FTC Report Accuses PBMs of Inflating Drug Costs by Billions

The Big Three PBMs Inflated Drug Prices by Billions, FTC Report Finds

The Federal Trade Commission (FTC) released a report on Tuesday accusing the three largest pharmacy benefit managers (PBMs) – CVS Health’s Caremark Rx, Cigna’s Express Scripts, and UnitedHealth Group’s OptumRx – of inflating the costs of numerous life-saving medications by billions of dollars over the past few years.

The report found that these PBMs, which control 80% of all prescriptions in the U.S., generated roughly $7.3 billion through price hikes over about five years starting in 2017. The “excess” price hikes affected generic drugs used to treat heart disease, HIV, and cancer, among other conditions, with some increases exceeding 1,000% of the national average costs.

The FTC also expressed concern about the steep markups on specialty drugs, which have become increasingly profitable for the PBMs. Cancer drugs alone made up nearly half of the $7.3 billion in price hikes, with multiple sclerosis medications accounting for another 25%.

The report suggests that the PBMs may be steering prescriptions to their own affiliated pharmacies, further increasing their profits at the expense of patients and independent pharmacies.

This report is the latest development in the FTC’s ongoing investigation into PBMs. In July, the commission released a report finding that the largest PBMs “profit at the expense of patients by inflating drug costs and squeezing Main Street pharmacies.” The FTC has also filed lawsuits against Express Scripts and the other two top PBMs, alleging anticompetitive practices that artificially inflated insulin prices.

The PBMs have disputed the FTC’s findings and accused the agency of making unsubstantiated claims. The legal battle between the FTC and the PBMs is ongoing.