‘Big 3’ pharmacy benefit managers marked up drugs by $7.3B: FTC
The nation’s three largest pharmacy benefit managers (PBMs) made significant markups to “lifesaving” medications at pharmacies they owned, the Federal Trade Commission said Tuesday, Jan. 14. The preliminary report comes as PBMs face increased scrutiny and bipartisan legislation to rein them in.
The “Big 3” pharmacy benefit managers marked up generic drugs filled by their affiliated pharmacies by hundreds and even thousands of percent, according to the FTC’s preliminary report.
The regulator said the markups allowed CaremarkRX, Express Scripts and OptumRX to earn $7.3 billion in revenue from dispensing those drugs from 2017 to 2022. The FTC said the $7.3 billion is the difference between the estimated cost to acquire the drug and what they are being reimbursed.
The report is part of an ongoing FTC investigation into the PBM market.
“The FTC staff’s second interim report finds that the three major pharmacy benefit managers hiked costs for a wide range of lifesaving drugs, including medications to treat heart disease and cancer,” outgoing FTC Chair Lina Khan said in a statement. “The FTC should keep using its tools to investigate practices that may inflate drug costs, squeeze independent pharmacies, and deprive Americans of affordable, accessible healthcare—and should act swiftly to stop any illegal conduct.”
A trade group representing PBMs cast doubt on the veracity of the latest report.
“It’s clear this report again fails to consider the entirety of the prescription drug supply chain and makes sweeping assertions about the role of PBMs disconnected from a full appreciation of their critical cost-saving role for employers, unions, taxpayers, and patients,” the Pharmaceutical Care Management Association said in a statement to Straight Arrow News.
The FTC said patients paid $297 million for these drugs in 2021, while plan sponsors paid $4.8 billion. Between 2017 and 2021, costs for both parties increased about 21% per year for commercial health plans and 14% to 15% for Medicare Part D claims.
It’s another narrative PCMA is pushing back against. In a survey commissioned by the trade group, 90% of responding employers “expressed satisfaction with their PBMs’ clarity and transparency of contract terms,” while 88% “expressed satisfaction with their PBMs’ ability to provide the lowest costs for employees at the pharmacy counter.”
A PBM is an intermediary between insurance companies and pharmacies. Ultimately, the middlemen decide whether a drug is covered and how much the pharmacy and the patient must pay for the medication.
Critics of PBMs said consolidation in the industry is a major problem. In multiple cases, insurance providers, PBMs and pharmacies are all owned by the same corporation.
CaremarkRX is part of a group owned by health insurance firm Aetna and pharmacy heavyweight CVS. OptumRX is part of UnitedHealth Group. Cigna owns Express Scripts.
The FTC’s interim report found the PBMs in question reimbursed the pharmacies they owned more than providers that weren’t under their umbrella.
PBMs are receiving bipartisan criticism in Congress. In December, Sens. Elizabeth Warren, D-Mass., and Josh Hawley, R-Mo., sponsored a bill that would force companies that own health insurers or pharmacy benefit managers to sell off their pharmacy business.
SCOTUS to hear case that could impact ACA’s preventive health coverage
The Supreme Court has agreed to hear a case that could impact the future of certain “free preventive healthcare services” under the Affordable Care Act. At the heart of the case is the constitutionality of the U.S. Preventive Services Task Force, which recommends more than 100 preventive services that insurers and group health plans must cover at no cost to patients.
The case was triggered by a legal challenge to the task force’s recommendation that a medication to reduce the risk of contracting HIV be fully covered for recipients of former President Barack Obama’s signature health care law. America First Legal, on behalf of four individuals and two small businesses, filed a lawsuit in Texas. They argue they should not be forced to provide full insurance coverage for services like HIV prevention medication. They cite “religious and procedural” objections.
America First Legal also contends that the task force members who make decisions on such matters are unconstitutional. They say it is because they were not nominated by the president or confirmed by the Senate, as required for “principal” officers under the Constitution.
In 2023, the 5th U.S. Circuit Court of Appeals ruled that task force members are, in fact, principal officers who should have undergone the nomination and confirmation process.
The Biden administration appealed to the Supreme Court. They argue the decision “threatens healthcare protections for millions of Americans that have been in place for 14 years.”
