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Recently, the U.S. Senate Committee on Commerce, Science, and Transportation held a hearing to consider another piece of legislation that would expand the Federal Trade Commission (FTC), this time giving federal bureaucrats the power to impose new regulations and reporting requirements on Pharmacy Benefit Managers (PBMs). 

S. 127, the Pharmacy Benefit Manager Transparency Act (PBMTA) was recently re-introduced by Senate Commerce Committee Chair Maria Cantwell (D-Wash.).    

This comes as Lina Khan’s FTC has already made several attempts at reshaping entire industries, going far beyond their scope of power. 

S.127 further inserts the FTC into business-to-business contracts. It would prohibit PBMs from using basic auditing practices to combat fraud, waste, and abuse, prohibit routine contracting processes used to insulate payers from price fluctuations in the market, and prohibit them from lowering reimbursements for drugs. It would also require PBMs to disclose pricing information, which would hamper individual PBMs’ ability to negotiate for lower prices. 

During the hearing, Senator Ted Cruz (R-Texas) insisted that lawmakers must think more carefully before moving forward with this legislation:    

The bill before us… would give the FTC substantial regulatory power over PBMs. It seems the FTC has become a “catch-all” agency that Congress and the White House can use to regulate complex markets like prescription drugs or gas prices even when those markets might be reflecting problems caused by other government policies…  

… In short, I think we need to think carefully about advancing legislation to dramatically expand the FTC’s power – especially with no Republican counterweight – and to do so before the agency has even completed its PBM study.”  

Sen. Cruz explained how harmful it could be to expand the FTC’s power, especially under its current leadership, citing that “the FTC has gone down an alarming path of regulatory activism and overreach.” Further, he flagged important economic concerns regarding further regulation of PBMs. Cruz noted that a study – conducted a few years ago by the FTC – actually found that PBMs benefited consumers by lowering drug prices.   

Current FTC Chair Lina Khan – a leftist ideologue – has already taken aim at numerous industries including agriculture, health, telecommunications, and technology companies.

Two FTC commissioners explained that Khan has a “disturbing trend of pulling the rug out under from honest businesses and the lawyers who advise them, with no explanation and no sound basis.”  

Earlier this month, FTC Commissioner Christine Wilson announced her resignation, citing Lina Khan’s “disregard for the rule of law and due process.”   

This is unsurprising, as Khan’s “abusive” and “tyrannical” leadership has tanked morale agency-wide. A MLEX survey showed widespread dissatisfaction at the agency, even with those who agree with Khan’s radically expansive view of antitrust law. One staffer said: “There is a view inside the agency that there is a willingness to just kind of ignore the law and the facts sometimes if it’s going to further the ideological mission.”    

Under Khan’s leadership, the agency refuses to work within the law. Surely, the last thing this corrupt entity needs is more power over private businesses.   

Lawmakers should certainly be wary of expanding the FTC’s power in any way, specifically when new regulation would seemingly not benefit consumers.