Current:Home > MyFTC says prescription middlemen are squeezing Main Street pharmacies -TradeGrid
FTC says prescription middlemen are squeezing Main Street pharmacies
View
Date:2025-04-13 05:18:55
Prescription drug middlemen — also known as pharmacy benefit managers — are lining their pockets by inflating drug prices, including overcharging cancer patients, the Federal Trade Commission said Tuesday.
"The FTC's interim report lays out how dominant pharmacy benefit managers can hike the cost of drugs — including overcharging patients for cancer drugs," FTC Chair Lina M. Khan said in a news release. "The report also details how PBMs can squeeze independent pharmacies that many Americans — especially those in rural communities — depend on for essential care."
Pharmacy Benefit Managers began, decades ago, as administrators, validating and processing pharmacy benefits provided by separate insurance plans. After years of acquisitions, that's no longer the case, as the FTC lays out in its report.
PBMs now serve as vertically integrated health plans and pharmacists, wielding enormous control over the availability and cost of drugs by negotiating the terms and conditions for access to prescription medications for hundreds of million of Americans.
The three largest PBMs — CVS Caremark, Express Scripts and OptumRX — now manage almost 80% of all prescriptions filled in this country, the FTC noted. If the next three largest — Humana Pharmacy Solutions, MedImpact and Prime — are included, the six will oversee 94% of prescription drug claims in the U.S.
All of the six largest PBMs run mail order and specialty pharmacies and one — CVS Caremark — operates the country's biggest retail pharmacy chain. Five of those six are now part of corporate health care conglomerates, including three of the five biggest health insurers in the country.
Bad deal for patients
The setup is a dire one for many Americans, with roughly three in 10 adults surveyed by KFF (formerly known as the Kaiser Family Foundation) reporting rationing or skipping doses of prescription medications because of the cost.
The scenario is also fostering pharmacy deserts, especially in rural parts of the country, which saw 20% of independent retail pharmacies close from 2013 to 2022. "Certain PBMs may be steering patients to their affiliated pharmacies and away from unaffiliated pharmacies," the FTC stated.
Affiliated pharmacies received significantly higher reimbursement rates than those paid to unaffiliated pharmacies for two case study drugs, according to the regulator's findings. "These practices have allowed pharmacies affiliated with the three largest PBMs to retain levels of dispensing revenue well above estimated drug acquisition costs, resulting in nearly $1.6 billion of additional revenue on just two cancer drugs in under three years," the report states.
PBMs and brand drugmakers at times negotiate rebates that are conditioned on limiting access to potentially lower cost generic alternatives, potentially cutting off patient access to lower-cost medicines, the FTC said.
The interim staff report is part of an ongoing probe launched in 2022 by the FTC, and serves as a possible sounding board for action as U.S. lawmakers look for culprits behind the high cost of prescription drugs.
Georgia Rep. Buddy Carter, a pharmacist and Republican, called on the FTC to finish its probe and start enforcement actions if and when it finds "illegal and anti-competitive" practices.
"I'm proud that the FTC launched a bipartisan investigation into these shadowy middlemen, and its preliminary findings prove yet again that it's time to bust up the PBM monopoly," Carter said Tuesday in a statement.
The Pharmaceutical Care Management Association bashed what the PBM trade group called a biased report "based on anecdotes and comments from anonymous sources and self-interested parties" along with two "cherry-picked case studies."
Kate GibsonKate Gibson is a reporter for CBS MoneyWatch in New York, where she covers business and consumer finance.
veryGood! (721)
Related
- B.A. Parker is learning the banjo
- 2024 Olympics: What Made Triathlete Tyler Mislawchuk Throw Up 10 times After Swim in Seine River
- Surgical castration, ‘Don’t Say Gay’ and absentee regulations. New laws go into effect in Louisiana
- Scammers are taking to the skies, posing as airline customer service agents
- Toyota to invest $922 million to build a new paint facility at its Kentucky complex
- New York politician convicted of corruption to be stripped of pension in first use of forfeiture law
- Who were the Russian prisoners released in swap for Paul Whelan, Evan Gershkovich?
- Rachel Bilson Shares Rare Insight Into Coparenting Relationship With Ex Hayden Christensen
- What do we know about the mysterious drones reported flying over New Jersey?
- I Tried This Viral Brat Summer Lip Stain x Chipotle Collab – and It’s Truly Burrito-Proof
Ranking
- As Trump Enters Office, a Ripe Oil and Gas Target Appears: An Alabama National Forest
- Airline passenger gets 19-month sentence. US says he tried to enter cockpit and open an exit door
- An assassin, a Putin foe’s death, secret talks: How a sweeping US-Russia prisoner swap came together
- Georgia governor suspends Newton County commissioner accused of taking kickback
- Nearly half of US teens are online ‘constantly,’ Pew report finds
- Unemployment rise spurs fears of slowdown, yet recession signals have been wrong — so far
- USA beach volleyball's perfect top tandem braves storm, delay, shows out for LeBron James
- Judge overturns $4.7 billion jury award to NFL Sunday Ticket subscribers
Recommendation
Senate begins final push to expand Social Security benefits for millions of people
DOJ finds 5 Texas juvenile detention centers abused children
Tiffany Haddish Shares the NSFW Side Hustle She Used to Have Involving Halle Berry and Dirty Panties
Brittney Griner on Paul Whelan, Evan Gershkovich being released: 'It's a great day'
Who's hosting 'Saturday Night Live' tonight? Musical guest, how to watch Dec. 14 episode
For Marine Species Across New York Harbor, the Oyster Is Their World
'Chronically single' TikTokers go viral for sharing horrible dating advice
When does Simone Biles compete next? Olympic gymnastics event finals on tap in Paris