New FTC Report on PBMs Shows Wild Profiteering and Self-Dealing, Underscores Urgency of PBM Reform

The National Community Pharmacists Association issued a statement from CEO B. Douglas Hoey, pharmacist, MBA, after the Federal Trade Commission today published a second interim staff report on the prescription drug middleman industry. This report focuses on pharmacy benefit managers’ influence over specialty generic drugs. It finds, among other things, that the Big 3 PBMs – Caremark Rx, Express Scripts, and OptumRx, all owned or affiliated with big insurance companies – controlled 44 percent of the commercial specialty generic 30-day market and 72 percent of those drugs were marked up more than $1,000 per prescription. These dispensing patterns suggest that the big health insurers and the PBMs they own may be steering highly profitable prescriptions to their own affiliated pharmacies and away from unaffiliated pharmacies. The report looks at a range of critical drugs for chronic illnesses, including treatments for cancer and HIV.

Hoey said, “While the Big 3 have consolidated and vertically integrated over the years, they increasingly declare expensive medications to be ‘specialty’ to steer patients to a PBM-affiliated specialty pharmacy to the tune of $7.3 billion above the drug cost. They crush their competition by reimbursing their own pharmacies as much as 100 percent more than they reimburse independent pharmacies for the same drug, or more. This exploitative behavior is bad for taxpayers who subsidize Medicare prescription coverage but the FTC report found that commercial employers are getting hosed even worse. It’s no wonder employees are questioning why their employers are listening to insurance brokers who often recommend one of the giant PBMs.

“Patients would be well served if these so-called specialty drugs were able to be dispensed by their preferred community pharmacy. Instead, however, for the PBMs’ financial gain, patients’ choice is oftentimes limited to PBM-owned mail-order pharmacies and their care is unfortunately disrupted. This is just the latest obvious signal to policymakers that they must pass PBM reform that would include paying for prescriptions based on the cost of the drug plus a transparent pharmacist professional dispensing fee. PBM reform legislation would save taxpayers $5 billion. Legislation that would do just those things was nearly passed last month. Congressional leaders should see this second interim report as an imperative to action.”

This second interim staff report on PBMs builds on the FTC’s first report, which was released July 9, 2024. During its ongoing inquiry into PBMs launched in 2022, the FTC received more than 24,000 comments from the public – including independent pharmacists – about anticompetitive contracts and how PBM practices affect consumers.