PBMs' Profit Surge: How Skyrocketing Markups are Driving Up Drug Costs
The Federal Trade Commission (FTC) reports that the three largest pharmacy benefit managers (PBMs) and their affiliated pharmacies generated $7.3 billion in revenue above the National Average Drug Acquisition Cost (NADAC)—the benchmark for drug procurement costs—on specialty generic drugs between 2017 and 2021. During this time, payments from plan sponsors and patients for these drugs grew at compound annual rates of 21% for commercial claims and 14-15% for Medicare Part D claims. These three PBMs—Caremark Rx, LLC (CVS), Express Scripts, Inc. (ESI), and OptumRx, Inc. (OptumRx)—control over 80% of all prescriptions in the U.S. The FTC highlights that their vertical integration with insurers and pharmacy chains amplifies their market dominance and profitability.
PBMs' Profit Surge: How Skyrocketing Markups are Driving Up Drug Costs