A year ago, the antitrust agencies got thousands of comments from us. And now they are telling us how they are acting. This is the nerdy stuff that matters, and you can participate.
Thanks for the heads up on the new merger guidelines. What a bright ray of hope in the darkness!
Here is the comment I submitted to the FTC:
I am 86 years old, have Bachelors in Physics from Caltech and a PhD in Economics from MIT. I started investing in the market in the 1960s and have followed market trends since then. Increasing numbers and sizes of mergers over time has been highly visible to me. At the same time, as a consumer and interested observer, I began comparing what was happening in industrial and distribution companies over time to what I remembered in the 1950s. By the 1980s, what stood out for me was contrast of worker-management relations then and in the 1950s. I recall that in the 1950s, a common goal of young people was to join a company expecting to work for it, and be cared for by it, for the rest of their lives. And indeed in the 1950s, this mutually beneficial contract was widely honored.
By the 1980s, fueled by junk bonds, Wall Street (short for all financial institutions), began buying up companies that were "not cost efficient," which simply meant that management was not squeezing their employees as much as possible. People who would come into an acquired company and fire people by the thousands, bust unions, and cut the quality of output were highly prized business luminaries. This led to declining quality of life for workers and consumers both. Fixed benefit retirement that was the norm in the 1950s has become nearly as extinct as the dodo -- greatly increasing retirement financial insecurity.
Over time, as more and more consolidation occurred, even though my income rose far fast than measured inflation, I felt less and less satisfied with what I purchased. Airline travel is a prime example. Supermarkets and Walmarts reduced the convenience and variety of buying. Education went from being eminently affordable (I paid under $1000 a year to attend Caltech) to becoming unaffordable except for the rich. Medical care went from the personal and affordable by nearly all to institutional and insanely expensive (I paid over $5000 for a single night's stay in a double room).
I have directly experienced the results of consolidation on the price of papaverine used in surgery and, in my case, to treat erectile dysfunction. When I started using it in about 2000, I paid $10 for 10 ml at a small pharmacy in Mendocino, California. Recently, I was quoted a price of $160 for 10 ml -- a 1600% increase in 23 years! This a generic drug that has around for a long time, no patent protection. But, the big pharmaceutical companies have been able to consolidate the production and distribution of papaverine to the point where it is more like a monopoly than a freely competitive market with many producers and sellers.
One of the most disturbing developments that I only became aware of recently is private equity "rollups" of related small local businesses to create effective monopolies and higher prices.
We are far gone down the path to allowing corporations and banks to become so large that they are "too big to fail" and "too big to regulate."
I heartily support your new merger guidelines. Without a revolution that stops further consolidation, the economic future of the common man will become ever more dismal.
Summers was always basically a free market absolutist. And if there was a disagreement, he would work to crush alternative voices. When I worked in thr 1990s to establish global AML rules as a means of making it harder for the wealthy and the corrupt to evade taxes, Summers was a huge barrier within the USG until the ruble crashed in 1998 and suddenly he saw the light of why just trusting the statistics was not going to be a reliable way to measure what was actually going on in the economic world. He briefly became an advocate of regulatory harmonization upward. But the lesson seems not to have stuck especially given his view generally that "the bigger the better." So unfortunately learned nothing seems about right.
I grew up Lutheran and, while my belief is a little tarnished, one thing I definitely believe in is the posting of theses on Cathedral Doors. Forward we go!
Hey matt, on your chart as to acquistions, in billions of dollars, threw me as to which side to read. as line chart in billions, but did say right side. left side topping out at 40 billion vs 240 right side.
OK assking here, as to making a statement to gov. or a model. GMO`s Monsanto`s buying EVERY grain, storage- elevators in the Nation. Were we had on avg. 3 different places to buy or sale grain, PER COUNTY in the 1980`s. Thus, by late 90`s or by 2000 we didnt have 3 Nationally. We didnt just lose a choice or a open market as to buying and selling, grain. Many counties, flat out lost a local place to sell or buy. Not counting, where a farmer WAS able to store his own seed in past for the next year of seeding. Could not, keep his own grain for future seeding, ONCE it was crossed over by a naighbors GMO pullen. It then became "Monsanto`s seed- property" not yours when it came from your own sweat, land and labor, which Monsanto`s didnt want you to store for reseeding, for you HAD to buy their mark-up seed for planting. ADD, by 2010 the corn gmo stopped working, had to use more then 125% spray pesticides, then before GMO corn.
