Key Findings from the Investigation
The Federal Trade Commission’s latest interim staff report, released January 14, 2025, reveals shocking pricing practices among the nation’s leading pharmacy benefit managers (PBMs): Caremark Rx, Express Scripts, and OptumRx. The investigation uncovered extensive markups on specialty generic drugs, with some medications seeing price increases of over 7,700%.
Alarming Specialty Generic Drug Markups
Between 2020 and 2022, PBM-affiliated pharmacies marked up 63% of specialty generic drugs by more than 100% over their acquisition cost. Even more concerning, 22% of these medications experienced markups exceeding 1,000%. For instance, pulmonary hypertension medication tadalafil, acquired for just $27 per month’s supply, was being reimbursed at an astounding $2,106.
Massive Revenue Generation Exposed
The investigation revealed that PBM-affiliated pharmacies generated over $7.3 billion in excessive revenue from just 51 specialty generic drugs between 2017 and 2022. This revenue stream grew at a compound annual rate of 42% from 2017 to 2021, with oncology drugs accounting for 44% of the excess charges.
Impact on Healthcare Costs
Patient cost-sharing saw dramatic increases during the study period:
- Commercial claims experienced a 21% compound annual growth rate
- Medicare Part D claims increased by 14-15% annually
- PBM-affiliated pharmacies generated $1.4 billion in excess revenue from Medicare Part D alone
Prescription Steering Practices
The report identified concerning patterns in prescription handling:
- PBM-affiliated pharmacies handled 72% of prescriptions for drugs with markups exceeding $1,000
- This percentage dropped to 45% for medications with lower markups
- Commercial health plans showed more aggressive steering than Medicare Part D plans
Most Affected Therapeutic Areas
Critical medications saw the highest markups across several therapeutic categories:
- Oncology drugs like abiraterone and imatinib experienced markups over 1,000%
- Multiple sclerosis treatments, including dimethyl fumarate, saw markups exceeding 2,100%
- Pulmonary hypertension medication tadalafil topped the list with a 7,700% markup
Regulatory Implications and Future Outlook
The FTC’s findings have sparked urgent discussions about regulatory reform in the PBM industry. Without significant policy changes, experts warn that escalating drug prices will continue to burden patients and strain the healthcare system. The focus now turns to implementing stronger oversight and transparency measures to protect consumers from excessive pricing practices.
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