The Federal Trade Commission’s July, 2024, interim staff report on drug pricing practices is called Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies. It describes how pricing works, the way in which the PBMs can control prices through vertical integration, where they have affiliated pharmacies that sell to us exclusively because we have bought into drug insurance through these PBMs, and how three PBMs dominate the field: CVS Health’s Caremark Rx (which I have bought into), Cigna Group’s Express Scripts, and United Health’s OptumRx. They control about 80% of the market, which makes it difficult to function as an independent pharmacy. The report is about a 70 page read, but there is a 5 page executive summary. You can get the report by clicking on the linked title.
Last week, the FTC published a second staff report on the subject. This one is titled Specialty Generic Drugs: A Growing Profit Center for Vertically Integrated Pharmacy Benefit Managers. It’s a shorter read, about 30 pages, but some of it is pretty shocking. Click the linked title if you want to look at its study of actual pricing on some drugs that are pretty essential. The markup over the cost of the drug is usually double and very often (over 20% of the time) more than ten-fold. The affiliated pharmacies get enormous kickbacks.
When the second FTC report came out, Brett Wilkins, of Common Dreams published a short news article about it: FTC Report Shows Big Pharma Middlemen Jack Up Prices by Up to 7,736%. Just click on the title.