The Federal Trade Commission (FTC) sharply criticized pharmacy benefit managers (PBMs) in a 71-page report, accusing them of inflating drug costs and squeezing independent pharmacies. This marks a significant shift for the FTC, which has historically taken a hands-off approach to regulating PBMs. While the FTC has not yet taken legal action, the report could lead to formal investigations or lawsuits, and may fuel legislative efforts to impose limits on the industry.
The three largest PBMs—CVS Health’s Caremark, Cigna’s Express Scripts, and UnitedHealth Group’s Optum Rx—process about 80% of U.S. prescriptions, negotiating prices with drug makers and deciding drug availability and cost. Critics argue that the consolidation and control exerted by PBMs have driven up drug costs. Chair Lina Khan highlighted the report’s findings, including how PBMs overcharge patients and squeeze independent pharmacies, which are essential for rural communities.
The PBM industry disputed the FTC’s findings, with Express Scripts’ spokeswoman Justine Sessions calling the conclusions biased and ineffective against rising drug prices driven by pharmaceutical companies. PBMs defend their practices by claiming they save money for employers, governments, and patients, leveraging their scale to negotiate with pharmaceutical companies. Despite the report’s criticisms, the FTC’s decision to issue it was not unanimous, with two Republican commissioners expressing concerns over the strength of the evidence.
