Regulators published their most detailed findings yet on how some of the nation\u2019s largest companies profited from “excess” prescription price hikes of 1,000% or more.<\/p>\n\n\n\n
The three largest drug middlemen inflated the costs of numerous life-saving medications by billions of dollars over the past few years, the Federal Trade Commission said in a report Tuesday<\/a>.<\/p>\n\n\n\n The top pharmacy benefit managers (PBMs) \u2014 CVS Health\u2019s Caremark Rx, Cigna\u2019s Express Scripts and UnitedHealth Group\u2019s OptumRx \u2014 generated roughly $7.3 billion through price hikes over about five years starting in 2017, the FTC said.<\/p>\n\n\n\n The \u201cexcess\u201d price hikes affected generic drugs used to treat heart disease, HIV and cancer, among other conditions, with some increases more than 1,000% of the national average costs of acquiring the medications, the commission said.<\/p>\n\n\n\n The FTC also said these so-called Big Three health care companies \u2014 which it estimates administer 80% of all prescriptions<\/a> in the U.S. \u2014 are inflating drug prices \u201cat an alarming rate, which means there is an urgent need for policymakers to address it.\u201d<\/p>\n\n\n\n The commission has been raising antitrust concerns<\/a> about these companies\u2019 market dominance and pricing practices for years, particularly in light of major insurers\u2019 ownership of large pharmacy middlemen.<\/p>\n\n\n\n Tuesday\u2019s findings come on the heels of a\u2002PBM report<\/a> the FTC released last year, which slammed the Big Three and their next-biggest rivals as \u201cenormous healthcare conglomerates that can exercise vast control over huge swaths of the healthcare sector.\u201d<\/p>\n\n\n\n Some of the steepest drug markups were \u201chundreds and thousands of percent,\u201d according to Tuesday\u2019s report, which highlights just how profitable specialty drugs have become for the three leading PBMs. Cancer drugs alone made up nearly half of the $7.3 billion, the commission wrote, with multiple sclerosis medications accounting for another 25%.<\/p>\n\n\n\n Dispensing highly marked-up specialty drugs was a massive income stream for the companies in 2021, the FTC found. Out of tens of thousands of drugs dispensed, the top 10 specialty generics alone made up nearly 11% of the companies\u2019 pharmacy-related operating income that year, the agency estimated. Across the 51 drugs the agency analyzed, the Big Three\u2019s price-markup revenue surged from $522 million in 2017 to $2.1 billion in 2021, the report said.<\/p>\n\n\n\n CVS Health said in a statement that it \u201cis inappropriate and misleading to draw broad conclusions from cherry-picked \u2018specialty generic\u2019 outliers\u201d and that the company\u2019s \u201ctop priority is to make health care more affordable.\u201d<\/p>\n\n\n\n OptumRx said that it helped eligible patients save $1.3 billion last year and estimated that the median out-of-pocket payment for these patients was $5. Express Scripts said the FTC\u2019s report contained \u201cmisleading conclusions.\u201d<\/p>\n\n\n\n The report marks one of the commission\u2019s final moves under the Biden administration. President-elect Donald Trump has tapped Andrew Ferguson<\/a>, one of the agency\u2019s five commissioners, to succeed Chair Lina Khan, a move widely expected to bring far more pro-business policies. However, the first Trump administration did make several efforts<\/a> to lower prescription drug costs.<\/p>\n\n\n\n Tuesday\u2019s report, which contains the most detailed government findings to date on PBM drug markups, suggests that the large PBMs \u201cmay be steering these prescriptions to their own affiliated pharmacies.\u201d Researchers and advocates have been publishing reports<\/a> for years on specialty drug markups, arguing that drug middlemen are a key culprit in the steep prices Americans pay for medicines.<\/p>\n\n\n\n The commission\u2019s first report in its investigation into PBMs<\/a>, released in July, found that the largest of them \u201cprofit at the expense of patients by inflating drug costs and squeezing Main Street pharmacies.\u201d That report flagged markups of two specialty cancer drugs exceeding 1,000%, moves that generated their affiliated pharmacies hundreds of millions of dollars.<\/p>\n\n\n\n Express Scripts sued the commission two months after the first report, arguing that regulators had made unsubstantiated, false and biased claims about the industry. Three days later, the FTC sued Express Scripts and the other two top PBMs, alleging anticompetitive practices that artificially inflated insulin prices<\/a>. All three companies have disputed those accusations.<\/p>\n\n\n\n The FTC filed a motion to dismiss the Express Scripts case last month, though the judge has yet to rule on it. The agency\u2019s own case against the PBMs is ongoing.<\/p>\n\n\n\n