Title: Middlemen Squeeze Billions from Specialty Generic Drug Prices, Per FTC Investigation
The top three pharmacy benefit managers (PBMs) in the U.S., including CVS Health's Caremark, Cigna's Express Scripts, and UnitedHealth Group's Optum Rx, have drawn scrutiny due to allegations of inflating drug prices at their affiliated pharmacies. According to investigations, medications used to treat various conditions such as heart disease, cancer, and HIV, among others, saw substantial price hikes.
The PBMs, who are supposed to lower drug costs for their clients, have often reimbursed their affiliated pharmacies at a higher rate than unaffiliated pharmacies for reviewed specialty generic drugs. This practice has raised concerns among plan sponsors and their members, as they're paying substantially more for critical medications.
The FTC launched an investigation into PBM practices in 2022, following a scathing interim report that detailed how the three largest players processed nearly 80% of the total prescriptions filled in the U.S. in 2023 and profited significantly.
In response to their latest findings, the PBMs contend that their practices help lower drug costs. However, critics argue that their tactics to inflate prices, like spread pricing, are misleading and exploitative, leading to increased costs for both plan sponsors and patients.
Ongoing efforts to overhaul the PBM industry and bring transparency to their opaque practices are likely to continue, with the new Trump administration taking steps to address these concerns. Overall, the FTC's investigation and legal action aim to create a more competitive and fair drug pricing environment to benefit consumers.
The scrutiny towards PBMs stems from the belief that they should be reducing business costs for their clients, not increasing them. Critics argue that the business strategy of reimbursing affiliated pharmacies at higher rates for certain drugs is contributing to the rising costs for plan sponsors and patients.
