The FTC should endorse a labor exemption...and commit not to interfere with small firms that challenge concentrated power through collective action 

WASHINGTON - The Open Markets Institute filed a comment letter urging the Federal Trade Commission to terminate the 2012 consent order governing Coopharma, a cooperative of independent pharmacies in Puerto Rico.  

The consent order bars Coopharma and its independent pharmacy members from collectively bargaining with CVS Caremark, Express Scripts, and other powerful pharmacy benefit managers (PBMs) and payors on reimbursement rates and other contractual terms.  

Legal director Sandeep Vaheesan said that this decree is unjust and should be set aside on legal and public interest grounds.  

“As Coopharma’s petition persuasively shows, the 2012 consent order perpetuates the profound inequality in power between independent pharmacists and PBMs. The FTC has studied and publicized the power of PBMs in the health care sector. Across the country, the market might of the PBMs has driven many independent pharmacies out of business to the detriment of the patients and communities that they serve,” writes Open Markets.  

The comment reminds the FTC that “in enacting the antitrust laws, Congress understood the difference between coordination that concentrates power and coordination that disperses it.”  

Enabling community pharmacy owners to bargain collectively for better rates and terms from powerful middlemen does the latter and empowers independent business proprietors to contest oligopolistic corporate power.  

Rather than treat it as a one-off matter, the FTC should use Coopharma’s petition as an opportunity to reevaluate its approach toward coordination among workers and small enterprises in a manner faithful to the letter and spirit of the antitrust laws.  

The FTC should endorse a labor exemption that permits both employees and independent contractors to organize and commit not to interfere with small firms that challenge concentrated power through collective action. 

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