On February 8, 2023, the CVS Pharmacy in Brooklyn, New York City stood.
Spencer Pratt | Getty Images
National third Largest pharmacy benefit manager The Federal Trade Commission said Tuesday that the companies significantly increased the prices of certain drugs at their affiliated pharmacies, including those to treat heart disease, cancer and HIV.
From 2017 to 2022, these companies— UnitedHealth Groupof Autumn, CVS HealthCVS Caremark and CignaThe Federal Trade Commission (FTC) said in a second industry report that Express Scripts raised prices at its pharmacies by hundreds or thousands of percent, netting $7.3 billion in revenue above the purchase cost of the drugs.
“$7.3 billion is the difference between the amount they reimburse themselves and the estimated cost of purchasing the drug,” an FTC spokesman told reporters at a news conference, adding that the number “is likely an underestimate.”
Pharmacy Benefit Manageror PBM, acts as a middleman between pharmaceutical companies and consumers. They negotiate bulk discounts and fees with drug manufacturers on behalf of employers and health plans, create lists of drugs covered by insurance, and reimburse pharmacies for prescription drugs.
David Whitrap, vice president of external affairs at CVS Health, said the FTC is prioritizing testimony from drugmakers and pharmacies, industries that have benefited from the weakening of PBMs.
An Optum spokesman said the company lowered drug costs and helped patients save $1.3 billion in 2024.
A spokesman for Cigna Express Scripts called the report’s findings misleading and said the calculations are based on a small group of drugs that account for less than 2 percent of our health plans’ annual drug spending.
Dispensing patterns suggest the companies are shifting more profitable prescriptions, which sell for more than $1,000 per prescription, to pharmacies owned by their parent companies, the report said.
They also paid these pharmacies more than non-affiliated pharmacies for nearly all the drugs in the study, the report said.
The report found that patient out-of-pocket costs for these drugs will be $279 million in 2021, with a compound annual growth rate of 14%-21% since 2017.
During the study period, the companies earned an additional $1.4 billion from spread pricing—a practice in which billing plan sponsors earn more than they reimburse pharmacies for the drugs.
Federal Trade Commission Suing three PBMs In September, they were accused of steering diabetic patients into buying higher-priced insulin products in order to receive millions of dollars in kickbacks from drug companies.
The companies said the lawsuit was baseless and defended their practices. CVS, UnitedHealth and Cigna asked the FTC in October to disqualify Chairwoman Linda Khan from the insulin lawsuit over alleged bias in its pricing model.
“We are confident that our actions will be upheld in litigation, and we will not let PBM scare tactics distract from our responsibility to inform the public and policymakers,” an FTC spokesman said Tuesday.
Khan’s term as chairman officially expires in September. President-elect Donald Trump will take office on January 20 and has appointed current Commissioner Andrew Ferguson to replace Khan.
An FTC spokesman said Ferguson and other Republican commissioners are confident in supporting the FTC’s work on PBMs.
