According to a report from the Federal Trade Commission released on Tuesday, the three biggest pharmacy benefit managers (PBMs) – CVS Health’s Caremark Rx, Cigna’s Express Scripts, and UnitedHealth Group’s OptumRx – have artificially raised the prices of essential medications by billions of dollars over the past few years. Specifically, the report states that these companies have generated around $7.3 billion through price increases on generic drugs used to treat conditions such as heart disease, HIV, and cancer. Some of these price hikes have exceeded 1,000% of the national average cost for acquiring these medications.
The FTC has expressed concerns about the Big Three PBMs, estimating that they control 80% of all prescriptions in the U.S. and are inflating drug prices at an alarming rate. The commission emphasizes the urgent need for policymakers to address this issue. These findings come after a previous FTC report criticized the dominance and pricing practices of these major health care companies.
The report highlights significant markups on specialty drugs, with cancer medications alone contributing nearly half of the $7.3 billion revenue. The top 10 specialty generics represented a significant portion of the companies’ pharmacy-related income in 2021. The report also notes a surge in price-markup revenue from 2017 to 2021.
In response to the report, CVS Health stated its commitment to making healthcare more affordable and criticized drawing broad conclusions from isolated cases. OptumRx claimed to have saved patients $1.3 billion last year, while Express Scripts disputed the FTC’s conclusions in the report.
The report, one of the last under the Biden administration, sheds light on PBM drug markups and suggests that these companies may be directing prescriptions to their own affiliated pharmacies. Research and advocacy groups have long argued that drug middlemen play a significant role in the high prices Americans pay for medications.
A recent report has raised concerns about the potential exploitation of patients through inflated drug costs and the financial pressure on independent pharmacies. The report highlighted markups of more than 1,000% on two specialty cancer drugs, resulting in substantial profits for the pharmacies involved.
In response to this report, Express Scripts took legal action against the commission that released the findings, alleging that the claims made were unsubstantiated, false, and biased against the industry. Shortly thereafter, the Federal Trade Commission (FTC) filed a lawsuit against Express Scripts and two other leading pharmacy benefit managers (PBMs) for engaging in anticompetitive practices that artificially drove up prices for insulin. The companies in question have refuted these allegations.
The FTC recently filed a motion to dismiss the case brought by Express Scripts, although a final decision from the judge is pending. Meanwhile, the FTC’s own case against the PBMs is ongoing, suggesting a complex legal battle ahead.
The developments outlined in the report and subsequent legal actions underscore the challenges and controversies surrounding the pharmaceutical industry’s pricing practices and the impact on both patients and pharmacies. The intricacies of these cases highlight the need for stringent oversight and regulation to ensure fair and transparent pricing in the healthcare sector.
