FTC scrutinizes PBM markups
By HME News Staff
Updated 8:10 AM CST, Wed January 15, 2025
WASHINGTON – The Federal Trade Commission has published a report that found pharmacy benefit managers Caremark Rx LLC (CVS), Express Scripts and OptumRx marked up numerous specialty generic drugs by hundreds or thousands of percent.
The report, the second produced by the FTC, focused on PBMs influence over specialty generic drugs, including significant price markups by PBMs for cancer, HIV and a variety of other critical drugs.
“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,” said FTC Chair Lina M. Khan. “The FTC should keep using its tools to investigate practices that may inflate drug costs, squeeze independent pharmacies, and deprive Americans of affordable, accessible health care—and should act swiftly to stop any illegal conduct.”
The significant markups allowed the “Big 3 PBMs” and their affiliated specialty pharmacies to generate more than $7.3 billion in revenue from dispensing drugs in excess of the their estimated acquisition costs from 2017-22. The Big 3 PBMs netted such significant revenues all while patient, employer and other health care plan sponsor payments for drugs steadily increased annually, according to the staff report.
B. Douglas Hoey, CEO of the National Community Pharmacists Association, reacted:
“While the Big 3 have consolidated and vertically integrated over the years, they increasingly declare expensive medications to be ‘specialty’ to steer patients to a PBM-affiliated specialty pharmacy to the tune of $7.3 billion above the drug cost. They crush their competition by reimbursing their own pharmacies as much as 100% more than they reimburse independent pharmacies for the same drug, or more. This exploitative behavior is bad for taxpayers who subsidize Medicare prescription coverage but the FTC report found that commercial employers are getting hosed even worse. It’s no wonder employees are questioning why their employers are listening to insurance brokers who often recommend one of the giant PBMs.”
Related:
- The FTC released a previous interim report on PBMs in July.
- Read about Lehan Drugs’ decision to stop offering pharmacy services due to PBM practices.
Comments