FTC finds top 3 PBMs inflated drug prices by $7.3B

The Federal Trade Commission released a second interim report showing that the three largest pharmacy benefit managers — CVS Caremark, Cigna's Express Scripts and UnitedHealth's Optum Rx — marked up specialty generic drug prices, generating over $7.3 billion in excessive revenues from 2017 to 2022. 

The report focuses on price increases for critical medications, including those used to treat HIV, cancer and other critical conditions. The three PBMs inflated the drug prices dispensed at their affiliated pharmacies by hundreds and thousands of percent, passing costs onto patients, employers and health plans, according to a Jan. 14 news release from the agency. 

The FTC's findings also indicate that these PBMs engaged in spread pricing, earning an estimated $1.4 billion of income by charging their plan sponsor clients more than they reimburse pharmacies for the drugs. 

The inflated prices have contributed to rising drug costs, with plan sponsor payments rising by a compound annual growth rate of 21% for commercial claims between 2017 and 2021. 

According to the FTC's initial report from July 2024, the three largest PBMs handle 79% of U.S. prescriptions and have increased their control through further vertical integration with health insurers. This integration allows them to steer more prescriptions to their own affiliated pharmacies, driving up costs for independent pharmacies. 

A CVS Caremark spokesperson stated in an email to Becker's, "It is inappropriate and misleading to draw broad conclusions from cherry-picked 'specialty generic' outliers, as the FTC has done in both of its interim reports. Between 2017-2022, specialty generic products have represented less than 1.5% of our clients' total drug spend. In contrast, branded specialty products represent more than 50% of our clients' total drug spend and are entirely ignored by the FTC. Instead of focusing on the impact to consumers and organizations that pay for prescription drugs, the FTC has prioritized comments from the conflicted pharmaceutical and pharmacy industries that would benefit from a weakened PBM guardrail."  

Becker's reached out to Express Scripts and Optum Rx for comment. 

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