Plus, me that time, I saw by a Sole company, had power as in, they could use this as a genocide, IF they wished too. Not sale to you or another Nation-county. IF and once they own it all.
If you ever want to know whether or not the Establishment Democrats are actually committed to gender equality and not just using it a cynical wedge issue to protect the ruling class they serve from well deserved tax increases and regulation, just remember that Larry Summers is a sexist pig who thinks women are bad at math and science (and said so when he was the President of Harvard) and yet is still feted and adored by the Dem leadership.
They don't care that Summers has been wrong about just about everything, just about all the time, helped destroy the middle and working classes, and is generally an asshole's asshole. His policies make them and their corporate donors rich. And that is the only fucking thing they care about.
When I was a child in the 1960s local businesses flourished. Throughout the 70s, things changed slightly, but local banks still benefitted our neighborhoods and local stores kept money circulating locally. In the 80s, slowly, local businesses were replaced by corporate chains. The decline in St. Louis accelerated throughout the 80s, especially the local banks being rolled up by larger banks again and again. Now every bank is owned by one of a few mega banks, the only small stores are gas stations owned by oil company monopolies, and life is very precarious indeed. Prices are as high as these monopolies want them to be.
The Clayton Act, if properly enforced by judges who understand the law and understand that monopolies and mergers have always increased prices for taxpayers, could have prevented all this costly consolidation that achieved, rather than even the slightest decrease in costs, a radical shift of local profits to international trusts who care nothing about the devastation of moving business profits from a town where they would be used to benefit the taxpayers, to some corporate office somewhere else where it only benefits the stockholders and banks.
The mere consideration of price was long understood as inadequate when judging the ill effects of any business merger. Vanderbilt created mergers of ferries in and out of Manhattan that actually lowered prices in order to destroy competition. So any consideration of the costs to the taxpayer of any merger has to weigh fairly the near-certainty that mergers result in higher profits for huge trusts but never result in lower costs for us, and this is what I think must be noted, our communities, too.
The job of the FTC should be to protect the taxpayer from the predations of businesses that are too big to fail. Any business that is too big to fail is too big to benefit our interests, and the national interest.
I compare monopolization to communism. Communism there is one party, and they rule everything. Monopolization you have one business running and ruling everything! Same difference!
These business leaders and pollical hacks (Lary Summers) who propose this are basically communists!
The Merger/Acquisitions of Pharmacy Benefit Managers by Health Insurers Harms Every American Whose Health Care Benefits Are Either Insured or Managed by Health insurer/PBMs.
While Congress has been struggling to legislatively reign in the perverse incentive that PBM’s have and to reign in health insurance company abuses the fact is things wouldn’t be nearly as bad as they are if the FTC had prevented any health insurer from acquiring or merging with PBS.
PBM’s don’t operate alone but in tandem with their parent health insurers, they gravely harm patients.
PBMS as captives of the largest health insurers, work in concert and gravely interfere with the sound medical decisions of doctors, often specialists in their fields of medicine, and the Insurer/PBMs don’t just endanger American lives but in fact not infrequently permanent destroy the health of tens if not hundreds of thousands of Americans and kill not an insignificant number, all so that they can increase their profits. One only has to look at the ranking of the largest insurers among the Fortune 50 to grasp the power this industry wields and what their prime motive is.
One of our Government’s highest duties is to protect the manifold interests of its citizens.
Yet evidence of pro health insurance and PBM bias and influence in Congress clearly was seen in the fact that a pro health insurer PMB kickback provision was easily slipped into a law that had nothing to do with health care, the recently enacted federal gun legislation last year contained the bit of legislation.
