FTC Report: PBMs of CVS, Cigna, UnitedHealth Marked Up Drug Prices Over 1,000%, Gaining $7.3 Billion

Jan 14, 2025, 06:00 PM

The U.S. Federal Trade Commission (FTC) released its second interim staff report accusing the nation's three largest pharmacy benefit managers (PBMs)—CVS Health’s Caremark, Cigna’s Express Scripts, and UnitedHealth’s OptumRx—of significantly marking up the prices of specialty generic drugs at their affiliated pharmacies. According to the report, these PBMs inflated prices of medications treating critical conditions such as cancer, HIV, heart disease, multiple sclerosis, and organ transplants, leading to overcharges for patients and employers. The FTC found that 63% of the 51 specialty generic drugs reviewed were reimbursed at rates more than 100% above their estimated acquisition cost, with 22% marked up by over 1,000%. Over a five-year period, the PBMs generated more than $7.3 billion in revenue through these markups. Testimony from a pharmacist highlighted that he was not allowed to stop dispensing expensive medications even when patients experienced side effects, while he could do so for cheaper drugs. The report also noted that approximately 12% of the total profits for these health giants in 2021 came from overcharging for pharmaceuticals. The FTC's findings spotlight the role of PBMs in driving up healthcare costs and call into question their impact on the U.S. healthcare system.