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1000% markups: FTC report blasts PBMs
Pharmacy benefit managers (PBMs) make billions in profit while driving up the price of prescription drugs with markups exceeding 1,000%, says a new Federal Trade Commission (FTC) report.
The takeaway: The three largest PBMs and affiliated pharmacies earned $7.3 billion in revenue above the National Average Drug Acquisition Cost (NADAC) on specialty generic drugs alone during 2017-2021, according to the FTC’s second report on “the prescription drug middleman industry.”
A focus on specialty drugs: After FTC’s July report highlighted PBMs’ vertical integration with insurers and pharmacies, this report shows how PBMs use market power to profit from hiking prices on specialty generic drugs, which target conditions like cancer, HIV, or rare diseases.
A few more findings:
- Drugs are marked up “hundreds and thousands of percent.”
- PBMs steer profitable prescriptions to affiliated pharmacies.
- PBMs bill sponsor clients more than they reimburse pharmacies for drugs.
- Patients’ and plan sponsors’ spending on drugs increased significantly.
- Specialty generic drugs are a major profit driver for the three largest PBMs.
BIO has long called for PBM reform, explaining how PBMs cause patients to lose out on rebates, independent pharmacies to close, and drug prices to rise (among other abuses).
Read more in Bio.News.
What patients need to know about Medicare Part D changes
To help patients navigate important Medicare Part D changes, Bio.News asked the National Health Council (NHC) to explain what’s new.
Out-of-pocket cap: The highest-profile change to Medicare in 2025 is a $2,000 per year limit on beneficiary costs for prescription drugs, including copays and coinsurance.
Smoothing: Patients can spread drug costs out over the year but must enroll in the Medicare Prescription Payment Plan (MPPP).
To help patients understand and navigate these changes, NHC, Medicare Access for Patients Rx (MAPRx), and several other patient advocacy groups launched outreach and education campaigns. “Medicare is rolling out several new benefits in 2025,” explains the NHC. “These new benefits may be confusing to beneficiaries, and coupled with other big changes, may result in Medicare plans looking very different going forward.” NHC is eager to hear how the new changes and enrollment systems are affecting patients or caregivers. To share your experience (good, bad, or indifferent), you can contact MedicarePartD@nhcouncil.org.
More people are eligible for the Low-Income Subsidy Program, which provides reduced Part D costs for patients with limited income. Beneficiaries with an income of up to 150% of the federal poverty level are now eligible.
Do you have questions? NHC and MAPRx have resources, and Bio.News has more insights.
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