FTC Hits Middlemen For Inflating Specialty Generic Drug Prices

Pharmacy benefit managers (PBMs), acting as middlemen between drugmakers, insurers, and pharmacies, earned $7.3 billion in revenue by inflating the prices of dozens of specialty generic drugs from 2017 to 2022, according to an interim report by the Federal Trade Commission (FTC). Tami Luhby reported the findings for CNN.

CVS Health’s Caremark, Cigna’s Express Scripts, and UnitedHealth Group’s Optum Rx—were found to have inflated drug prices at their affiliated pharmacies by hundreds or even thousands of percent. I Photo: Cigna Group

The report comes amid rising drug costs for patients, employers, and insurers. The nation’s three largest PBMs—CVS Health’s Caremark, Cigna’s Express Scripts, and UnitedHealth Group’s Optum Rx—were found to have inflated drug prices at their affiliated pharmacies by hundreds or even thousands of percent.

These drugs include treatments for heart disease, cancer, and HIV.

The PBMs, tasked with lowering drug costs for clients, reimbursed their affiliated pharmacies at higher rates than unaffiliated pharmacies for nearly all 51 specialty generic drugs reviewed.

“Plan sponsors in particular should be aware that they and their members are paying the Big 3 PBMs and their affiliated pharmacies very significant markups over the acquisition costs for critical medications,” the report stated.

The FTC began investigating PBM practices in 2022.