The US Federal Trade Commission (FTC) last week (January 14) published a report that found three of the US’s largest PBMs “marked up” prices for “critical drugs” including cancer and HIV medications.
The “Big Three PBMs” – CVS, Express Scripts (ESI) and Optum Rx – along with their affiliated pharmacies generated more than $7.3 billion in revenue from dispensing drugs at “significant price markups” between 2017 and 2022, the FTC report said.
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The companies “hiked costs” for “numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent and many others by hundreds of percent”, it found.
“The Big Three PBMs netted such significant revenues all while patient, employer and other healthcare plan sponsor payments for drugs steadily increased annually,” the report added.
But CVS stressed that its “top priority is to make healthcare more affordable and accessible”.
Squeezing indie pharmacies
The companies also “reimbursed their affiliated pharmacies at a higher rate than they paid unaffiliated pharmacies on nearly every specialty generic drug examined”, it found.
And the report added that “dispensing patterns suggest that the Big Three PBMs may be steering highly profitable prescriptions to their own affiliate pharmacies and away from unaffiliated pharmacies”.
“A larger disproportionate share of commercial prescriptions for specialty generic drugs marked up more than $1,000 per prescription were dispensed by the Big Three PBMs’ affiliated pharmacies compared with unaffiliated pharmacies,” it said.
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Director of the FTC’s office of policy planning Hannah Garden-Monheit said that “FTC staff have found that the Big Three PBMs are charging enormous markups on dozens of lifesaving drugs”.
“We also found that this problem is growing at an alarming rate, which means there is an urgent need for policymakers to address it,” she added.
And FTC chair Lina Khan urged the FTC to “keep using its tools to investigate practices that may inflate drug costs, squeeze independent pharmacies and deprive Americans of affordable, accessible healthcare”, adding that it “should act swiftly to stop any illegal conduct”.
“Cherry-picked outliers”
Vice president of external affairs at CVS Health David Whitrap yesterday (January 20) told C+D that “it is inappropriate and misleading to draw broad conclusions from cherry-picked ‘specialty generic’ outliers, as the FTC did in its interim report”.
“These drugs represent less than 1.5% of our clients’ total drug spend [and] the FTC chose not to analyse branded specialty pharmaceuticals, which represent more than 50% of our clients’ total drug spend and reflect areas where we have fought pharma price gouging,” he said.
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“Our top priority is to make healthcare more affordable and accessible by working to lower the costs of prescriptions for the patients we serve, as well as the employers and unions that hire us,” he added.
C+D also approached Express Scripts and Optum Rx for comment.
