On Tuesday, the U.S. Federal Trade Commission (FTC) presented evidence that UnitedHealth Group’s OptumRx, along with its two main competitors, Express Scripts and CVS Caremark Rx, inflated the prices of specialty generic medications, particularly those that treat cancer, heart disease, and HIV.
The report found that these “Big 3” pharmacy benefit managers (PBMs) in the U.S. pocketed about $7.3 billion in excess revenue between 2017 and 2022 by marking up certain medicines by thousands of percent, and many others by hundreds of percent.
The report also found that the three PBMs are steering prescriptions that are highly profitable to their own affiliated pharmacies and away from pharmacies that aren’t affiliated with them.
The latest report builds on a report issued by FTC staff in July 2024, which found that pharmacies affiliated with the Big 3 PBMs received 68% of the dispensing revenue generated by specialty drugs in 2023, up from 54% in 2016. The latest report analyzes a broader set of specialty generic drugs compared to two specialty generic drugs analyzed in the July 2024 report and finds that the Big 3 PBMs impose significant markups on a wide array of specialty generic drugs.
Additionally, the Big 3 PBMs separately generated an estimated $1.4 billion of income from spread pricing — i.e., billing their plan sponsor clients more than they reimburse pharmacies for drugs.
PBMs Object to FTC’s Price Gouging Findings
Response from the PBMs has been defensive, with Express Scripts saying the findings are misleading. CVS is alleging the FTC prioritized testimony from drugmakers and pharmacies that stand to benefit from weakening PBMs, reports FirstWord Pharma. UnitedHealth Group’s OptumRx responded to the report by claiming the company helped patients save $1.3 billion in 2024.
UnitedHealth CEO Brian Thompson was shot to death in December. His suspected killer, Luigi Mangione, had written a manifesto denouncing the healthcare industry and received an outpouring of support on social media from members of the public who are fed up with America’s healthcare system.
Thompson managed UnitedHealth’s insurance group, which denied twice as many claims as the industry average, reports Fortune. His murder prompted the NYPD to warn that the ambush could “extremists and grievance-driven malicious actors to violence.”
