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Christine Mbithi
Email: christine.mbithi@350.org
Today at COP26, more than 20 countries and institutions, including the United States, Canada, Mali and Costa Rica, launched a joint statement committing to end direct international public finance for unabated coal, oil and gas by the end of 2022 and prioritize clean energy finance. After a wave of commitments to end international coal finance this year, this is the first international political commitment that also addresses public finance for oil and gas. If implemented effectively this initiative could directly shift more than USD 15 billion a year of preferential, government-backed support out of fossil fuels and into clean energy -- and much more if initial signatories are successful in convincing their peers to join.
Shifting public finance for energy out of all fossil fuels and into clean energy is an urgent task. The International Energy Agency (IEA) says that to limit global warming to 1.5degC, 2021 needs to mark the end of new investments in not just coal, but also new oil and gas supply.
Yet, new research by Oil Change International and Friends of the Earth US shows that between 2018 and 2020, G20 countries' international public finance institutions and Multilateral Development Banks (MDBs) still backed at least $188 billion in fossil fuels abroad. This was 2.5 times more than G20 and MDB support for renewable energy, which averaged $26 billion per year. Public finance for clean energy has stagnated since 2014, despite the need for it to grow exponentially to ensure universal access to clean energy and to stay below the 1.5degC limit. The IEA finds that annual public and private investments into clean energy should reach nearly $4 trillion by 2030.
The joint statement unites some of the largest historic providers of public finance for fossil fuels -- Canada, the United States, the UK and the European Investment Bank (EIB). However, other large financiers have yet to join them.
Laggards include Japan ($10.9 bn/yr), Korea ($10.6 bn/yr), and China ($7.6 bn/yr), which are the largest providers of international public fossil fuel finance in the G20 and together account for 46% of G20 and MDB finance for fossil fuels. Italy ($2.8 bn/yr) and Spain ($1.9 bn/yr), some of the biggest EU fossil fuel financiers, are also missing.
But campaigners hope that the joint statement can help raise pressure on these countries that are lagging behind, similar to the momentum in place on ending coal finance. On the same morning of the statement launch, activists took to the streets of Glasgow in inflatable Pikachus to urge Japan to stop funding fossil fuels.
The EIB has signed the statement and the civil society coalition, Big Shift Global, is urging the other MDBs to also get on board, including the World Bank Group, the African Development Bank, the European Bank for Reconstruction and Development, the Asian Development Bank, and the Asian Infrastructure Investment Bank. Collectively the MDBs still provided at least $6.3 billion each year to fossil fuel projects between 2018 and 2020. Earlier this week the MDBs provided an update on their joint Paris alignment efforts in which they confirmed their framework will have no exclusions for oil and gas projects.
The combination of big polluters and low-income countries signing the statement is positive, and challenges the assumption that developing country signatories want or need investments in fossil fuels to achieve their development objectives. Alongside fulfilling their stated goal of "prioritizing support fully towards the clean energy transition", campaigners remind signatories that the ability of this initiative to support a just and 1.5degC-aligned global energy transition will also hinge on avoiding loopholes allowing for a dash for gas, acting on debt relief, increasing grant-based climate finance, and securing a growing number of signatories to the statement.
Quotes:
Tasneem Essop, Executive Director, Climate Action Network International, said:
"Shutting fossil fuels down is critical for tackling the climate crisis. This announcement is a step in the right direction but must be scaled up with more governments and public finance institutions, including the Multilateral Development Banks, committing to end finance for fossil fuels. This public money needs to be urgently redirected into a just energy transition that ensures clean universal energy access for communities in the global South and support for communities and coal, oil and gas workers without saddling countries with any further debt."
Laurie van der Burg, Global Public Finance Campaigns co-Manager at Oil Change International, said:
"The signatories of today's statement are doing what's most logical in a climate emergency: stop adding fuel to the fire and shift dirty finance to climate action. Only this way can we avoid the worst climate crisis scenarios. We need to see much more of this to help deliver and exceed climate finance promises and support real solutions that meet community needs - particularly in the Global South. Other countries and institutions must follow suit."