If the Supreme Court rules in favor of the individuals and businesses who sued, it could eliminate the requirement for insurers to cover the full cost of services such as birth control, vaccines and mental health screenings.
The challengers are now seeking to reintroduce some of the arguments that the 5th Circuit rejected in their appeal to the Supreme Court.
In a petition filed in September, the Justice Department argued that the task force’s decade of coverage recommendations are legal and should be upheld. They warn that a rollback would jeopardize healthcare protections for millions of Americans.
The timing of the Supreme Court’s action, coupled with President-elect Donald Trump’s November victory, raises questions about whether his incoming administration will support the Biden administration’s position or opt not to defend the panels that set coverage requirements under the ACA, which Trump has criticized. If Trump’s Justice Department does not defend the task force, the high court may appoint a different lawyer to do so.
The case is likely to be heard in March or April. While awaiting the Supreme Court’s decision, both the federal government and the challengers have been operating under a compromise. “Obamacare’s” insurance requirements remain in place nationwide, but the government cannot enforce them against the plaintiffs in the Texas case.
Millions enroll in Affordable Care Act, breaking records as Biden exits
As President Joe Biden prepares to leave office, the White House announced a new record: nearly 24 million Americans signed up for health insurance. Last month, the federal government opened the annual enrollment period on Healthcare.gov, providing millions of Americans the opportunity to secure coverage through the Affordable Care Act (ACA).
The law, originally passed under President Barack Obama, was designed to make health insurance more accessible and affordable.
In a statement, Biden reiterated his commitment to improving health care access. He said, “I made a promise to the American people that I would bring down the cost of health care and prescription drugs.” He added that expanding access to health care has been a key priority throughout his presidency.
Enrollment for 2025 increased by 9%, or about 3.2 million new enrollees. Biden said that these numbers reflect a significant achievement, with total enrollment having more than doubled since he took office.
Biden also emphasized his administration’s ongoing political challenges, particularly from Republican opposition. He noted the work that is still needed to protect programs like Medicare and Medicaid. Biden urged Congress to take action during the current legislative session.
“We must ensure Americans have access to quality, affordable healthcare by extending the ACA premium tax credit this year,” Biden said. The tax credit program helps lower the cost of premiums for many Americans.
According to the Congressional Budget Office, if the tax credits expire, nearly 4 million people could lose their coverage over the next eight years, resulting in a significant rise in the uninsured rate.
As President-elect Donald Trump prepares his return to the White House, the ACA’s future is uncertain. During his first term, Trump attempted to remake the ACA but was ultimately unsuccessful.
However, in a shift from previous positions, Trump says he no longer wants to end the program. Instead, he wants to make it more affordable.
The White House expects enrollment numbers to continue to rise. The deadline for Americans to sign up is still several weeks away.
Biden administration bans medical debt from credit reports
With less than two weeks left until President Joe Biden leaves office, his administration announced a new rule Tuesday, Jan. 7, that could lift the credit scores of millions of Americans. The finalized rule will not only stop medical debt from being included on credit reports, it will also ban lenders from using certain medical information in loan decisions.
The rule also bans lenders from using medical devices like wheelchairs or prosthetic limbs as collateral for loans and bars lenders from repossessing the devices if patients aren’t able to repay the loans.
Lenders will still be able to consider medical information in certain situations, like when the loan would be used to pay health expenses or if a person asks for a temporary postponement of loan payments for medical reasons.
Today, the CFPB finalized a rule that will remove an estimated $49 billion in medical bills remaining on the credit reports of about 15 million Americans.https://t.co/PeCoLAeQSH
The CFPB says the measure will boost the credit scores of people with medical debt by 20 points on average. It’s also expected to lead to the approval of 22,000 additional mortgages a year.
The rule would take effect 60 days after it’s published in the federal register. However, the incoming Trump administration could undo the new rule because Congress has the opportunity to review and rescind final rules. President-elect Donald Trump is set to be inaugurated on Jan. 20.
According to AARP, this cap will have the biggest impact on senior citizens who take multiple medications and those who have high-cost prescriptions. AARP said until now there has been no out-of-pocket spending cap for prescriptions through Medicare, putting many at risk of “significant financial burdens.”
