The Federal Trade Commission (FTC) released a 60-page report Tuesday targeting the three biggest pharmacy benefit managers (PBMs), claiming the companies hiked the prices of specialty drugs by thousands of percent to generate $7.3 billion in revenue, collectively, from 2017 to 2022.

This is the FTC's second interim report on the industry, which it has accused of excessive profits and contributing to higher overall healthcare costs through significant market control in the US.

The PBMs are UnitedHealth Group's Optum RX (UNH), CVS's Caremark (CVS), and Cigna's Express Scripts (CI). 

“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,” said FTC Chair Lina Khan in a statement Tuesday. 

Khan added that the FTC should continue investigating the PBMs and "should act swiftly to stop any illegal conduct."

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Hannah Garden-Monheit, director of the FTC’s Office of Policy Planning, said that the problem of price hikes on specialty drugs is "growing at an alarming rate, which means there is an urgent need for policymakers to address it.”

For commercial plans, like the ones used by employers, the markups were higher, the FTC report found.

"While the extent to which plan sponsor clients [employers] of the Big 3 PBMs are aware of these practices is beyond the scope of our study, there is some evidence that at least some plan sponsors have not appreciate the extent to which they are paying high markups on various [specialty] generic drugs," FTC staff wrote in the report.

The higher markups mean more money is being transferred internally within the verticals of these larger companies. The three PBMs all belong to companies that also have insurance plans, and some also have pharmacies. That means higher prices contribute to the companies' profits, the FTC said.

These practices have also impacted independent pharmacies, which allege they are being squeezed unfairly on the drugs they dispense and, in some cases, are in the red from the low reimbursement rates.

The FTC concluded in the latest report that specialty generic drugs represent "a growing profit center" for the "Big Three" PBMs and that it will weigh whether any of the practices uncovered in the report violate any laws.

The FTC also called for legislative reforms and "is encouraged to see bipartisan interest in Congress and among the states in addressing PBM practices," according to the report.

Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee on social media platforms X, LinkedIn, and Bluesky @AnjKhem.

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