The Federal Trade Commission (FTC) released its second interim report on pharmacy benefit managers (PBMs) on Tuesday, finding that large industry intermediaries have increased their numbers through vertical integration, industry dominance, and increased prices for specialty drugs. He said it has generated billions of dollars in revenue.
This report specifically focuses on the business practices of Caremark Rx, Express Scripts, and OptumRx, which are owned by CVS Health, Cigna, and UnitedHealth Group, respectively. These companies are considered the “Big 3” of the PBM industry and broadly dominate. 60 percent of the market.
“The FTC staff's second interim report finds that three major pharmacy benefit managers are raising the cost of a wide range of life-saving drugs, including drugs for heart disease and cancer,” FTC Chair Lina Khan said in a statement. It turned out that it was.”
Khan said at an FTC public committee meeting Tuesday to discuss the findings, the five-member panel unanimously voted in favor of issuing the report.
According to the report, the “big three” PBMs increased the prices of many specialty generic drugs by hundreds or even thousands of percent.
By significantly increasing the prices of these 51 drugs, PBM partner pharmacies were able to generate $7.3 billion in revenue from 2017 to 2022. The committee noted that these prices exceed the National Average Drug Access Cost (NADAC) for these drugs.
As stated in the report, there is no clear definition of what a specialty drug is. The Department of Health and Human Services Office of Inspector General previously classified the product as a specialty drug because it could be “expensive, difficult to handle, monitor, or administer, or treat rare, complex, or chronic conditions.” He said it could be considered.
The FTC found that 22 percent of specialty drugs dispensed by PBM-affiliated pharmacies had price increases of more than 1,000 percent, and 41 percent had price increases of between 100 and 1,000 percent. Of the drugs that increased by more than 1,000 percent, half increased by more than 2,000 percent.
In 2023, the top three PBMs dispensed the majority of specialty drugs in the U.S. at 68%, a double-digit increase from 2016, when they dispensed 54% of specialty drugs.
“During the study period from 2017 to part of 2022, specialty generic drugs became a growing profit center for the Big 3 PBMs and their affiliated pharmacies,” the report states.
“Given the combination of high reimbursement rates and large dispensing volumes, Big 3 PBM affiliated pharmacies achieved significant and growing levels of sales above estimated acquisition cost (NADAC) for the most highly valued specialty generic drugs during the study period. On the other hand, the big three PBMs generated revenue. “Additionally, the companies appear to have derived significant revenue from spread pricing on these drugs,” the report continues, while also offering plans for which sponsors and patients paid “substantially” more. Mentioned frame.
Antitrust attorney Austin Ownby spoke at Tuesday's public committee meeting on behalf of the Pharmaceutical Care Management Association (PCMA), the industry group that represents PBMs.
“The PCMA is gravely concerned that the second interim report on specialty medicines is likely to be nothing more than advocacy without substantive evidence,” Ownby said. “Specialty drugs are the most effective, and sometimes the only, treatment for diseases and conditions that historically have had few treatment options, such as multiple sclerosis, cystic fibrosis, cancer, and autoimmune diseases.” provide law.”
PBM practices have received intense bipartisan scrutiny in Congress. Sen. Elizabeth Warren (D-Mass.) and Josh Hawley (R-Missouri); Rep. Jake Auchincloss (D-Mass.) and Diana Hershberger (R-Tenn.) asked the FTC to issue a second preliminary report. Staff report. Lawmakers said they hope the report will inform future PBM legislation.
