The FTC’s Latest PBM Report Confirms What We’ve Known All Along

The Federal Trade Commission (FTC) recently released its second interim report on Pharmacy Benefit Managers (PBMs), digging deeper into troubling practices that many employers may not fully realize are inflating their healthcare costs. The report alleges that the largest PBMs—CVS Caremark, Express Scripts, and OptumRx—control drug pricing in ways that often prioritize their own profits over employer and patient savings.

At SmithRx, we’ve seen firsthand how these practices impact businesses and their employees. While it’s encouraging to see regulators shine a light on these issues, employers don’t have to wait for change—they have the power to act now. A transparent, accountable PBM model already exists, and switching to one can bring immediate savings and clarity to pharmacy benefits.

Key Legacy PBM Findings from the FTC Report

The FTC’s report highlights several concerning practices by the nation’s largest PBMs, often referred to as the “Big 3.” Among the most striking findings:

Excessive Markups on Specialty Drugs

The report indicates that PBMs have significantly inflated the prices of specialty generic drugs, sometimes by more than 1,000%. These excessive markups appear to have led to billions in additional costs for health plans and employers.

Preferential Treatment of Affiliated Pharmacies

The report raises concerns that legacy PBMs have disproportionately steered prescriptions to their own affiliated pharmacies while reimbursing independent pharmacies at lower rates. This practice may stifle competition and limit patient choice.

Significant Revenue from Spread Pricing

The report describes how PBMs charged health plans far more than they reimbursed pharmacies for the same medications, potentially pocketing the difference as additional profit.

Lack of Transparency for Employers

Many plan sponsors may not have been fully aware of how their PBMs structured drug pricing through opaque contracts and hidden fees, ultimately increasing costs.

Government Action Is Welcome—But Change Can’t Wait

The FTC’s findings underscore the urgent need for greater transparency and fairness in drug pricing. While we applaud efforts to hold legacy PBMs accountable, regulatory action takes time. Employers, health plans, and benefits administrators don’t have to wait years for reform—they can take control of their pharmacy benefits today.

At SmithRx, we have been pioneering a different approach for nearly a decade. Our commitment to transparency means:

• No Hidden Markups: We pass through 100% of drug rebates and savings to our clients, ensuring fair pricing.
• Fair and Equitable Reimbursement: We do not prioritize affiliated pharmacies over independent ones, giving patients true freedom of choice.
• Clear and Honest Pricing: Employers know exactly what they are paying for, with full visibility into cost structures.

Employers Have a Choice in PBMs

The FTC’s report confirms what many employers and benefits professionals have suspected: the traditional PBM model is not working in their best interest. But the good news is that alternatives exist. Forward-thinking organizations are already making the switch to transparent, high-integrity PBMs that put patients and plan sponsors first.

If you’re tired of waiting for policymakers to fix the system, SmithRx is here to help you take action today. Contact us to learn how we can transform your pharmacy benefits with a model built on transparency, savings, and trust.