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Consumer Groups Ask FTC to Implement Rules Against Pharma Rebate Walls

Families USA, SEIU, AFSCME, Public Interest Research Group, Consumer Action, Alliance for Retired Americans, Doctors for America, Treatment Action Group, and Unite Here submitted comments to the FTC asking the FTC to implement rules against monopolists like AbbVie from using exclusionary contracts (rebate walls) that keep patients from having access to the prescriptions that they need.

They made several points in the comments that support the implementation of a rule that exclusionary contracts by dominant pharma manufacturers such as AbbVie are per se illegal. AbbVie’s rebate walls, which keep rival drugs off of payors' drug formularies harm competition and patients.

AbbVie’s rebate walls protect Humira and helped with the launch of two of its new immunology drugs.

Given this recent history, it is not a huge leap to expect that if AbbVie is left unchecked that it could potentially leverage its market power to bundle rebates across Humira’s indications to deny preferred positions on drug formularies to its biosimilar rivals that are scheduled to enter the U.S. market in 2023.

Public comment to FTC re Rule Prohibition Exclusive Contracts 9.30.21
Download PDF • 238KB

The FTC enforcers and lawmakers have identified rebate walls and exclusionary contracts as competitive problems.

Accordingly, the FTC should use its authority to implement a rule that prohibits firms with market power from using exclusionary contracts. The litigation process takes too long to prevent harm to patients. Because of the very real harms from exclusivity, the FTC should prohibit, as a per se violation of the FTC Act, exclusive dealing, exclusionary payments, and related practices that substantially foreclose rivals from customers. Under the requested rule, the FTC could bring enforcement actions against firms like AbbVie that engage in exclusionary contract schemes.

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