Kate DeAngelis, International Finance Program Manager, Friends of the Earth US, said:
"Last year at this time I would not have thought we would see countries commit to ending billions of dollars in support for international fossil fuel projects. While this is welcome progress, countries, especially the US, must hold firm to these commitments, shutting off the spigot to fossil fuel companies like Pemex and Exxon. Laggards like Japan and Korea must also step up and join this commitment to enhance its efficacy."
Lidy Nacpil, Asian's Peoples Movement for Debt and Development, said:
"We have been calling for an end to public financing of fossil fuels for so long, governments should have responded earlier. The world has no more space or time left to accommodate the expansion of fossil fuel energy. Instead governments must act immediately and decisively for a swift and just transition to 100% renewable and democratic energy systems. There should be no exceptions, no reliance on unproven and unreliable carbon capture and storage technologies that hide the lack of ambition and justify some level of continued GHG emissions. Governments must also compel the private sector to stop funding new fossil fuel projects. We call on all countries, public financial institutions, and private financiers to commit and disclose concrete plans to end all support and financing, direct and indirect, for all fossil fuels -- coal, gas and oil. Anything less will not be enough to limit global temperature rise to 1.5degC."
Ayumi Fukakusa, Friends of the Earth Japan, said:
"While world leaders commit to phasing out fossil fuel financing, Japan is the second largest public financier for fossil fuel and even still supports new coal projects both domestically and internationally. Japan, again failed to show its leadership for climate action. In addition to that, right before the COP26 started, a Japanese public financier decided to finance the LNG Canada project. The associate Coastal GasLink Pipeline is quite controversial. Next to being completely incompatible with climate goals, a UN Committee called out the lack of "Free prior, and informed consent (FPIC)" for the project. This is unacceptable."
Joojin Kim, Solutions for Our Climate, said:
"While the commitment represents a step forward in the global response to climate change, it is disappointing to find that major fossil fuel financing countries like South Korea have not joined the announcement. When it comes to public financing of fossil fuels, Asian economies like South Korea and Japan are among the largest contributors in the world. The world must know that the amount of fossil fuel public financing provided by these countries is several times (in the case of South Korea, thirteen times) higher than the amount they have provided for coal power project financing. These nations should immediately end public fossil fuel financing, instead of contributing to the build up of stranded assets around the world."
Daniel Willis, climate campaigner at Global Justice Now, said:
"This joint statement is welcome and necessary progress in the struggle to shift public finances away from fossil fuels, but that should not distract us from the challenges ahead. Just last week, MPs in the UK condemned the British development bank CDC Group's failure to stop funding gas infrastructure. When it comes to the climate crisis, every investment in fossil fuel infrastructure is like pouring petrol on a house fire. Hopefully we will now see the UK government get its own house in order by ending trade and development finance for gas power and rescinding licenses for North Sea oil exploration."
Paul Cook, Head of Advocacy, Tearfund, said:
"There is no room for new fossil fuels if we are to deliver climate justice for millions of the most vulnerable people around the world. This announcement is another nail in the coffin for the fossil fuel era as we seek to build a cleaner, safer and fairer world. We now urgently need others to join this commitment and go further by phasing out fossil fuels at home and abroad."
Dean Bhebhe, African Climate Reality Project, said:
"The African Development Bank and other Development Financial Institutions need to prioritize the development and implementation of a fossil fuel finance exclusion policy that will not fund, provide financial services, or capacity support to any coal, gas, or oil project or related infrastructure project that is carbon intensive on the African continent by 2022. At the least, establish an immediate ban on any new fossil fuel projects and publish a roadmap for phasing out all fossil fuel development financing to advance the just transition in line with the Paris Agreement. The policy should guide a managed and equitable phase-out, taking into account principles of equity and justice for those most affected. We need real climate action now."