The new limit applies to anyone who is on the Medicare Part D plan and those on Medicare Advantage, which is offered through private insurers. It’s also important to note the cap only covers drugs under the Part D plan’s list of covered drugs, so if a medication is not on that list, it will not apply toward the out-of-pocket max.
Health policy site KFF said there are more than 50 million Americans who get their prescriptions through Medicare Part D or a Medicare Advantage plan.
Government shutdown looms as House votes against latest funding bill
A government shutdown looms nearer after the House rejected a bill that would have kept it funded into March. And drones are now banned in parts of New York and New Jersey after a spate of mysterious sightings. These stories and more highlight your Unbiased Updates for Friday, Dec. 20, 2024.
House votes against latest stopgap bill aimed to avoid government shutdown
The House rejected a stopgap bill Thursday, Dec. 19, that would have kept the government running. The vote came ahead of a potential shutdown starting at midnight Saturday, Dec. 21, when lawmakers head home for the holidays.
The bill fell short of the needed two-thirds majority to speed up its passage. More than three dozen Republicans joined 197 Democrats in voting against it. Republicans split with each other on how the bill handles government spending.
“Three hundred and thirty billion dollars. Congratulations. You’ve added to the debt since you were given the majority again on Nov. 5,” Rep. Chip Roy, R-Texas, said.
Roy voted against the bill.
He added, “It’s embarrassing. It’s shameful. Yes, I think this bill is better than it was yesterday in certain respects. But to take this bill, to take this bill yesterday and congratulate yourself because it’s shorter in pages but increases the debt by $5 trillion, is asinine.”
Meanwhile, Rep. Anna Paulina Luna, R-Fla., said on the House floor, “The deal on the table will keep the government open for the American people and if you guys so choose to shut it down, it will be on you but not the Republican Party.”
She added, “We will not be going back to the table. This deal stands as it is. So let you go back home on Christmas and explain to your people why you shut down the government because we won’t be doing it.”
The latest spending bill, known as a continuing resolution, is a quickly amended bill tailored to the liking of President-elect Donald Trump and his top ally Elon Musk.
Musk postedrepeatedlyonX condemning the original bill. House Speaker Mike Johnson, R-La., worked on it with bipartisan support from Republicans and Democrats.
However, when both Musk and Trump opposed the bill, that guaranteed most House Republicans would vote against it and forced Johnson to craft a new bill.
Now, there are two conflicting interests. Musk wants major government spending cuts, and while Trump agrees, he also wants to permanently suspend the debt ceiling.
The new plan lifts the debt limit, leading Trump to support the bill in a Truth Social post.
“Now we can Make America Great Again, very quickly, which is what the People gave us a mandate to accomplish,” Trump posted.
But Democrats attacked the bill over what spending Republicans chose to cut.
“The Musk-Johnson proposal is not serious, it’s laughable,” said House Minority Leader Rep. Hakeem Jeffries, D-N.Y. “Extreme MAGA Republicans are driving us to a government shutdown.”
The bill removed funding for a bipartisan program for pediatric cancer research, studying genetic conditions like Down syndrome and treatment options for sickle cell disease as well as cancers.
It will be on Johnson to craft a bill to secure votes from the majority of the House.
However, Johnson may not have the political leeway to rely on support from Democrats. He’ll need nearly every returning member of the House Republican caucus to vote for him next month to remain speaker.
The new Congress takes office in the new year.
New details of accused UnitedHealthcare CEO shooter’s plan emerge
Newly unsealed court documents put into perspective what led up to the deadly shooting of UnitedHealthcare CEO Brian Thompson. A federal complaint shed light on 26-year-old Luigi Mangione’s “hostility toward the health insurance industry and wealthy executives in particular.”
In a notebook found on Mangione when he was arrested, he allegedly wrote of his plans to “wack” an insurance company CEO at its investor conference. Federal prosecutors said he traveled from Georgia to New York to stalk and kill Thompson.
Magione appeared in a New York courtroom Thursday, and four new federal charges were levied against him. The charges included murder with a firearm, which is an offense punishable by the death penalty.
The hearing followed Mangione’s extradition from Pennsylvania, where police arrested him on Dec. 9, to New York.
Armed guards surrounded Mangione as NYPD officers walked him off a helicopter upon his arrival in Manhattan. New York City Mayor Eric Adams joined the walk.