“SEC. 13101. EXTENSION OF MORATORIUM ON IMPLEMENTATION OF RULE RELATING TO ELIMINATING THE ANTI-KICKBACK STATUTE SAFE HARBOR PROTECTION FOR PRESCRIPTION DRUG REBATES. Section 90006 of division I of the Infrastructure Investment and Jobs Act (42 U.S.C. 1320a–7b note) is amended by striking ‘‘January 1, 2026’’ and inserting ‘‘January 1, 2027’’.
The for-profit health insurance industry has corrosively rotted the once intended communal protection of health insurance and related employee health benefit plans for hundreds of millions of Americans.
While doctors are painfully aware of the underregulated stranglehold health insurers and PMBs have on their patients’ care, the vast majority of doctors don’t have a clue how to change laws. Nor do they have the resources to combat the health insurance lobby.
Instead of looking after their insured patients’ best interest all major U.S. health insurers are public company’s whose boards of directors and senior management have unmistakable FIDUCIARY duties to their shareholders and whose shareholders and directors reward each of their chief executives with annual compensation packages in excess of $20+ Million dollars. These health insurers seek and achieve ever increasing profit margins at the expense of their insureds’ welfare. And when patients harmed by the acts of their insurers file lawsuits claiming the insurer has breached a duty to their insureds, time and time again these health insurers always deny that they have any fiduciary duty to their insureds and the courts agree with the insurers’ defenses, holding that the insurer has no fiduciary duty to their insureds.
According to the U.S. Census, in 2020, over 91% of the U.S. population is covered by some form of health insurance; more than ½ of that coverage is provided by private insurers. That’s over 323 Million Americans who need your help.
The for-profit health insurance industry has evolved unchecked for many decades, again, leading to health insurers’ ever-increasing interference with physicians’ sound medical decisions, based on insurers’ profitability not prudent patient care, thus creating insurance abuses that rival scenes from the worst horror movies imaginable. At least in the movies audiences are merely scared to death. With unregulated or poorly regulated health insurers, many tens of thousands of lives are put at risk every year.
These poorly regulated unconstrained publicly traded health insurance companies now with their highly profitable PBMs are held virtually unaccountable for harm done to their insureds, which results in the sometimes fatal, but often lifetime impairing mistreatment of insured patients.
All health insurers and their captive PBMs establish and constantly change the list of what medications they will pay for. These are called the insurer or PBMs’ “Formularies”. Formularies are frequently changed, sometimes more than once or twice a year, and almost always the purpose is not to list the best working medication but to produce the highest rebates and kickbacks (illegal in any other industry, but legal in health insurance) thus, not improving care nor reducing patient insured’s cost but simply increasing the health insurers’ bottom lines.
Today, in the United States private and sometimes even government provided health insurance is dominated by a mere handful of some of the largest publicly traded companies, almost all health insurers occupying a revered top place among the Fortune 50. In fact, the 3 largest PBMs owned by one of the 3 largest health insurance companies cover 80% of American insureds. Their reach for ever increasing profits has undermined the entire objective of pooling of risks.
But here is where you can do the most good. Like President Reagan said to Mr. Gorbachev, "… tear down this wall!" Tear down these conglomerates.
The 3 largest health insurance companies each merged with or acquired one of the 3 largest pharmacy benefit managers and together these behemoths negotiate and retain undisclosed rebates, fees, and price concessions (federally statutorily legal “kickbacks”), from drug manufactures.
The rebates and other price concessions are generally based on a percentage of the list price of a drug; consequently, there is a perverse financial incentive for PBMs to place higher priced drugs on their Formularies as many of the price concessions are legally “kept” by the PBM or “passed back” to their parent insurance company or even hidden in subsidiary “rebate aggregators”. PBMs frequently force patients onto higher priced drugs that cost their insureds greater out-of-pocket costs. There are many examples of preferred higher priced drugs in both commercial and Medicare formularies. For example, one major insurer put a $10K drug Zytiga to treat Prostate Cancer that has spread onto their approved formulary list, and yet delisted the $400 generic.
