FTC Targets Pharmacy Benefit Managers Over Exorbitant Price Hikes on Specialty Generic Drugs
FTC Investigation:
The Federal Trade Commission (FTC) has released a second interim report accusing pharmacy benefit managers (PBMs) of significantly inflating prices on specialty generic drugs, often by hundreds or thousands of percent13.
Revenue and Costs:
PBMs reaped $7.3 billion in additional revenue from 2017 to 2022 by marking up these drugs, leading to a 21% increase in costs for commercial plans and a 14-15% increase for Medicare Part D plans13.
Market Dominance:
The three largest PBMs - CVS Caremark, OptumRx, and Express Scripts - control nearly 80% of insured patients' access to drugs and have been accused of steering highly profitable prescriptions to their affiliated pharmacies13.
Reimbursement Disparities:
PBMs consistently reimbursed their affiliated pharmacies at higher rates than competitor pharmacies, particularly in cases involving commercial insurance13.
Industry Response:
The companies have disputed the FTC's findings, arguing that their practices reduce drug costs and that the report is misleading3.
FTC Concerns:
The FTC emphasizes the urgent need for policymakers to address these practices, which are seen as contributing to rising healthcare costs and harming patients13.
Sources:
1. https://www.bizjournals.com/stlouis/news/2025/01/15/regulator-accuses-drug-middlemen-price-hikes.html
3. https://ktvz.com/money/cnn-business-consumer/2025/01/14/ftc-finds-middlemen-inflate-specialty-generic-drug-prices-by-billions-of-dollars/