A recent interim report by the Federal Trade Commission revealed that pharmacy benefit managers (PBMs) have generated $7.3 billion in revenue by inflating the prices of specialty generic drugs between 2017 and 2022. PBMs act as intermediaries between drug manufacturers, insurers, and pharmacies, and the three largest PBMs in the nation - CVS Health's Caremark, Cigna's Express Scripts, and UnitedHealth Group's Optum Rx - were found to have marked up drug prices significantly.
The FTC's investigation highlighted that PBMs reimbursed their affiliated pharmacies at higher rates than unaffiliated pharmacies for 51 specialty generic drugs, including medications for heart disease, cancer, and HIV. This practice resulted in patients, employers, insurers, and others paying inflated prices for essential medications.
While PBMs are tasked with reducing drug costs for their clients, the report emphasized that plan sponsors and members are paying substantial markups to the major PBMs and their affiliated pharmacies. The FTC's scrutiny of PBM practices began in 2022, and the agency has taken legal action against Caremark, Express Scripts, and Optum Rx for allegedly inflating insulin list prices.
In response to the report, the companies defended their practices, stating that they are lowering the cost of specialty medications and providing support for patients with complex conditions. However, the FTC's findings have raised concerns about the lack of transparency and the impact of PBMs on drug pricing.
Congress has also expressed interest in reforming the PBM industry to increase transparency and ensure that rebates are passed along to health plan sponsors. While legislative efforts to address PBM practices were not included in the recent federal spending bill, the issue is expected to remain a priority under the incoming administration.
President-elect Donald Trump has criticized PBMs for their role as middlemen in the drug supply chain, vowing to address the issue to reduce drug costs for Americans. The ongoing debate surrounding PBMs underscores the need for greater oversight and accountability in the pharmaceutical industry.
