Largest PBMs hiked up drug prices, FTC says

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.