Bronwen Tucker, Canada Lead at Oil Change International, said:
"This is one of the only climate commitments from Trudeau that has concretely addressed the oil and gas sector, and hopefully the beginning of many more. It means Canada will face lower risk of economic shocks from our overexposure to this sunsetting industry and that this influential financial support can be redirected to just transition and renewable energy globally instead. Today's announcement is a credit to the climate movement and Indigenous land defenders that have been pushing Trudeau to take real climate action since the day he took office. But the federal government should also hear loud and clear that they must keep their election promise and extend this commitment to cover Export Development Canada's closely related domestic finance for oil and gas as well."
Nick Bryer, European Campaigns Director, 350.org, said:
"Every cent that goes into fossil fuels is taking us further in the wrong direction. It's shocking that public money is still going into coal, oil and gas, when we so desperately need to keep fossil fuels in the ground, and invest in real solutions instead. It's hypocritical for any country to call themselves a climate champion if they're still helping to bankroll the fossil fuel industry."
Jon Sward, Environment Project Manager, Bretton Woods Project, said:
"The statement is an important first step in building international consensus that ending finance for fossil fuels and increasing support for a just energy transition in low- and middle-income countries are key aspects of achieving the goals of the Paris Agreement. It is disappointing that the World Bank - and many of its MDB counterparts - has chosen not to sign on to the statement. The UK, US, and other government signatories to the statement must continue to push for the World Bank and other international financial institutions to end support for fossil fuels while scaling up their support for clean energy systems that ensure a just transition for workers and communities."
Robin Mace-Snaith, Policy Lead - Climate and Energy, CAFOD, said:
"This statement is a start, but we urgently need more countries on board. Public finance shouldn't be anywhere near fossil fuels if we want any chance of keeping within 1.5degC. We challenge all signatories to ensure that the limited and clearly defined circumstances they reference are not just loopholes to continue supporting the fossil fuel sector. What's needed is a just energy transition, bringing electricity to the over 750 million people without and ensuring no community is left behind as a result. For many communities on the frontline of climate change, time has already run out, we must consign all fossil fuels to history now."
Lisa Fischer, Programme Leader Climate Neutral Energy Systems, E3G, said:
"This statement is a powerful signal to policy makers and investors alike that high climate and investment risks are an inherent part of oil and gas finance, and that no investment in new oil and gas supply is needed. It shows growing confidence that employment and revenue opportunities are strongest in the clean energy sector. Every cent of public finance should be used to open these opportunities for nations across the globe."
Maria Marta Di Paola - Research area director, Fundacion Ambiente y Recursos Naturales (FARN), said:
"While Global North countries and institutions are signing pledges on climate finance, they are still investing millions in extractive projects in Global South countries. For example, between 2016 and 2020, 88% of the World Bank Group investments in the energy sector in Argentina went to fossil fuels and the rest to renewables.
Global North countries should play a lead role in the transition to zero carbon economies coping with the singularities and needs of the Global South. This statement could be a clear sign of the risk associated with relying on fossil fuels to develop in the Global South."
Lucile Dufour, Senior Policy Advisor, International Institute for Sustainable Development, said:
"Shortly after the world's largest economies have ruled out overseas finance for coal, this statement shows that a much bigger shift is underway: one that could soon mark the end of not just coal, but also oil and gas finance. The science is clear that public support must be directed towards clean energy to avoid locking countries into high-carbon pathways, imperiling economies, and the global climate. Signatories should deliver boldly on their commitment and continue building momentum after COP26, to ensure other governments and institutions follow suit."
Katharina Rall, Senior Environment Researcher, Human Rights Watch said:
"This commitment to end international public finance for fossil fuels by 2022, if followed by effective implementation, will be an important step toward governments meeting their human rights obligations to address the climate crisis. All governments need to urgently end all support for fossil fuels and ensure a just transition to affordable clean energy to help prevent catastrophic climate impacts on human rights. Countries that choose not to sign on--including Japan, South Korea, Italy -- are signaling a lack of regard for their human rights obligations and for the rights of communities around the world already facing a mounting toll from climate impacts."
