Through specialty generic drug markups, three major pharmacy benefit managers (PBMs) earned a collective $7.3 billion above estimated acquisition costs over a five-year period, according to an interim report released by the Federal Trade Commission (FTC). Additionally, the PBMs earned $1.4 billion through spread pricing – the difference between what a PBM charges a health plan for drugs and what the pharmacy actually pays for them.
The FTC found that from 2017 to 2022, the PBMs marked up the prices of 51 specialty generic drugs anywhere from 100% to 1000%, or even more. For example:
- PBMs paid affiliated pharmacies nearly $4,000 on average for a 30-day supply of the multiple sclerosis drug dimenthyl fumarate, which has an acquisition cost of $177.
- The price of the pulmonary hypertension drug Tadalafil was inflated by over 7,700% in 2022.
“The FTC staff’s second interim report finds that the three major pharmacy benefit managers hiked costs for a wide range of lifesaving drugs, including medications to treat heart disease and cancer,” said FTC Chair Lina M. Khan in a statement. All three PBMs – which together administer about 80% of U.S. prescriptions – are vertically integrated with major insurers.
A spokesperson for one of the PBMs criticized the report for its focus on specialty generics, which they say represents just a small percentage of total drug spend. Another countered that they have taken steps to lower specialty drug costs and provide support for patients with complex conditions.
Perhaps not coincidentally, two days after the report was released one of the PBMs in question announced that they will begin passing 100% of rebates onto their clients. It’s a great idea… which is why MedBen Rx has already been doing the same thing for years.