New FTC Report Reveals PBMs Put Profits Ahead of Consumers 

By Consumers For Quality Care, on July 31, 2024

A new interim report released by the Federal Trade Commission (FTC) shows how pharmacy benefit managers (PBMs) profit by using their market power to increase the cost of vital medications for consumers, according to The Wall Street Journal. 

PBMs serve as middlemen setting prices between prescription drug manufacturers, health plans, and pharmacies. PBMs claim to save consumers money, but in reality, they have been found to charge artificially high markups for drugs, boosting their own profits. These monopolistic practices increase health care costs for everyone, including those who don’t even take medications. 

As part of their two-year probe into the industry, the FTC analyzed documents from six PBMs, including three that control 80 percent of the prescription drug market – UnitedHealth Group’s OptumRx, Cigna’s Express Scripts, and CVS Health’s Caremark. One of the central conclusions of the report is that PBMs exclude certain less expensive generic medications from their lists, or formularies, in favor of more expensive medications. It was also found that PBMs directed patients to use their own specialty pharmacies to fill prescriptions, driving business away from independent pharmacies.  

PBMs make it harder for consumers to get the life-saving medications they need. The study found that PBM parent companies reported $1.6 billion in profit from two cancer drugs over a three-year period. “Dominant pharmacy-benefit managers can hike the cost of drugs—including overcharging patients for cancer drugs,” said FTC Chair Lina Khan. 

CQC urges lawmakers and regulators to scrutinize harmful PBM practices that increase what consumers pay for prescription drugs.