350 is building a future that's just, prosperous, equitable and safe from the effects of the climate crisis. We're an international movement of ordinary people working to end the age of fossil fuels and build a world of community-led renewable energy for all.
"As a cease-fire in Gaza is near, Israel is expanding its assault on the West Bank," said one expert. "It was always a war on Palestinian existence."
As negotiators in Qatar navigated the " final stage" of a cease-fire agreement to end the U.S.-backed Israeli assault on the Gaza Strip, Israel's forces on Tuesday continued to kill Palestinians in the besieged coastal enclave and the illegally occupied West Bank.
Since the Hamas-led October 7, 2023 attack, the Israel Defense Forces (IDF) have killed at least 46,645 Palestinians in Gaza and wounded 110,012, with over 10,000 others missing, health officials said Tuesday. The true death toll could be much higher. A peer-reviewed analysis published last week in The Lancetfound that the official tally through last June was likely a 41% undercount.
The Palestinian National Authority's news agency WAFA reported Tuesday that IDF shelling killed at least two civilians at the Nuseirat refugee camp and a correspondent in Gaza City "said that Israeli warplanes fired missiles at a house in the Sheikh Radwan neighborhood, north of Gaza City, and another house in the Manara neighborhood, south of Khan Younis City, killing several civilians and injuring others."
According to multiple media outlets, Israeli forces also killed at least 13 people in an attack on a home in Deir al-Balah.
Israel faces a genocide case at the International Court of Justice over its assault on Gaza and in November the International Criminal Court issued arrest warrants for Israeli Prime Minister Benjamin Netanyahu and his former defense minister, Yoav Gallant, as well as Hamas leader Mohammed Diab Ibrahim Al-Masri.
In addition to waging war on Gaza over the past 15 months, Israel has stepped up its military activity in the West Bank—where a Tuesday strike on the Jenin refugee camp killed at least six Palestinians and wounded several others. The Times of Israelreported that "the IDF said it carried out the strike in a joint operation with the Shin Bet, without immediately providing further information."
The Israeli newspaper also noted that "on Tuesday evening, as on many previous Tuesday nights, thousands gather for a unity rally of prayer and song held in Tel Aviv's Hostages Square," while hundreds of right-wing demonstrators blocked "an intersection in central Jerusalem, in protest of the ongoing hostage negotiations between Israel and Hamas."
According to a draft obtained by The Associated Press, the first part of the three-stage deal would involve a halt to the fighting, both sides releasing captives, displaced Palestinians in Gaza returning home, and more humanitarian aid entering the strip.
Phase two would feature a declaration of "sustainable calm" and Hamas freeing more hostages in exchange for additional Palestinian prisoners and the full withdrawal of Israeli troops from Gaza, AP reported. The third part would include an exchange of bodies, a reconstruction plan for the strip—where civilian infrastructure is in ruins—and the reopening of border crossings.
"The terms of the deal being negotiated are largely consistent with what was on the table last May when outgoing President Joe Biden first announced it. Biden allowed Netanyahu to steamroll him for months—rewarding Israel with billions of dollars in arms transfers and political support after rejecting that cease-fire deal," Jeremy Scahill detailed at Drop Site News.
The latest cease-fire talks come as U.S. President-elect Donald Trump prepares for his inauguration next Monday. The Republican has been pushing for a resolution to Israel's assault on Gaza—or at least an appearance of one—before he returns to office.
"The fact that Trump emerged as the decisive player in pushing a potential cease-fire forward is evidence that Biden never used the full powers available to a sitting U.S. president to seal the deal in the summer," wrote Scahill. "While Trump has publicly repeated his threat that he will 'unleash hell' on Hamas if the Israeli hostages are not freed, his pressure has not been solely focused on Hamas; Trump and his aides have made clear to Netanyahu that the president-elect expects Israel to comply with his demands, too."
