FTC second interim staff report finds PBMs charge significant markups and other notes from around the interweb:

• FTC Second Interim Staff Report Finds PBMs Charge Significant Markups. The Federal Trade Commission today published a second interim staff report on the prescription drug middleman industry, which focuses on pharmacy benefit managers’ (PBMs) influence over specialty generic drugs, including significant price markups by PBMs for cancer, HIV, and a variety of other critical drugs. Staff’s latest report found that the ‘Big 3 PBMs’—Caremark Rx, LLC (CVS), Express Scripts, Inc. (ESI), and OptumRx, Inc. (OptumRx)—marked up numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent, and many others by hundreds of percent. 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 2017-2022.

• Medicare Coverage of Anti-Obesity Medications? The proposed reinterpretation of Medicare Part D coverage of anti-obesity medications may provide approximately 3.4 million Medicare beneficiaries who have obesity with access to these innovative therapies. Medicare coverage would reduce out-of-pocket costs for these prescription drugs by as much as 95 percent for some enrollees. Approximately four million adult Medicaid enrollees may also gain new access to these medications.

• Pharmacy Benefit Manager uses unallowable pricing model. Spread pricing occurs when a managed care organization (MCO) reimburses its pharmacy benefit manager (PBM) for a prescription at a higher rate than what the PBM pays the pharmacy. This discrepancy, representing the prescription cost, is prohibited under Medicaid rules. Medicaid mandates that MCOs reimburse PBMs only for the actual prescription cost while also paying a separate administrative fee to the PBM for managing the program.

• How a Duty To Spend Wisely on Worker Benefits Could Loosen PBMs’ Grip on Drug Prices. Ann Lewandowski knows all about pharmacy benefit managers, or PBMs, the companies that shape the U.S. drug market. Her job, as a policy advocate at drugmaker Johnson & Johnson, was to tell patient and physician groups about the PBMs’ role in high drug prices. Armed with that knowledge, Lewandowski filed a potentially groundbreaking lawsuit in February. Rather than targeting the PBMs, however, she went after a big company that uses one — her own employer, Johnson & Johnson. Lewandowski charges in her lawsuit that by contracting with the PBM Express Scripts, which is part of the insurance giant Cigna, Johnson & Johnson — which fired her in April — failed in its duty to ensure reasonable drug prices for its more than 50,000 U.S. employees.

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