The markups helped the PBMs reap $7.3 billion from 2017 to 2022.
The largest pharmacy-benefit managers hiked the prices of dozens of drugs dispensed through their own pharmacies, according to a new report by the Federal Trade Commission released on Tuesday.
The markups helped the PBMs reap $7.3 billion from 2017 to 2022, the FTC found. The PBMs—owned by insurers Cigna, CVS Health and UnitedHealth Group—are supposed to help keep drug costs low for employers and other clients.
The last-minute report in the final full week of the Biden administration follows an earlier agency report that detailed tactics the drug managers use to boost their profits, with the agency saying the practices raised costs for employers and patients. PBMs disputed those findings.
President-elect Donald Trump has declared his intention to target drug middlemen practices, though he hasn't offered detailed policy proposals. He nominated a replacement for Lina Khan, head of the Biden FTC, who has made healthcare competition a priority.
Drug benefit managers have been under fire from both Republicans and Democrats for years, with both sides of the aisle proposing legislation targeting the companies. Restrictions on their pricing practices came close to passing Congress last month but were taken out of a spending package at the last minute. PBMs have said they don't deserve the scrutiny because they work to bring prices down overall for their clients, insurers and employers.
Over the report's study period, PBMs paid their pharmacies markups of thousands of percent in some cases, and by hundreds of percent in many other cases. For example, the PBMs marked up the price of dimethyl fumarate, a multiple sclerosis treatment known by the brand name Tecfidera, by more than 2,000% in commercial health plans and by more than 1,500% in Medicare plans when disbursed through their own pharmacies.
Insurers who administer private Medicare plans could see a more than $21 billion pay increase in 2026 under a plan proposed by the Biden administration. The adjustment would be a boon for UnitedHealth Group, the country's largest Medicare Advantage insurer. Other major MA players like Humana and CVS Health would also benefit. The Trump administration will have discretion over how the final policy looks, and analysts expect the ultimate pay increase to be even higher. The Biden administration proposed raising plans' base payment by about 2% next year. But the insurers in reality would get an average 4.3% increase in overall revenue once rates are adjusted for how sick their enrollees appear, CMS says.
The Supreme Court will hear a broad challenge to the Affordable Care Act's coverage of preventive services in its upcoming term, the latest in more than a decade of battles over the health reform law. A ruling for the conservative Texas employers who filed the case would erode the coverage of tens of millions of people who get their health insurance from their employer or through Obamacare's marketplace, removing requirements that insurers cover the full cost of everything from birth control to vaccines to mental health screenings.
A doctor has shared a shocking story of how UnitedHealthcare stopped a cancer surgery to ask if it was medically necessary in a new Instagram video. Elisabeth Potter, a doctor based in Austin, Texas, created a video on Instagram detailing her experience treating a cancer patient and what she said were the roadblocks UnitedHealthcare put up during a surgery procedure. UnitedHealthcare told Newsweek: 'There are no insurance related circumstances that would require a physician to step out of surgery and it would create potential safety risks if they were to do so.'
Seven UnitedHealth Group shareholders are calling on the health care conglomerate to produce a report on how often its policies lead to denied or delayed care, and the effects on patients and the economy. The proposal, which could go up for a vote by UnitedHealth's investors at the company's annual meeting later this year, comes as the company is under tremendous public scrutiny for tactics such as prior authorization and care denials. The killing of the CEO of UnitedHealth's health insurance business in early December ignited a firestorm of anger — not against the alleged killer, but against health insurers like UnitedHealth who many blame for the industry's dysfunction.
Increasing public sympathy for Luigi Mangione, the man accused of fatally shooting UnitedHealthcare CEO Brian Thompson, could pose the possibility of jury nullification despite the overwhelming evidence mounted against him, some legal experts say. Mangione faces multiple counts of murder, including murder as an act of terrorism under federal and state charges in New York and Pennsylvania, after allegedly gunning down Thompson as he was walking to an investor conference in Midtown Manhattan on Dec 4.