When a competing drug manufacturer offers a higher “kickback” it is not uncommon for health insurers to force patients off a medication that works for a substitute drug that is either less or totally ineffective in controlling their serious diseases, like Rheumatoid or Psoriatic Arthritis, Crohn’s Disease (again, unregulated Crohn’s disease can otherwise necessitate surgical removal of sections of patient insured’s large intestines, replacing same with permanent ostomy bags to collect their fecal waste for the rest of their lives), and even some types of malignant deadly Cancers.
Respectfully submitted,
Gary Lawson,
Gary Lawson, J.D., LL.M.
Exhibit- Total Compensation of Health Insurance Industries Top 6
Karen Lynch, CVS Health 2022 total compensation: $21,317,055
(CVS Health owns PBM CVS Caremark)
David Cordani, Cigna Group 2022 total compensation: $20,965,504
(Cigna Group owns PBM Express Scripts)
Gail Boudreaux, Elevance Health 2022 total compensation: $20,931,081
(Elevance was previously known as Anthem and before that Blue Cross Blue Shield. Elevance owns PBM Carelonrx)
Andrew Witty, UnitedHealth Group 2022 total compensation: $20,865,106
(United Health Group owns PBM Optum)
Bruce Broussard, Humana 2022 total compensation: $17,198,844
(Humana owns PBM Pharmacy Benefit Solutions)
Sarah London, Centene 2022 total compensation: $13,246,447
(Centene uses Cigna’s PMB Express Scripts)
Some CEO and their companies with comparable compensation.
I just submitted a written letter detailing our and many patient and family adverse experience with health insurer /Pharmacy Benefit Manager conglomerates. These should never have been permitted and they should be unwound.
Thanks for empowering us to offer feedback to the FTC!
Here's my submission:
My professional experience with mergers and monopoly power is indirect yet powerful. I nave been a school social worker for 25 years. Through this work, I come into contact with the children of parents who struggle to find affordable housing and adequate health insurance coverage. The parents struggle to find employment that offers them a wage that allows them to raise their children in a healthy and life-sustaining way. Their difficulty with dead-end, low wage work has a direct impact on their children's health and availability for learning. The lack of predictability in their schedules robs their children of access to enriching after school programming because they don't have transportation home. Monopoly power is an abstract concept with a profound and very concrete impact on the 25% of children in the US who live in poverty. If the 13 principles/merger guidelines proposed by the FTC can alleviate some of the suffering of low wage workers in this country, then they will create an important pathway for government to support some of our most vulnerable citizens.
Thank you for alerting your readers, including me, to this AntiTrust commenting opportunity. I will definitely write up the Intuit tax prep-accounting software monopoly issue again.
I am grateful for this work of describing the who and how of powerful influences in our own economy in this crucial time, that you, Matt, discern for us.
I had learned tax law for the first time as Reaganomics in 1983 so I knew the business first attitude already. And I value those who shout the alarm that it has gone downhill for worker protections in this country at least, ever since. This re-balancing of our collective economy is very important work. I encourage all to make their citizen comments in every way possible. Americans deserve better, way better than Greed-Takes All.
To what extent might the new guidelines impact government (especially military) spending - from the corporate side? Increased competition? What else? Or my wishful thinking?
Is this related?
"OSC is part of a broader administration-wide effort to ‘crowd-in’ private capital in areas where our efforts can boost our future security and prosperity.” (But only through violence that loops to further endanger security and prosperity?)
Thanks for the heads up on the new merger guidelines. What a bright ray of hope in the darkness!
Here is the comment I submitted to the FTC:
I am 86 years old, have Bachelors in Physics from Caltech and a PhD in Economics from MIT. I started investing in the market in the 1960s and have followed market trends since then. Increasing numbers and sizes of mergers over time has been highly visible to me. At the same time, as a consumer and interested observer, I began comparing what was happening in industrial and distribution companies over time to what I remembered in the 1950s. By the 1980s, what stood out for me was contrast of worker-management relations then and in the 1950s. I recall that in the 1950s, a common goal of young people was to join a company expecting to work for it, and be cared for by it, for the rest of their lives. And indeed in the 1950s, this mutually beneficial contract was widely honored.
