The Federal Trade Commission this week announced it added massive drug-purchasers to an investigation into the practices of powerful drug middlemen.

Critics have described those businesses, created since 2019, as another layer of opacity in the already obscure world of drug pricing.

The FTC — the federal agency tasked with policing monopolistic practices — was already investigating one tier of drug middlemen when it made Wednesday’s announcement. It said the agency had sent “compulsory orders” for information to a second tier of middlemen created and run by two of the three biggest first-tier middlemen.

Known as “pharmacy benefit managers,” the primary drug middlemen have long been accused of playing a major role in the increasing cost of prescription drugs, which have been one of the fastest-rising health expenses.

PBMs contract with insurers to handle prescription benefits. Since they determine which drugs are covered, they can — and do —  leverage huge rebates from drugmakers to put their products on those lists.

Because the businesses aren’t transparent about how they handle those rebates, the PBMs are suspected of pocketing a substantial portion of them instead of passing them along to consumers. There are also concerns about the market dominance of the three biggest — CVS Caremark, ExpressScripts and OptumRx — which combined are estimated to handle more than 80% of the prescription claims in the United States.

Also, each has combined with a top-10 health insurer since 2014 into massive corporations that themselves sell drugs and some of which are buying up doctors’ offices. Under the same corporate roof, those businesses could be cutting special deals to one another, and one might wonder if controlling costs would be their first priority.

Amid investigations into the PBM industry and growing calls for a government crackdown, the FTC last June voted unanimously to mount a formal “Section 6(b)” investigation into six PBMs, including the big three.

On Wednesday, it said it was adding Zinc Health Services and Ascent Health Services to the probe into PBMs’ “impact on the accessibility and affordability of prescription drugs.”

In 2021, the Ohio Capital Journal reported on the rise of the companies. ExpressScripts launched Switzerland-based Ascent in 2019. CVS launched Zinc domestically in 2020. And it hasn’t been added to the FTC probe, but OptumRx launched Ireland-based Emisar Pharmacy Solutions in 2021.

Going by names like “purchasing organizations,” “rebate aggregators” and “contracting entities,” the new businesses are taking over the business of  negotiating manufacturer rebates on behalf of the big-three PBMs and smaller ones that sign up with them.

An industry group said the combination would create even more savings for customers. But skeptics said feared would create another layer of smoke — especially operating in foreign countries like Switzerland, which has some of the strictest bank-secrecy laws in the world.

“From our perspective, we definitely have questions about adding an entity into the mix in the supply chain. Is that going to make it that much harder for us to track where these rebates are actually going?” James Gelfand, senior vice president of the ERISA Industry Committee, asked in a 2021 interview with the Capital Journal. The group has 120 member companies, which purchase insurance for 10 million people.

In announcing a state antitrust suit filed in March against ExpressScripts, Ascent and other companies, Ohio Attorney General Dave Yost had more pointed words about the rise of the middlemen’s middlemen.

“Ascent was, (its PBM owners) realized, the perfect vehicle to harmonize and fix drug prices, rebates and fees and retail pharmacy reimbursements,” the suit said.

This story was originally published by the Ohio Capital Journal, a States Newsroom affiliate.