The Federal Trade Commission (FTC) has released a pharmacy benefit managers report that presents crucial findings on the impact of the three major pharmacy benefit managers (PBMs): CVS Caremark, Express Scripts, and Optum Rx. These entities serve as intermediaries in the prescription drug market, and the report details how they significantly marked up the prices of specialty generic drugs. Medications for cancer, HIV, and heart disease experienced increases often reaching hundreds or even thousands of percent.
Financial Impact of PBMs on Drug Prices
Pharmacy benefit managers (PBMs) significantly affect the prices of lifesaving drugs, with their affiliated pharmacies earning over $7.3 billion in dispensing revenue, surpassing the acquisition costs for specialty generics between 2017 and 2022.
Spread Pricing Generates Profits
The Big Three PBMs earned about $1.4 billion from spread pricing on specialty generic drugs. Spread pricing involves PBMs charging clients more than what they pay pharmacies for the drugs.
PBM Practices Under Scrutiny
FTC Chair Lina M. Khan criticized PBM practices for inflating drug costs, harming independent pharmacies, and limiting access to affordable healthcare. She called for further investigation and action against illegal practices.
PBMs Criticize the FTC Pharmacy Benefit Managers Report
The Big Three PBMs, particularly CVS Health, challenged the FTC’s conclusions, arguing the report focused on a small subset of specialty generics and ignored branded products, which make up a larger share of spending.
Need for Transparency and Regulation
The pharmacy benefit managers report stresses the financial importance of specialty generic drugs to PBMs and calls for increased transparency and regulation to ensure fair pricing in the industry.
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