The U.S. Federal Trade Commission on Tuesday published the second part of its investigation into how prescription drug middlemen are marking up the prices of specialty generic drugs dispensed at their affiliated pharmacies by hundreds -- and in some cases, thousands -- of percent, underscoring what advocates say is the need for urgent action by policymakers.
The FTC's second interim staff report on consolidated pharmacy benefit managers (PBMs) found that the three largest of these middlemen -- CVS Health's Caremark Rx, Cigna Group's Express Scripts, and UnitedHealth Group's OptumRx -- "marked up two specialty generic cancer drugs by thousands of percent and then paid their affiliated pharmacies hundreds of millions of dollars of dispensing revenue in excess of estimated acquisition costs for each drug annually."
"Of the specialty generic drugs analyzed in this report and dispensed by the 'Big Three' PBMs' affiliated pharmacies for commercial health plan members between 2020 and 2022, 63% were reimbursed at rates marked up by more than 100% over their estimated acquisition cost... while 22% were marked up by more than 1,000%," the report states.
"For the pulmonary hypertension drug tadalafil (generic Adcirca), for example, pharmacies purchased the drug at an average of $27 in 2022, yet the Big Three PBMs marked up the drug by $2,079 and paid their affiliated pharmacies $2,106, on average, for a 30-day supply of the medication on commercial claims," the publication notes. That's a staggering average markup of 7,736%.