“Police Commissioner [Jessica] Tisch and I all want to send a very clear and loud message that this act of terrorism and the violence that stems from it is something that will not be tolerated in this city,” Adams told the press at the site of the helicopter arrival.
Mangione already faces state-level charges in New York. Manhattan District Attorney Alvin Bragg brought charges against him Tuesday, Dec. 17, including for murder as an act of terrorism.
However, Mangione also received a hero’s welcome from protesters outside the courthouse. Thompson’s killing sparked backlash against the health insurance industry and its coverage policies.
While judges have not set any dates yet, Mangione will face state-level charges first. A federal trial will follow.
New York abolished the death penalty, meaning it’s not an option for Mangione in the state-level case. However, the death penalty can still be exercised in the federal case.
FAA temporarily bans drones in parts of New York and New Jersey
Drones are now banned in parts of New York and New Jersey — at least for the time being. It comes amid an investigation into multiple mysterious sightings over the last month that set off fear and speculation.
In a statement, New York Gov. Kathy Hochul said the Federal Aviation Administration’s bans are “purely precautionary.” Meanwhile, the FAA’s restrictions in New Jersey are largely aimed at limiting drone flights over power stations and infrastructure.
The FAA implemented emergency flight restrictions across New Jersey, prohibiting drone operations until Jan. 17, 2025, for “special security reasons.” Unless operators obtain special government clearance, the directive bans uncrewed aircraft within a one-nautical-mile radius of designated areas and up to 400 feet in altitude.
The FAA designated areas such as Camden, Jersey City, Elizabeth and South Brunswick as “National Defense Airspace.”
Violators may face severe penalties, including interception, detention, certificate revocation and potential criminal charges. In extreme cases, authorities are authorized to use “deadly force” against drones posing an “imminent security threat.”
These restrictions follow a surge in unexplained drone sightings across New Jersey and nearby states that began in mid-November. Federal agencies, including the Federal Bureau of Investigation (FBI) and the Department of Defense (DOD), received over 5,000 reports of drone activity.
Dow Jones snaps worst losing streak in 50 years
The Dow Jones Industrial Average snapped its worst losing streak in 50 years Thursday. The losing streak lasted 10 days.
During the losing streak, the market wiped out all of its post-election gains. The Dow ended Wednesday down 2.5% from when Trump won the election.
Also on Wednesday, Wall Street’s fear gauge, the CBOE Volatility Index, had its second-biggest percentage spike in history. The VIX shot up 74% after the Federal Reserve shared its outlook for the coming year.
On Wednesday, the Fed cut its benchmark interest rate for a third time in 2024, which was widely predicted.
Feeling the holiday blues?
The holidays are often called “the most wonderful time of the year,” but the season can bring about sadness and stress for many. This -emotional shift, commonly known as the “holiday blues” or seasonal affective disorder (SAD), can affect millions of people across the country.
Licensed adult psychiatrist Dr. Patrice Mann said the holiday blues are due to several factors. They include social pressures, disruptive routines and financial strain.
“Things like having a bunch of holiday events on the calendar, not to say we don’t look forward to them oftentimes, but they take a toll on us,” says Dr. Mann. “You’re up late, interacting with a lot of people, and that’s not everyone’s nature.”
Grief and seasonal depression can also complicate these feelings. According to the National Institute of Mental Health, seasonal depression affects millions of Americans every year, but many may not even realize they have it.
Symptoms of holiday blues and seasonal depression can include a persistent low mood, loss of interest in activities and changes in eating or sleeping habits. If these symptoms last more than two weeks, Dr. Mann said it could indicate a more serious depressive episode. In such cases, seeking professional help is important.
Dr. Mann recommended several self-care strategies to help manage both the holiday blues and seasonal depression. She suggested getting tested for vitamin D deficiency and taking supplements during winter. Vitamin D plays a vital role in mood and energy levels.
She also advised getting as much sunlight as possible during the shorter winter days. Light therapy boxes can mimic outdoor sunlight if natural sunlight isn’t available. Using them for 20 to 30 minutes in the morning can help trick the brain and improve mood.
