Middlemen have outsized influence on drug prices due to market consolidation,FTC

The U.S. Federal Trade Commission (FTC) has highlighted the significant influence of pharmacy benefit managers (PBMs) on prescription drug prices in the United States due to market consolidation. The FTC's interim staff report revealed that the three largest PBMs, including UnitedHealth Group Inc's Optum unit, CVS Health Corp's CVS Caremark, and Cigna Corp's Express Scripts, control 79% of U.S. prescription drug claims. These PBMs negotiate discounts with drug manufacturers, manage lists of covered medications, and reimburse pharmacies. The report raised concerns about PBMs potentially inflating drug costs and disadvantaging smaller pharmacies and consumers. The FTC emphasized the lack of transparency and public accountability in how PBMs set drug prices and coverage. The investigation also uncovered instances of PBMs favoring their affiliated businesses, leading to conflicts of interest and hindering competition from independent pharmacies. The FTC's findings underscore the need for greater regulation and scrutiny of PBMs to address rising healthcare costs and ensure fair access to prescription drugs for Americans.