By the 1980s, fueled by junk bonds, Wall Street (short for all financial institutions), began buying up companies that were "not cost efficient," which simply meant that management was not squeezing their employees as much as possible. People who would come into an acquired company and fire people by the thousands, bust unions, and cut the quality of output were highly prized business luminaries. This led to declining quality of life for workers and consumers both. Fixed benefit retirement that was the norm in the 1950s has become nearly as extinct as the dodo -- greatly increasing retirement financial insecurity.
Over time, as more and more consolidation occurred, even though my income rose far fast than measured inflation, I felt less and less satisfied with what I purchased. Airline travel is a prime example. Supermarkets and Walmarts reduced the convenience and variety of buying. Education went from being eminently affordable (I paid under $1000 a year to attend Caltech) to becoming unaffordable except for the rich. Medical care went from the personal and affordable by nearly all to institutional and insanely expensive (I paid over $5000 for a single night's stay in a double room).
I have directly experienced the results of consolidation on the price of papaverine used in surgery and, in my case, to treat erectile dysfunction. When I started using it in about 2000, I paid $10 for 10 ml at a small pharmacy in Mendocino, California. Recently, I was quoted a price of $160 for 10 ml -- a 1600% increase in 23 years! This a generic drug that has around for a long time, no patent protection. But, the big pharmaceutical companies have been able to consolidate the production and distribution of papaverine to the point where it is more like a monopoly than a freely competitive market with many producers and sellers.
One of the most disturbing developments that I only became aware of recently is private equity "rollups" of related small local businesses to create effective monopolies and higher prices.
We are far gone down the path to allowing corporations and banks to become so large that they are "too big to fail" and "too big to regulate."
I heartily support your new merger guidelines. Without a revolution that stops further consolidation, the economic future of the common man will become ever more dismal.
My rule of thumb with Larry Summers is that when he opines on an issue or policy I instinctively take the opposite viewpoint.
Summers was always basically a free market absolutist. And if there was a disagreement, he would work to crush alternative voices. When I worked in thr 1990s to establish global AML rules as a means of making it harder for the wealthy and the corrupt to evade taxes, Summers was a huge barrier within the USG until the ruble crashed in 1998 and suddenly he saw the light of why just trusting the statistics was not going to be a reliable way to measure what was actually going on in the economic world. He briefly became an advocate of regulatory harmonization upward. But the lesson seems not to have stuck especially given his view generally that "the bigger the better." So unfortunately learned nothing seems about right.
I grew up Lutheran and, while my belief is a little tarnished, one thing I definitely believe in is the posting of theses on Cathedral Doors. Forward we go!
It’s also worth remembering that monopolization in a product or service sector naturally drives those products and services to mediocrity.
Hey matt, on your chart as to acquistions, in billions of dollars, threw me as to which side to read. as line chart in billions, but did say right side. left side topping out at 40 billion vs 240 right side.
OK assking here, as to making a statement to gov. or a model. GMO`s Monsanto`s buying EVERY grain, storage- elevators in the Nation. Were we had on avg. 3 different places to buy or sale grain, PER COUNTY in the 1980`s. Thus, by late 90`s or by 2000 we didnt have 3 Nationally. We didnt just lose a choice or a open market as to buying and selling, grain. Many counties, flat out lost a local place to sell or buy. Not counting, where a farmer WAS able to store his own seed in past for the next year of seeding. Could not, keep his own grain for future seeding, ONCE it was crossed over by a naighbors GMO pullen. It then became "Monsanto`s seed- property" not yours when it came from your own sweat, land and labor, which Monsanto`s didnt want you to store for reseeding, for you HAD to buy their mark-up seed for planting. ADD, by 2010 the corn gmo stopped working, had to use more then 125% spray pesticides, then before GMO corn.
Plus, me that time, I saw by a Sole company, had power as in, they could use this as a genocide, IF they wished too. Not sale to you or another Nation-county. IF and once they own it all.
Is this a good example to write?
My Name is NoBody,(1vs160)
I'm so sick of the idea that 'BUSINESS' is synonymous with monopoly. Its utterly asinine and anti democratic.
