The Federal Trade Commission today set off a new round of debate about the role of big pharmacy benefit managers in shaping U.S. prescription drug prices by posting a second interim staff report.
This time, the FTC focused on charges for high-cost specialty drugs at the pharmacies of the three biggest PBMS — Cigna’s Express Scripts unit, the CVS Health Caremark unit and the UnitedHealth Optum Rx unit.
The three biggest PBM-owned pharmacies charged commercial health plans and Medicare prescription drug plans $10 billion for 51 specialty drugs between 2017 through 2021 and paid about $2.7 billion for the drugs, based on National Average Drug Acquisition Cost statistics, officials said.
The gap between what the plans paid over that period and the drug acquisition costs was $5.9 billion for commercial health plans.
For all plans studied, the PBM-owned pharmacies’ total dispensing revenue increased to $2.6 billion in 2021, from $2.1 billion in 2017.
Expansion of the spread between what the PBM pharmacies charged plans and what the pharmacies paid for drugs added $336 million to the pharmacies’ revenue between 2017 and 2021, the staff estimated.
The FTC staff did not address the impact of the COVID-19 pandemic or of other cost drivers other than drug acquisition costs, and the staff did not compare PBM pharmacies’ operating margins with operating margins at other prescription drug market players.
The new report is a sequel to a report, released in July, that accused big PBMs of paying their own pharmacies more for drugs than they paid outside pharmacies.
The 51 drugs analyzed were specialty generic drugs used to treat conditions such as multiple sclerosis, leukemia and pulmonary hypertension.
There was some uncertainty about whether the FTC would agree to release the interim report. Sen. Elizabeth Warren, D-Mass., a critic of the big PBMs and their pharmacies, joined with Sen. Craig Hawley, R-Mo., Rep. Diana Harshbarger, R-Tenn., and Rep. Jake Auchincloss, D-Mass., to write a letter calling for the FTC to approve the release.
FTC Chair Lina Khan said in a comment that the report shows that the big PBMs used their pharmacies to hike up the cost of lifesaving drugs.
“The FTC should keep using its tools to investigate practices that may inflate drug costs, squeeze independent pharmacies, and deprive Americans of affordable, accessible health care,” Khan said.
The PBMs argue that they have worked hard to negotiate lower prices for health plan sponsors and patients, and that the FTC staff has relied mainly on the parties that the PBMs negotiate with for ideas and information.
Express Scripts has gone to court to sue the FTC for defamation over the release of the first report, stating that it spent millions of dollars to provide data that the FTC staff seemed to ignore.
The FTC staff says in the new report that, although it received a great deal of data, it has not received all of the data it wants and is still working with the PBMs to obtain more data.