Netanyahu on Tuesday told hostages' families that "he is willing to agree to a prolonged cease-fire Gaza in exchange for their return," according toHaaretz. Later Tuesday, The Times of Israelreported that the prime minister was meeting with "Israel's hostage negotiation team and with members of Israel's security establishment," and expected negotiations to go through the night.
Even if a deal is reached regarding Gaza, some experts fear the bloodshed will continue there and in the West Bank
"There will possibly be an end to the Gaza war, but there will be now another war in the West Bank," Sami Al-Arian, a Palestinian analyst and director of the Center for Islam and Global Affairs at Istanbul Zaim University, told Scahill. "It may not be on the same scale, but it would be as vicious from the settlers, from the Netanyahu government."
Gazan writer and analyst Muhammad Shehada wrote for the U.S.-based Center for International Policy last week that a senior Arab official told him the U.S. president-elect asked the Qataris and Egyptians to finalize a deal before he takes office but the Israeli prime minister "is not budging while at the same time issuing false positive statements of a breakthrough and progress to buy time and pretend to seek a deal until Trump is in office, where Netanyahu can trade the Gaza war for something big in the West Bank."
Sharing on social media a video of the Tuesday strike on Jenin, Middle East expert Assal Rad said that "as a cease-fire in Gaza is near, Israel is expanding its assault on the West Bank. The Gaza genocide is only the most recent atrocity Israel—with the help of the U.S.—has carried out against Palestinians. The same story for 77+ years. It was always a war on Palestinian existence."
"Seriously? You wait until six days before leaving office to do what you promised to do during your 2020 campaign?" said one observer.
In a move likely to be reversed by the incoming Trump administration, President Joe Biden on Tuesday notified Congress of his intent to remove Cuba from the U.S. State Sponsors of Terrorism list, a designation that critics have long condemned as politically motivated and meritless.
Noting that "the government of Cuba has not provided any support for international terrorism" and has "provided assurances" that it will not do so in the future, the White House said in a memo that the Biden administration is moving to rescind the first Trump administration's January 2021 addition of Cuba to the State Sponsors of Terrorism (SSOT) list and take other measures to ease some sanctions on the long-suffering island of 11 million inhabitants.
Cuba's SSOT designation was based mostly on the socialist nation's harboring of leftist Colombian rebels and several U.S. fugitives from justice for alleged crimes committed decades ago, even though no other country has been placed on the SSOT list for such a reason and despite right-wing Cuban exile terrorists enjoying citizenship—and even heroic status—in the United States.
"Despite its limited nature, it is a decision in the right direction and in line with the sustained and firm demand of the government and people of Cuba, and with the broad, emphatic, and repeated call of many governments, especially Latin America and the Caribbean, of Cubans living abroad, political, religious and social organizations, and numerous political figures from the United States and other countries," the Cuban Ministry of Foreign Affairs said in a statement.
"It is important to note that the economic blockade and much of the dozen coercive measures that have been put into effect since 2017 remain in force to strengthen it, with full extraterritorial effect and in violation of international law and human rights of all Cubans," the ministry added.
For 32 straight years, the United Nations General Assembly has overwhelmingly voted for resolutions condemning the U.S. blockade of Cuba. And for 32 years, the United States, usually along with a small handful of countries, has opposed the measures. Last year's vote was 187-2, with Israel joining the U.S. in voting against the resolution.
Cuba followed Biden's move by announcing it would "gradually" release 553 political prisoners following negotiations with the Catholic Church, The New York Timesreported.
Many progressives welcomed Biden's shift. Congresswoman Nydia Velázquez (D-N.Y.) said in a statement that Cuba's SSOT designation "has only worsened life for the Cuban people without advancing U.S. interests" and "has made it harder for Cubans to access humanitarian aid, banking services, and the ability to travel abroad."
