FTC Report Reveals Alleged Price Gouging by Major Pharmacy Benefit Managers
The Federal Trade Commission (FTC) has released a damning interim report accusing major pharmacy benefit managers (PBMs) of inflating the costs of specialty generic drugs by significant percentages. The report specifically charges OptumRx, UnitedHealthcare’s PBM, along with PBMs associated with Cigna and CVS, of engaging in practices that have led to substantial price hikes for critical medications.
According to the FTC’s findings, several life-saving drugs have been subject to these alleged price inflations. Matinib, a generic version of the leukemia medicine Gleevec, abiraterone for prostate cancer, and lamivudine for HIV treatment are among the drugs affected. In some cases, such as with lamivudine, the FTC reports that PBMs marked up prices to four times their acquisition cost.
The investigation revealed that 22% of all analyzed specialized medications were marked up by the “Big 3 PBMs,” resulting in hundreds of millions of dollars in dispensing revenue above acquisition costs for these companies.
This report comes in the wake of previous studies highlighting high out-of-pocket costs for patients. The American Urology Association had earlier reported that patient costs for abiraterone ranged from $1,379 to $13,274 annually, underscoring the financial burden on individuals requiring these essential medications.
The timing of the FTC report has drawn additional attention due to its proximity to the recent assassination of UnitedHealthcare CEO Brian Thompson. The suspect, Luigi Mangione, allegedly had negative healthcare experiences, sparking public discussions and social media conversations about denied care experiences.
The FTC emphasizes that this is an interim report, updating the July 2024 version, with the investigation still ongoing. Industry observers anticipate that the final report may contain even more revelations about PBM practices and their impact on healthcare costs.
This investigation also brings to light related issues in the healthcare industry, including UnitedHealthcare’s reported high rate of claim refusals. The findings have broader implications for healthcare and insurance practices across the United States.
As the healthcare industry awaits the final FTC report, the interim findings have already sent shockwaves through the sector. The potential consequences of these allegations could lead to significant changes in how PBMs operate and how drug pricing is managed in the future.