For those experiencing grief during the holidays, Dr. Mann encouraged reflecting on personal needs and communicating with trusted friends or family members. She also recommended incorporating new social activities into your routine and checking in with yourself after attending events.
For those supporting others through grief, it’s important to recognize that everyone processes emotions differently. Dr. Mann suggested engaging in activities with those less open about mental health, such as cooking or playing games, to help create a comfortable environment for them to express themselves.
While the holiday season brings unique challenges, small steps can make a big difference. Prioritizing self-care, maintaining routines and reaching out for support are important practices to help manage holiday stress.
If you or someone you know is struggling, remember that professional help is available. The National Suicide Hotline is available 24 hours a day by calling 988.
The poll is one of the clearest indicators yet of the backlash against the insurance industry that the killing has sparked. A plurality of young voters, 41%, found the killer’s actions acceptable, while 30-to-39-year-olds had the next highest rate at 23%.
Overall, 17% of voters say the killer’s actions were acceptable, compared to 68% who said they were unacceptable.
Police arrested 26-year-old suspect Luigi Mangione in Pennsylvania after a days-long manhunt. He now faces a murder charge in New York and other lesser charges in both New York and Pennsylvania.
Both before and after Mangione’s arrest, posters online lionized the suspect. They likened him to a folk hero and made light of the killing.
Other polls find the reaction comes as people are developing less favorable views of the healthcare system and more favorable views of violence.
A Gallup poll published earlier this month found Americans’ approval of the healthcare system fell to the lowest level in the 21st century.
Similarly, last year, a survey by the Public Religion Research Institute found that nearly a quarter of Americans agreed with the idea that violence may be necessary to save the United States.
Mangione supporters raise tens of thousands of dollars for legal defense
Supporters of Luigi Mangione, the suspect in the killing of UnitedHealthcare CEO Brian Thompson, are raising tens of thousands of dollars to fund his legal defense. The development is adding to fears among law enforcement that Mangione is being turned into a “martyr” amid rising threats against other CEOs in the wake of Thompson’s murder.
Several online defense funds from anonymous users have popped up for Mangione. That includes one on the crowdfunding site GiveSendGo, which raised over $50,000 from nearly 1,500 donors as of Thursday, Dec. 12.
The defense fund has dubbed itself “The December 4th Legal Committee.” It’s an apparent reference to the day investigators say Mangione gunned down Thompson on the streets of Manhattan.
The fund’s organizer says they do not support violence but believes “in the constitutional right to fair legal representation.”
GiveSendGo told ABC News that it takes concerns about the fundraising campaign seriously but noted that it allows legal defense funds as it believes in “due process.”
Other crowdfunding websites, like GoFundMe, have taken down Mangione’s legal defense funding efforts. The company states that it bars “fundraisers for the legal defense of violent crimes.”
Mangione’s attorney reportedly said that while his client should be presumed innocent, he doesn’t feel comfortable accepting money from supporters.
Reddit is also taking action against users posting what investigators say is Mangione’s manifesto by removing or restricting links to the document.
While some users accused the platform of censorship, the company said it violates their violent content policy.
Although many praise Mangione’s alleged actions, Manhattan District Attorney Alvin Bragg called the support “deeply disturbing.”
Prosecutors in New York City are working to secure an indictment against Mangione, who is still in custody in Pennsylvania, where he was arrested at a McDonald’s in Altoona on Monday, Dec. 9.
Bill would force Big Health Care to sell pharmacies within 3 years
A group of bipartisan lawmakers introduced legislation that would force companies that own health insurers or pharmacy benefit managers to divest the pharmacies they own. Sens. Elizabeth Warren, D-Mass., and Josh Hawley, R-Mo., said they hope to end the “gross conflict of interest that enables these companies to enrich themselves at the expense of patients and independent pharmacies.”
Under this legislation, which is not likely to pass before the end of the session, it would be illegal to directly or indirectly own a pharmacy while owning either an insurance company or pharmacy benefit manager, known as a PBM. Companies that do would have three years to sell off the pharmacy business.
The bill, which targets the biggest health care companies in the world, is called the Patients Before Monopolies Act, or PBM Act.
“It’s a middleman between a drug manufacturer and the pharmacy, and ultimately to the patient who needs the medication,” said Wendell Potter, a former Cigna insurance executive. “And insurance companies used to just hire them or use them to access the medicines and be their consultant.”