"It has also deepened food and medicine shortages and worsened the island's energy crisis, especially after Hurricane Rafael," she added. "These hardships have driven an unprecedented wave of migration, leading to the largest exodus in Cuba's history."
Rep. Ilhan Omar (D-Minn.) called Biden's move "a long overdue action that will help normalize relations with our neighbor."
"This is a step toward ending decades of failed policy that has only hurt Cuban families and strained diplomatic ties," Omar added. "Removing this designation will help the people of Cuba and create new opportunities for trade and cooperation between our nations. I look forward to continuing the work to build bridges between our countries and supporting policies that benefit both the American and Cuban people."
David Adler, the co-general coordinator at Progressive International, called the delisting "far too little, far too late."
"POTUS removing Cuba's SSOT designation in the final days of his presidency only means one thing: He knew—from day one—that the designation was simply an excuse to punish the Cuban people," Adler added. "But he maintained it anyway. Sickening."
The peace group CodePink released a statement welcoming Biden's shift, but adding that "it is unacceptable that it took this administration four years to address these injustices."
"President Biden made the inhumane decision every single day to not alleviate the suffering of millions of Cubans by keeping this designation in place," the group added. "As we mark this overdue progress, we can only hope that the Trump administration does not reverse these crucial steps towards justice and diplomacy."
Trump's nominee for secretary of state, Sen. Marco Rubio (R-Fla.) is the son of Cuban immigrants and a fierce critic of Cuba's socialist government. In 2021, Rubio introduced legislation aimed at blocking Cuba's removal from the SSOT list. Trump has also tapped Mauricio Claver-Carone—a staunch supporter of sanctioning Cuba—as his special envoy for Latin America.
Alex Main, director of international policy at the Center for Economic and Policy Research, said Tuesday that "while this decision, which comes years after 80 members of Congress urged Biden to reverse Trump's 'total pressure' approach should have been made long ago, it is better late than never."
"Sixty years of failed policy should be more than enough, and hopefully the new administration will have the wisdom and the courage to pursue a new course, one that's in the best interest of both the U.S. and the Cuban people," Main added.
Cuba was first placed on the SSOT list by the Reagan administration in 1982 amid an ongoing, decadeslong campaign of U.S.-backed exile terrorism, attempted subversion, failed assassination attempts, economic warfare, and covert operations large and small in a futile effort to overthrow the revolutionary government of longtime leader Fidel Castro. Cuba says U.S.-backed terrorism has killed or wounded more than 5,000 Cubans and cost its economy billions of dollars.
In stark contrast, Cuba has not committed any terrorism against the United States.
Former President Barack Obama removed Cuba from the SSOT in 2015 during a promising but ultimately short-lived rapprochement between the two countries that abruptly ended when Trump took office for the first time in 2017.
"Cuba will continue to confront and denounce this policy of economic war, the interference programs, and the disinformation and discredit operations financed each year with tens of millions of dollars from the United States federal budget," the Cuban Foreign Ministry said Tuesday. "It will also remain ready to develop a relationship of respect with that country, based on dialogue and noninterference in the internal affairs of both, despite differences."
Pharmacy benefit managers "are raking in billions in excess revenue—$7.3 billion over just five years—while squeezing independent pharmacies and leaving patients and health plan sponsors with skyrocketing costs."
The U.S. Federal Trade Commission on Tuesday published the second part of its investigation into how prescription drug middlemen are marking up the prices of specialty generic drugs dispensed at their affiliated pharmacies by hundreds—and in some cases, thousands—of percent, underscoring what advocates say is the need for urgent action by policymakers.
The FTC's second interim staff report on consolidated pharmacy benefit managers (PBMs) found that the three largest of these middlemen—CVS Health's Caremark Rx, Cigna Group's Express Scripts, and UnitedHealth Group's OptumRx—"marked up two specialty generic cancer drugs by thousands of percent and then paid their affiliated pharmacies hundreds of millions of dollars of dispensing revenue in excess of estimated acquisition costs for each drug annually."