If you ever want to know whether or not the Establishment Democrats are actually committed to gender equality and not just using it a cynical wedge issue to protect the ruling class they serve from well deserved tax increases and regulation, just remember that Larry Summers is a sexist pig who thinks women are bad at math and science (and said so when he was the President of Harvard) and yet is still feted and adored by the Dem leadership.
They don't care that Summers has been wrong about just about everything, just about all the time, helped destroy the middle and working classes, and is generally an asshole's asshole. His policies make them and their corporate donors rich. And that is the only fucking thing they care about.
https://www.theguardian.com/science/2005/jan/18/educationsgendergap.genderissues
Here's my comment, submitted a few minutes ago:
When I was a child in the 1960s local businesses flourished. Throughout the 70s, things changed slightly, but local banks still benefitted our neighborhoods and local stores kept money circulating locally. In the 80s, slowly, local businesses were replaced by corporate chains. The decline in St. Louis accelerated throughout the 80s, especially the local banks being rolled up by larger banks again and again. Now every bank is owned by one of a few mega banks, the only small stores are gas stations owned by oil company monopolies, and life is very precarious indeed. Prices are as high as these monopolies want them to be.
The Clayton Act, if properly enforced by judges who understand the law and understand that monopolies and mergers have always increased prices for taxpayers, could have prevented all this costly consolidation that achieved, rather than even the slightest decrease in costs, a radical shift of local profits to international trusts who care nothing about the devastation of moving business profits from a town where they would be used to benefit the taxpayers, to some corporate office somewhere else where it only benefits the stockholders and banks.
The mere consideration of price was long understood as inadequate when judging the ill effects of any business merger. Vanderbilt created mergers of ferries in and out of Manhattan that actually lowered prices in order to destroy competition. So any consideration of the costs to the taxpayer of any merger has to weigh fairly the near-certainty that mergers result in higher profits for huge trusts but never result in lower costs for us, and this is what I think must be noted, our communities, too.
The job of the FTC should be to protect the taxpayer from the predations of businesses that are too big to fail. Any business that is too big to fail is too big to benefit our interests, and the national interest.
I compare monopolization to communism. Communism there is one party, and they rule everything. Monopolization you have one business running and ruling everything! Same difference!
These business leaders and pollical hacks (Lary Summers) who propose this are basically communists!
The Merger/Acquisitions of Pharmacy Benefit Managers by Health Insurers Harms Every American Whose Health Care Benefits Are Either Insured or Managed by Health insurer/PBMs.
While Congress has been struggling to legislatively reign in the perverse incentive that PBM’s have and to reign in health insurance company abuses the fact is things wouldn’t be nearly as bad as they are if the FTC had prevented any health insurer from acquiring or merging with PBS.
PBM’s don’t operate alone but in tandem with their parent health insurers, they gravely harm patients.
PBMS as captives of the largest health insurers, work in concert and gravely interfere with the sound medical decisions of doctors, often specialists in their fields of medicine, and the Insurer/PBMs don’t just endanger American lives but in fact not infrequently permanent destroy the health of tens if not hundreds of thousands of Americans and kill not an insignificant number, all so that they can increase their profits. One only has to look at the ranking of the largest insurers among the Fortune 50 to grasp the power this industry wields and what their prime motive is.
One of our Government’s highest duties is to protect the manifold interests of its citizens.
Yet evidence of pro health insurance and PBM bias and influence in Congress clearly was seen in the fact that a pro health insurer PMB kickback provision was easily slipped into a law that had nothing to do with health care, the recently enacted federal gun legislation last year contained the bit of legislation.
“SEC. 13101. EXTENSION OF MORATORIUM ON IMPLEMENTATION OF RULE RELATING TO ELIMINATING THE ANTI-KICKBACK STATUTE SAFE HARBOR PROTECTION FOR PRESCRIPTION DRUG REBATES. Section 90006 of division I of the Infrastructure Investment and Jobs Act (42 U.S.C. 1320a–7b note) is amended by striking ‘‘January 1, 2026’’ and inserting ‘‘January 1, 2027’’.
