FTC Report: CVS, Cigna, UnitedHealth Generated $7.3 Billion in Excess Revenue by Marking Up Specialty Drug Prices from 2017-2022

Jan 14, 2025, 10:24 PM

The Federal Trade Commission (FTC) has released a second interim report criticizing the practices of the three largest pharmacy benefit managers (PBMs) in the U.S.: CVS Health's Caremark Rx, Cigna's Express Scripts, and UnitedHealth Group's OptumRx. The report alleges that these PBMs have significantly marked up the prices of specialty generic drugs, generating over $7.3 billion in excess revenue between 2017 and 2022. The markups, which reached hundreds to thousands of percent, affected drugs used to treat conditions such as cancer, HIV, and heart disease. The FTC analyzed 51 specialty generic drugs, covering 882 National Drug Codes, and found that these PBMs reimbursed their affiliated pharmacies at higher rates than unaffiliated ones for nearly all the drugs examined. This practice has contributed to rising drug costs for patients, employers, and other health plan sponsors, with patient out-of-pocket costs reaching $279 million by 2021, reflecting a 14-21% annual growth rate since 2017. The report also suggests that the PBMs may be steering highly profitable prescriptions to their own pharmacies, potentially squeezing independent pharmacies out of the market. Additionally, the PBMs generated an estimated $1.4 billion in income from spread pricing during the study period.