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ARLINGTON, Va. – The National Association of Chain Drug Stores is praising the Federal Trade Commission’s (FTC) unanimous, 5-0, vote on Monday to release the second interim staff report on the FTC’s study of big pharmacy benefit manager (PBM) tactics.
The report – which follows the first installment released in July 2024 – focuses on PBMs’ “influence over specialty generic drugs, including significant price markups by PBMs for cancer, HIV, and a variety of other critical drugs.”
In advance of the January 14 open meeting, NACDS provided to the FTC a video statement urging the release of the report.
Upon the FTC’s unanimous vote to make public its additional findings, NACDS President and CEO Steven C. Anderson said, “The problems of big-PBM tactics remain obvious. The bipartisan and broadly-backed solutions remain ready in Congress. Time is wasting – as is Americans’ money. It’s time to stop this rip-off and to deliver a win for the American people.”
Anderson continued, “Just as the big PBMs have concealed and expanded their tactics for more than a decade, they will do and say anything in an attempt to entrench their self-serving status quo. The people’s leaders in Washington, D.C. and across the states need to remain accountable to those who elected them and deliver the reforms that will end pharmaceutical benefit manipulation that is devastating Americans, their pharmacies, taxpayers, employers, and entire communities.”
As described in the second interim staff report, the FTC found that market-dominant PBMs “marked up numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent, and many others by hundreds of percent. Such significant markups allowed the Big 3 PBMs and their affiliated specialty pharmacies to generate more than $7.3 billion in revenue from dispensing drugs in excess of the drugs’ estimated acquisition costs from 2017-2022. The Big 3 PBMs netted such significant revenues all while patient, employer, and other health care plan sponsor payments for drugs steadily increased annually, according to the staff report.”
Overall, the second report detailed insights related to PBM tactics in the following areas:
- Significant price markups
- Dispensing the most profitable drugs
- Over $7.3 billion of dispensing revenue in excess of the National Average Drug Acquisition Cost (NADAC)
- Generating additional income via spread pricing
- Specialty generic drugs help drive parent healthcare conglomerates’ operating income
- Plan sponsor and patient drug spending increased significantly.
With Inauguration Day just one week away, Anderson noted that the FTC’s findings are consistent with comments by President-elect Donald Trump in two national media appearances in one week’s time in December 2024 – on Meet the Press and in a press conference.
The FTC’s study also is highly consistent with findings of the investigation by the U.S. House of Representatives Oversight and Accountability Committee, chaired by U.S. Rep. James Comer (R-KY). That panel issued a report of its findings in July 2024.