The for-profit health insurance industry has corrosively rotted the once intended communal protection of health insurance and related employee health benefit plans for hundreds of millions of Americans.
While doctors are painfully aware of the underregulated stranglehold health insurers and PMBs have on their patients’ care, the vast majority of doctors don’t have a clue how to change laws. Nor do they have the resources to combat the health insurance lobby.
Instead of looking after their insured patients’ best interest all major U.S. health insurers are public company’s whose boards of directors and senior management have unmistakable FIDUCIARY duties to their shareholders and whose shareholders and directors reward each of their chief executives with annual compensation packages in excess of $20+ Million dollars. These health insurers seek and achieve ever increasing profit margins at the expense of their insureds’ welfare. And when patients harmed by the acts of their insurers file lawsuits claiming the insurer has breached a duty to their insureds, time and time again these health insurers always deny that they have any fiduciary duty to their insureds and the courts agree with the insurers’ defenses, holding that the insurer has no fiduciary duty to their insureds.
According to the U.S. Census, in 2020, over 91% of the U.S. population is covered by some form of health insurance; more than ½ of that coverage is provided by private insurers. That’s over 323 Million Americans who need your help.
some of the largest Fortune 50 companies, almost all with captive Pharmacy Benefit Manager affiliates, and these health insurers are menacing our national need for good healthcare [United Healthcare # 5 with $17.3 billion in earnings in 2021, $4.9 billion in profits in the first quarter of 2021 compared to $3.4bn in the same period in 2020, a 44% increase; Cigna #12; Anthem (BC/BS) #20; Humana # 40; https://fortune.com/fortune500/2022/search/?sector=Health%20Care https://www.fiercehealthcare.com/payers/unitedhealth-was-2021s-most-profitable-payer-heres-look-what-its-competitors-earned https://www.theguardian.com/business/2021/may/08/us-health-insurance-companies-2021-first-quarter].
The for-profit health insurance industry has evolved unchecked for many decades, again, leading to health insurers’ ever-increasing interference with physicians’ sound medical decisions, based on insurers’ profitability not prudent patient care, thus creating insurance abuses that rival scenes from the worst horror movies imaginable. At least in the movies audiences are merely scared to death. With unregulated or poorly regulated health insurers, many tens of thousands of lives are put at risk every year.
These poorly regulated unconstrained publicly traded health insurance companies now with their highly profitable PBMs are held virtually unaccountable for harm done to their insureds, which results in the sometimes fatal, but often lifetime impairing mistreatment of insured patients.
All health insurers and their captive PBMs establish and constantly change the list of what medications they will pay for. These are called the insurer or PBMs’ “Formularies”. Formularies are frequently changed, sometimes more than once or twice a year, and almost always the purpose is not to list the best working medication but to produce the highest rebates and kickbacks (illegal in any other industry, but legal in health insurance) thus, not improving care nor reducing patient insured’s cost but simply increasing the health insurers’ bottom lines.
Today, in the United States private and sometimes even government provided health insurance is dominated by a mere handful of some of the largest publicly traded companies, almost all health insurers occupying a revered top place among the Fortune 50. In fact, the 3 largest PBMs owned by one of the 3 largest health insurance companies cover 80% of American insureds. Their reach for ever increasing profits has undermined the entire objective of pooling of risks.
But here is where you can do the most good. Like President Reagan said to Mr. Gorbachev, "… tear down this wall!" Tear down these conglomerates.
The 3 largest health insurance companies each merged with or acquired one of the 3 largest pharmacy benefit managers and together these behemoths negotiate and retain undisclosed rebates, fees, and price concessions (federally statutorily legal “kickbacks”), from drug manufactures.
The rebates and other price concessions are generally based on a percentage of the list price of a drug; consequently, there is a perverse financial incentive for PBMs to place higher priced drugs on their Formularies as many of the price concessions are legally “kept” by the PBM or “passed back” to their parent insurance company or even hidden in subsidiary “rebate aggregators”. PBMs frequently force patients onto higher priced drugs that cost their insureds greater out-of-pocket costs. There are many examples of preferred higher priced drugs in both commercial and Medicare formularies. For example, one major insurer put a $10K drug Zytiga to treat Prostate Cancer that has spread onto their approved formulary list, and yet delisted the $400 generic.