"Of the specialty generic drugs analyzed in this report and dispensed by the 'Big Three' PBMs' affiliated pharmacies for commercial health plan members between 2020 and 2022, 63% were reimbursed at rates marked up by more than 100% over their estimated acquisition cost... while 22% were marked up by more than 1,000%," the report states.
"For the pulmonary hypertension drug tadalafil (generic Adcirca), for example, pharmacies purchased the drug at an average of $27 in 2022, yet the Big Three PBMs marked up the drug by $2,079 and paid their affiliated pharmacies $2,106, on average, for a 30-day supply of the medication on commercial claims," the publication notes. That's a staggering average markup of 7,736%.
"The FTC's second interim report lays bare the blatant profiteering by PBM giants."
"Such significant markups allowed the Big Three PBMs and their affiliated specialty pharmacies to generate more than $7.3 billion in revenue from dispensing drugs in excess of the drugs' estimated acquisition costs from 2017-22," the FTC said. "The Big Three PBMs netted such significant revenues all while patient, employer, and other healthcare plan sponsor payments for drugs steadily increased annually."
The new analysis follows a July 2024 report that revealed Big Three PBM-affiliated pharmacies received 68% of the dispensing revenue generated by specialty drugs in 2023, a 14% increase from 2016.
"The FTC staff's second interim report finds that the three major pharmacy benefit managers hiked costs for a wide range of lifesaving drugs, including medications to treat heart disease and cancer," FTC Chair Lina Khan said in a statement Tuesday. "The FTC should keep using its tools to investigate practices that may inflate drug costs, squeeze independent pharmacies, and deprive Americans of affordable, accessible healthcare—and should act swiftly to stop any illegal conduct."
Khan's time as chair is limited. Republican U.S. President-elect Donald Trump's inauguration is next week and he has named Andrew Ferguson as the next FTC chair. As Ferguson is already on the commission, his elevation to chair won't require Senate confirmation.
Greg Lopes, spokesperson for the Pharmaceutical Care Management Association, a PBM lobby group, said Tuesday that "it's clear this report again fails to consider the entirety of the prescription drug supply chain and makes sweeping assertions about the role of PBMs disconnected from a full appreciation of their critical cost-saving role for employers, unions, taxpayers, and patients."
Last September, the FTC sued the Big Three and their affiliated group purchasing organizations for allegedly "engaging in anticompetitive and unfair rebating practices that have artificially inflated the list price of insulin drugs, impaired patients' access to lower list price products, and shifted the cost of high insulin list prices to vulnerable patients."
FTC Office of Policy Planning Director Hannah Garden-Monheit said Tuesday that the problem of PBM price inflation "is growing at an alarming rate, which means there is an urgent need for policymakers to address it."
To that end, U.S. Sens. Maria Cantwell (D-Wash.) and Chuck Grassley (R-Iowa) introduced the Pharmacy Benefit Manager Transparency Act of 2023, a bill backed by the AARP aimed at increasing transparency and "holding PBMs accountable for deceptive and unfair practices that drive up prescription drug costs and force independent pharmacies out of business."
"This report is a call to action for policymakers to dismantle these exploitative schemes."
Responding to the FTC report, Emma Freer, senior policy analyst for healthcare at the American Economic Liberties Project—a corporate accountability and antitrust advocacy group—said in a statement Tuesday that "the FTC's second interim report lays bare the blatant profiteering by PBM giants, which are marking up lifesaving drugs like cancer, HIV, and multiple sclerosis treatments by thousands of percent and forcing patients to pay the price."
"By steering prescriptions for the most expensive specialty generic drugs to their own pharmacies, PBMs are raking in billions in excess revenue—$7.3 billion over just five years—while squeezing independent pharmacies and leaving patients and health plan sponsors with skyrocketing costs," Freer added. "This report is a call to action for policymakers to dismantle these exploitative schemes, outlaw the rebate system driving up prices, and restore fairness and affordability to the U.S. healthcare system."