious partisan stunts," FTC Chairman Andrew Ferguson said. PepsiCo said the company "has always and will continue to provide all customers with fair, competitive, and non-discriminatory pricing, discounts and promotional value." A representative for Walmart did not immediately respond to a request for comment. The FTC had claimed PepsiCo's practices fed high consumer prices by placing other retailers ranging from large grocery chains to independent convenience stores at a disadvantage to Walmart. Khan called the dismissal of the case "a gift to giant retailers as they gear up to hike prices," in a post on social media platform X.
Time of India
24-05-2025
- Business
- Time of India
FTC drops case against Pepsi alleging price discrimination
The U.S. Federal Trade Commission on Thursday dropped its case accusing PepsiCo of price discrimination that favored Walmart, and criticized former Chair Lina Khan for rushing the case out. The lawsuit filed in New York had accused the soft drink manufacturer of violating the Robinson-Patman Act, a law that went largely unenforced for decades by the federal government. The case was filed in New York on January 17, days before President Donald Trump took office. "Taxpayer dollars should not be used for legally dubious partisan stunts," FTC Chairman Andrew Ferguson said. PepsiCo said the company "has always and will continue to provide all customers with fair, competitive, and non-discriminatory pricing, discounts and promotional value." A representative for Walmart did not immediately respond to a request for comment. The FTC had claimed PepsiCo's practices fed high consumer prices by placing other retailers ranging from large grocery chains to independent convenience stores at a disadvantage to Walmart. Khan called the dismissal of the case "a gift to giant retailers as they gear up to hike prices," in a post on social media platform X.>
The Hindu
24-05-2025
- Business
- The Hindu
How Trump 2.0 is changing the FTC, and what it means for Big Tech
Since President Donald Trump took office in January and replaced former FTC Chair Lina Khan with Andrew Ferguson, the U.S. Federal Trade Commission (FTC) has undergone a series of changes. Analysts have expressed concern that this change in leadership could provide Big Tech firms with excessive freedom, potentially leading to negative impacts on the internet experience for users worldwide. What is the FTC's role? The Federal Trade Commission (FTC) is an antitrust agency that regulates businesses and safeguards consumers to uphold American laws. It enforces new regulations to protect both consumers and employees, takes action against mergers that could lead to unfair competition, and initiates lawsuits against companies suspected of violating the law. The FTC is headed by five commissioners, who are nominated by the U.S. president and confirmed by the Senate. To ensure a balanced perspective, no more than three commissioners can belong to the same political party. The president appoints one of the commissioners as the Chair. What is Lina Khan's legacy at the FTC? During former U.S. President Joe Biden's term, the FTC was chaired by Lina Khan, who was celebrated for her paper on Amazon's increasing dominance. Ms. Khan was perceived as a staunch advocate who sought strict regulations on mergers and acquisitions by Big Tech firms. Under her leadership, the FTC initiated legal actions against Nvidia for its $40 billion merger with Arm, sought to prevent Microsoft's $69 billion acquisition of Activision Blizzard, attempted to halt Meta's acquisition of the virtual reality startup Within Unlimited, and reviewed Meta's acquisitions of Instagram and WhatsApp. While these legal efforts to curb Big Tech's influence, except for the Nvidia-Arm deal, were unsuccessful during her tenure, they effectively sent a strong message to Big Tech companies. Notably, the Nvidia deal was ultimately canceled by the companies. In September 2023, the FTC, along with 17 state attorneys general, filed a lawsuit against Amazon, alleging that it was illegally maintaining a monopoly power. Additionally, another FTC case focused on Amazon's alleged use of deceptive practices, known as dark patterns, to enroll users in its Prime service. How is the agency changing under Mr. Trump? After Mr. Trump took office in January, he appointed Andrew Ferguson as the FTC Chair, who expressed his commitment to Mr. Trump's 'deregulatory' agenda. Subsequently, Mr. Trump fired the two Democratic commissioners, Alvaro Bedoya and Rebecca Kelly Slaughter, leading them to sue Mr. Trump in response. Notably, some prominent Democrats, including Ms. Khan, also alleged that the firings were illegal. On the contrary, Mr. Ferguson, a Republican who had been nominated to the FTC by Mr. Biden, endorsed the firings. He asserted that Mr. Trump possessed the constitutional authority to dismiss commissioners and claimed that this action was 'essential to uphold democratic accountability for our government.' As a result, the FTC appointed Republicans Melissa Holyoak and Mark R. Meador as commissioners. Consequently, the once bipartisan FTC was transformed into a 3-0 Republican majority. How is Mr. Ferguson leading the FTC? In a CNBC interview on March 13, current FTC Chair Mr. Ferguson distanced himself from the regulatory 'uncertainty' he perceived under Ms. Khan. He stated that he would either litigate or 'get out of the way.' However, he acknowledged the difficulty in dropping his predecessor's enforcement actions due to the 2-2 composition of the commission. Just days after this comment, Mr. Trump fired the two Democratic commissioners. The changes at the FTC suggest a more lenient approach to business regulation as the independent agency now comes under Mr. Trump's direct control. Nevertheless, this does not imply that ongoing cases will be automatically dropped, despite tech billionaires like Meta CEO Mark Zuckerberg lobbying Mr. Trump and echoing the president's anti-DEI talking points. In some cases, including the one against Meta, the agency has been showing bipartisan solidarity against Big Tech firms. The FTC's ongoing lawsuit against Meta over the company's WhatsApp and Instagram acquisitions was initiated during Mr. Trump's first term. After a judge rejected it, the complaint was revised and resubmitted by the FTC under Mr. Biden. In another instance, on May 22, the FTC announced it was dropping the case against Microsoft's $69 billion acquisition of Activision Blizzard, citing lack of public interest. The FTC is also scheduled to take on Amazon in court this September over its Prime subscription. In a separate statement, Mr. Ferguson emphasised that the Trump-Vance FTC will never back down from taking on Big Tech. But, despite Mr. Ferguson's assurances, there are concerns that the FTC is rattled by Mr. Trump's spending cuts as a result of Elon Musk's DOGE-related layoffs. Will the FTC stop Big Tech firms from breaking antitrust laws? Mr. Ferguson has affirmed his commitment to upholding American antitrust laws, regardless of his personal or political beliefs. But a complete Republican majority at the FTC contradicts his claims. Furthermore, the FTC has requested information from Media Matters, a left-wing watchdog that monitors right-wing misinformation, regarding its communications with groups researching hate speech or misinformation, per a report by Reuters. This request comes after Elon Musk-owned platform X had previously sued the group for its coverage of hate speech on platform X. Trump's FTC also pushed to July the previously delayed enforcement of the 'click-to-cancel' rule proposed in 2023 by the previous FTC. This rule aimed to protect internet users from being trapped in hard-to-cancel subscriptions. Fired commissioner Mr. Bedoya and fellow commissioner Ms. Slaughter had stated that they would have voted against this delay. Despite these developments, the FTC under Mr. Trump is proceeding with a Biden-era antitrust probe into Microsoft, Bloomberg reported. The upcoming Amazon cases will also reveal whether Trump's FTC can independently uphold the law or if it has become a Republican arm of the government that will favor the e-commerce giant. Even though the bipartisan FTC has been dismantled, there is still strong Republican support for Big Tech regulation. For instance, Vice President J.D. Vance, who in the past cautiously praised Ms. Khan's approach to Big Tech regulation, is a Republican politician who supports Big Tech regulation.
