The U.S. Federal Trade Commission (FTC) has slammed pharmacy benefit managers (PBMs) owned by UnitedHealth (UNH), CVS Health (CVS) and Cigna (CI) for inflating the price of cancer, HIV, and other critical illness drugs.
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The Big 3 PBMs – UnitedHealth Group’s Optum, CVS Health’s CVS Caremark and Cigna’s Express Scripts – marked up numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent, the FTC said in a report.
UNH, CVS and CI PBMs Charge “Enormous Markups”
Such significant markups allowed the companies to generate more than $7.3 billion in revenue from dispensing drugs in excess of the drugs’ estimated acquisition costs from 2017-2022.
FTC Chair Lina Khan said that the three major PBMs hiked costs for a wide range of lifesaving drugs, including medications to treat heart disease and cancer. She added that the agency would keep using its tools to investigate practices that may inflate drug costs.
“FTC staff have found that the Big 3 PBMs are charging enormous markups on dozens of lifesaving drugs,” said Hannah Garden-Monheit, Director of the FTC’s Office of Policy Planning. “We also found that this problem is growing at an alarming rate, which means there is an urgent need for policymakers to address it.”
The report builds on one from July 2024, which found pharmacies affiliated with the three largest PBMs received 68% of the dispensing revenue generated by specialty drugs in 2023, up from 54% in 2016.
Higher markups on drugs also drives up insurance costs, which further benefits the companies that own the PBMs.
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