This week, the Federal Trade Commission released a report showing the impact drug middlemen are having on the cost of prescription medications in the United States.
According to the report, six of the largest of what are known as "pharmacy benefit managers" control 95% of the prescriptions filled in the U.S. These companies are third parties that negotiate prices between insurance companies and pharmacies, often leading to more out-of-pocket costs for patients.
"One in three people in this country cannot afford to pay for their prescription drugs,” said Merith Basey, executive director of the advocacy group Patients for Affordable Drugs. “[These negotiations] are one big black box. We don’t know what goes on behind those closed doors. Show us the receipts if you say you’ve been set up to support patients and to negotiate a better deal."
The FTC report states pharmacy benefit managers (PBMs) "wield enormous power over patients’ ability to access and afford their prescription drugs, allowing PBMs to significantly influence what drugs are available and at what price.”
The report goes on to say this can have dire consequences on patients, with nearly 30% of Americans surveyed reporting rationing or even skipping doses of their prescribed medicines due to high costs.
“[My medications] are around $4,000-$5,000 without any insurance applied [per month],” said Giovanna Burno, a 26-year-old with transverse myelitis, a debilitating condition similar to multiple sclerosis.
Her diagnosis, along with other conditions, force Burno to take 24 prescription medications each month.
“Whether or not I can go on a trip depends on whether or not I have enough medication for it, and if I can get it where I'm going,” she said. “My mealtimes are determined by my pill times. My bedtime is determined by my pill times. When I wake up, if I can go out with friends, [determines] what I can or can't consume."
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"I get to know my pharmacist really well because I get to see them every month," added Kevin Trager, a 35-year-old in Kentucky.
Trager has been managing Type 1 Diabetes for 23 years and says he is fortunate he can afford his health care plan that reduces the cost of insulin, but it does not shield him from the effects of PBMs on the industry.
Earlier this year, Trager said his insurance told him he had to switch the insulin brand he had been taking for years. The change caused him to take too much, since he was used to the dosing of his previous prescription.
“I started taking this new insulin because my insurance company told me I had to. Thirty-two units (the previously prescribed dose) was too much, so I was overdosing on insulin when I first started taking the new brand," he said. “Living with Type 1 diabetes is pretty stressful in and of itself. It's a constant 24/7 balancing act."
According to the FTC report, the market for pharmacy benefit management services has become highly concentrated, and the largest PBMs are now also vertically integrated with the nation’s largest health insurers and specialty and retail pharmacies.
The report states the top three PBMs processed nearly 80% of the approximately 6.6 billion prescriptions dispensed by U.S. pharmacies in 2023, while the top six PBMs processed more than 90%.
It added that pharmacies affiliated with the three largest PBMs now account for nearly 70% of all specialty drug revenue.
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Scripps News reached out to the Pharmaceutical Care Management Association, the governing body for pharmacy benefit managers, for comment on the FTC's report, but has not yet heard back.
According to Congress, Americans pay more for their medications than any other country in the world.
"When you have a middleman that's kind of controlling the cost, it definitely puts certain people in a more precarious situation,” said Kris Garcia, who lives in Colorado.
Garcia has four blood conditions, one of which prevents his blood from coagulating. The condition forces him to have medication on hand at any given moment in case of an emergency that causes bleeding.
"It costs $10,000 per treatment. So, it can get real costly real quick,” he said.
Garcia says he has $120,000 worth of the medication in his home at all times since a single treatment only allows his blood to coagulate for four hours. Even with insurance, he says he’s paying upward of $2,000 every month.
According to the FTC’s report, several of the PBMs that were issued orders to hand over information have not been “forthcoming and timely in their responses, and they still have not completed their required submissions, which has hindered the Commission’s ability to perform its statutory mission.” The report goes on to say “FTC staff have demanded that the companies finalize their productions required by the 6(b) orders promptly. If, however, any of the companies fail to fully comply with the 6(b) orders or engage in further delay tactics, the FTC can take them to district court to compel compliance.”
