FTC finds major pharmacy benefit managers inflated drug prices for $7.3 billion gain

The nation’s three largest pharmacy benefit managers have significantly marked up the prices of certain medicines, including for heart disease, cancer and HIV, at their affiliated pharmacies, the U.S. Federal Trade Commission said on Tuesday.

From 2017 to 2022, the companies — UnitedHealth Group‘s Optum, CVS Health‘s CVS Caremark and Cigna‘s Express Scripts — marked up prices at their affiliated pharmacies by hundreds or thousands of percent, netting them $7.3 billion in revenue in excess of the acquisition costs of the drugs, the FTC said in its second report on the industry.

Pharmacy benefit managers, or PBMs, act as middlemen between drug companies and consumers. They negotiate volume discounts and fees with drug manufacturers on behalf of employers and health plans, create lists of medications that are covered by insurance, and reimburse pharmacies for prescriptions.

The FTC sued the three PBMs in September, accusing them of steering diabetes patients toward higher priced insulin products in order to reap millions of dollars in rebates from drugmakers. The companies say the suit is baseless and defend their practices.