Washington, D.C. — Following the Federal Trade Commission’s unanimous 5-0 vote to release the second part of its 6(b) investigation into consolidated pharmacy benefit managers — the drug middlemen that rake in profit at the expense of patients and independent pharmacists — the American Economic Liberties Project released the following statement.

“The FTC’s second interim report lays bare the blatant profiteering by PBM giants, which are marking up life-saving drugs like cancer, HIV, and multiple sclerosis treatments by thousands of percent and forcing patients to pay the price,” said Emma Freer, Senior Policy Analyst for Healthcare at the American Economic Liberties Project. “By steering prescriptions for the most expensive specialty generic drugs to their own pharmacies, PBMs are raking in billions in excess revenue—$7.3 billion over just five years—while squeezing independent pharmacies and leaving patients and health plan sponsors with skyrocketing costs. This report is a call to action for policymakers to dismantle these exploitative schemes, outlaw the rebate system driving up prices, and restore fairness and affordability to the U.S. healthcare system.”

The FTC’s second interim staff report sheds light on the predatory practices of the largest pharmacy benefit managers (PBMs)—CVS Health’s Caremark Rx, Cigna Group’s Express Scripts, and UniteHealth Group’s OptumRx—revealing widespread exploitation in the specialty generic drug market. The report finds that the Big Three PBMs routinely imposed exorbitant markups on specialty generic drugs dispensed at their affiliated pharmacies, with 22% of these drugs marked up by more than 1,000% and 63% by more than 100%. These price inflations disproportionately affect drugs for severe conditions such as cancer, HIV, and multiple sclerosis.

Between 2017 and 2022, the Big Three PBMs’ affiliated pharmacies generated over $7.3 billion in revenue beyond the drugs’ estimated acquisition costs while their use of spread pricing practices added another $1.4 billion in income. The report also reveals that PBMs steered the most profitable prescriptions to their affiliated pharmacies, capturing 72% of prescriptions for drugs marked up by more than $1,000 per prescription. These tactics directly result in rising costs for patients and plan sponsors, whose spending grew annually at double-digit rates. They also underscore the escalating financial burden that PBMs impose on the healthcare system and the urgent need for action.

Read “Why We Should Ban PBM Rebates” to learn more.

Read “The Pharmacy Benefit Mafia” to learn more.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.