Generic prescription drug prices marked up as high as 5,000%, investigation finds

A new FTC report found that pharmacy benefit managers have inflated the price of life-saving generic prescription drugs, finding the companies sometimes increased prices of these drugs by 1,000 percent or more.

FTC Findings on drug prices

What we know:

On January 14, 2025, the Federal Trade Commission released a second staff report into their findings of Pharmacy Benefit Manager price setting. The FTC specifically looked at generic drugs for conditions like cancer, multiple sclerosis, HIV, transplants and pulmonary hypertension.

The report stated that: "Caremark, Express Scripts and OptumRX marked up numerous specialty generic drugs dispensed at their own affiliated pharmacies by thousands of a percent, and many others by hundreds of a percent."

The report goes on to say, "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 to 22."

FOX 9 looked further into the pricing in the report and found that a multiple sclerosis drug called Dalfampridine can be purchased for cash for about $10 at pharmacy counters or online through Cost Plus Drugs for a 30-day supply. But the FTC found that employers and customers through insurance plans get billed about $1,000 dollars for that same 30-day supply.

The cancer drug Imatinib can be purchased for cash at a pharmacy counter or online at Cost Plus Drugs for around $34.50 for a 30-day supply, but health plans are billed between $2,000 to $6,000 for that same supply.

What are PBMs?:

Pharmacy Benefit Managers are supposed to be middlemen that negotiate prescription drug prices for health plans. Over the last 15 to 20 years, they’ve started to merge and acquire one another. Now, Express Scripts, Optum RX and CVS Caremark set prices for 80 percent of prescription drugs in the United States, according to the Federal Trade Commission.

Those three PBMs are also in ownership chains with insurance companies and their own pharmacy systems, like mail order. Optum Rx is in an ownership chain with United Health Group, Express Scripts is under the same umbrella as Cigna and CVS Caremark is under the same ownership as Aetna.

Dig deeper:

You can read the entire FTC staff report here.

You can see more of FOX 9’s investigations into drug prices by clicking below.

Response to the investigation

What they're saying:

Pharmacists from across the country accused PBMs of driving up profits for their own pharmacies while driving smaller pharmacists out of the industry.

One pharmacist testified that she recently resorted to selling her own baked goods to stay in business, saying her margins are higher on a cup of coffee.

Pharmacists in Minnesota recently told FOX 9 that PBMs control everything.

"The big three control who I can fill prescriptions for, what prescription I can fill, how often I can fill them and what I’m going to get paid for it," Debroah Keaveny said.

Keaveny has joined a class action lawsuit against PBMs and is advocating for new legislation at the state and federal level.

The other side:

In statements to FOX 9, OptumRx insists they are lowering the cost of specialty medications. Express Scripts says the FTC report narrowly focuses on just a few drugs. CVS Caremark has not yet responded to our request for comment on the second FTC report.

Express Scripts statement

"This is another set of misleading conclusions based on a subset of medications that represent less than 2% of what our health plans spend on medications in a year - much like their first interim report that the FTC itself has already said is ‘limited’ and ‘tentative’. Nothing in the FTC’s report addresses the underlying cause of increasing drug prices, or helps employers, unions, and municipalities keep prescription benefits affordable for their members. We look forward to continuing to address the blatant inaccuracies in the Commission’s reports."

OptumRX statement

Optum is lowering the cost of specialty medications, which comprises half of all drug expenditures, and providing clinical expertise, programs and support for patients with complex and rare conditions. In 2024, we helped eligible patients save $1.3 billion and the median out-of-pocket payment for these patients was $5.  

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