On January 14, 2024, the Federal Trade Commission (FTC) released its second report investigating the pharmacy benefit manager (PBM) industry. The report, which focuses on PBMs’ influence over specialty generic drugs, revealed that the top three PBMs—Express Scripts, CVS Caremark, and Optum Rx—generated over $7.3 billion in dispensing revenue from specialty generic drugs, far exceeding acquisition costs, between 2017 and 2022. Meanwhile patient, employer, and other health care plan sponsor payments for drugs annually increased. Additional key findings included:
- Significant Markups: The Big 3 PBMs imposed significant price markups on specialty generic drugs, sometimes by hundreds or thousands of percent, particularly for medications treating serious conditions like cancer and HIV. They also reimbursed their own affiliated pharmacies at higher rates than unaffiliated ones.
- Disparities in Dispensing Patterns: A significantly higher share of commercial prescriptions for specialty generic drugs with markups exceeding $1,000 per prescription were filled by the Big 3 PBMs’ affiliated pharmacies compared to unaffiliated ones, suggesting they may be steering the most profitable drugs to their own businesses.
- Spread Pricing: The PBMs earned an estimated $1.4 billion from spread pricing, charging plan sponsors more than they reimbursed pharmacies.
- Plan sponsor and patient drug spending: Plan sponsors and patients saw significant increases in drug spending, with a 21% annual growth rate for commercial claims and 14%-15% for Medicare Part D claims. In 2021 alone, plan sponsors paid $4.8 billion, and patients contributed $297 million in cost sharing.
Read the report here.
Last Updated on January 30, 2025 by Aimed Alliance