When a competing drug manufacturer offers a higher “kickback” it is not uncommon for health insurers to force patients off a medication that works for a substitute drug that is either less or totally ineffective in controlling their serious diseases, like Rheumatoid or Psoriatic Arthritis, Crohn’s Disease (again, unregulated Crohn’s disease can otherwise necessitate surgical removal of sections of patient insured’s large intestines, replacing same with permanent ostomy bags to collect their fecal waste for the rest of their lives), and even some types of malignant deadly Cancers.
Respectfully submitted,
Gary Lawson,
Gary Lawson, J.D., LL.M.
Exhibit- Total Compensation of Health Insurance Industries Top 6
Karen Lynch, CVS Health 2022 total compensation: $21,317,055
(CVS Health owns PBM CVS Caremark)
David Cordani, Cigna Group 2022 total compensation: $20,965,504
(Cigna Group owns PBM Express Scripts)
Gail Boudreaux, Elevance Health 2022 total compensation: $20,931,081
(Elevance was previously known as Anthem and before that Blue Cross Blue Shield. Elevance owns PBM Carelonrx)
Andrew Witty, UnitedHealth Group 2022 total compensation: $20,865,106
(United Health Group owns PBM Optum)
Bruce Broussard, Humana 2022 total compensation: $17,198,844
(Humana owns PBM Pharmacy Benefit Solutions)
Sarah London, Centene 2022 total compensation: $13,246,447
(Centene uses Cigna’s PMB Express Scripts)
Some CEO and their companies with comparable compensation.
Brian T. Moynihan Bank of America
James D. Farley, Jr. Ford Motor
Walter W. Bettinger II Charles Schwab
H. Lawrence Culp, Jr. General Electric
I just submitted a written letter detailing our and many patient and family adverse experience with health insurer /Pharmacy Benefit Manager conglomerates. These should never have been permitted and they should be unwound.
You are no fire Matt. THANK YOU.
Thanks for empowering us to offer feedback to the FTC!
Here's my submission:
My professional experience with mergers and monopoly power is indirect yet powerful. I nave been a school social worker for 25 years. Through this work, I come into contact with the children of parents who struggle to find affordable housing and adequate health insurance coverage. The parents struggle to find employment that offers them a wage that allows them to raise their children in a healthy and life-sustaining way. Their difficulty with dead-end, low wage work has a direct impact on their children's health and availability for learning. The lack of predictability in their schedules robs their children of access to enriching after school programming because they don't have transportation home. Monopoly power is an abstract concept with a profound and very concrete impact on the 25% of children in the US who live in poverty. If the 13 principles/merger guidelines proposed by the FTC can alleviate some of the suffering of low wage workers in this country, then they will create an important pathway for government to support some of our most vulnerable citizens.
Thank you for alerting your readers, including me, to this AntiTrust commenting opportunity. I will definitely write up the Intuit tax prep-accounting software monopoly issue again.
I am grateful for this work of describing the who and how of powerful influences in our own economy in this crucial time, that you, Matt, discern for us.
I had learned tax law for the first time as Reaganomics in 1983 so I knew the business first attitude already. And I value those who shout the alarm that it has gone downhill for worker protections in this country at least, ever since. This re-balancing of our collective economy is very important work. I encourage all to make their citizen comments in every way possible. Americans deserve better, way better than Greed-Takes All.
To what extent might the new guidelines impact government (especially military) spending - from the corporate side? Increased competition? What else? Or my wishful thinking?
Is this related?
"OSC is part of a broader administration-wide effort to ‘crowd-in’ private capital in areas where our efforts can boost our future security and prosperity.” (But only through violence that loops to further endanger security and prosperity?)
https://defensescoop.com/2022/12/01/pentagon-creates-office-of-strategic-capital-to-bridge-the-valley-of-death-with-private-funding/