But now, major insurance companies own the PBMs.
Earlier this year, the Federal Trade Commission released an interim report on PBMs’ effect on prescription drug prices. That report found the top three PBMs, all owned by health insurance companies, control around 80% of prescription drug claims for 270 million people.
“PBMs have manipulated the market to enrich themselves — hiking up drug costs, cheating employers, and driving small pharmacies out of business,” Warren said in a statement.
“This legislation will stop the insurance companies and PBMs from gobbling up even more of American health care and charging American families more and more for less,” Hawley added.
The industry pushed back against the assertions from the senators.
“This proposed legislation would severely limit access to safe and affordable pharmacies that patients value and rely on for prescription drugs,” a PBM trade group, Pharmaceutical Care Management Association, said in a statement. “The truth is PBM-affiliated pharmacies, including mail-service and specialty pharmacies, have a proven track record of providing convenient, reliable, and affordable options for patients to access prescription drugs.”
In a survey commissioned by PCMA, 90% of responding employers “expressed satisfaction with their PBMs’ clarity and transparency of contract terms,” while 88% “expressed satisfaction with their PBMs’ ability to provide the lowest costs for employees at the pharmacy counter.”
Consolidation in the industry put a lot of power in the hands of PBMs, according to Potter.
CVS bought pharmacy benefits manager Caremark in 2007 for nearly $21 billion. It also owns health insurer Aetna.
Meanwhile, insurer UnitedHealth Group owns Optum, which has the PBM OptumRX.
All three of these companies offer mail-in pharmacy products, and CVS has nearly 10,000 physical locations.
“These companies ultimately saw that there would be a way for them to make excess profits by owning these pharmacy benefit managers,” said Potter, who is now president of the Center for Health and Democracy. “So Cigna’s now more apt to be described as a PBM or pharmacy benefit manager that also happens to own health insurance plans or operate health insurance plans. It’s an entirely different company.”
“I started practicing pharmacy way back in 1980 and PBMs really started out as being nothing but processing,” Rep. Buddy Carter, R-Ga., told Straight Arrow News. “They just process claims. And all of a sudden, formularies became very prevalent, in hospital settings and in other ways, and insurance companies began to understand that they could influence the price of a medication by including them on their primary, on their formulary.”
Formularies are lists of prescription drugs covered by an insurance plan.
“You have patient steering, where the PBMs, the insurance companies, are steering their patients toward their pharmacy, and they reimburse their pharmacies more than they reimburse independent retail pharmacies,” Carter said. “Secondly, you know, there are oftentimes when the independent retail pharmacy can’t even participate, can’t even service the patient.”
Carter said there are many cases where pharmacies are reimbursed less by insurance than the drug costs. Because of issues making ends meet, hundreds of independent retail pharmacies are closing every year.
Meanwhile, major health care companies are gobbling up independent pharmacies, only to close down hundreds of stores a year themselves.
Healthcare execs ‘wanted’ posters pop up in NYC after Thompson’s murder
Following the murder of UnitedHealthcare CEO Brian Thompson last week, “wanted” posters for health care and financial executives are now reportedly popping up around New York City. The New York Police Department (NYPD) announced Tuesday, Dec. 10, that it is investigating these threatening images.
The posters include pictures of insurance leaders and Thompson with a red “x” crossing his image out. It’s the latest in a series of incidents sparking fear among business leaders in the wake of Thompson’s fatal shooting on Wednesday, Dec. 4.
The NYPD says it knows of a wave of online threats against executives.
Luigi Mangione, 26, is charged with Thompson’s murder in New York City. Police said they found him with a manifesto condemning what he saw as insurance companies choosing profits over people. Mangione reportedly wrote, “These parasites simply had it coming.”
New York authorities say they’re on the lookout for extremists who may see “Mangione as a martyr” and person to imitate.
Following the shooting of Thompson, social media praise for Mangione has skyrocketed. Many online have called him a “hero,” and others suggested the incident could spark a discussion about healthcare policy in the United States.
In a bulletin on Tuesday, Dec. 10, New York police warned against social media posts in support of Thompson’s killing and said support for Mangione may represent a heightened threat level for high-profile executives.
