Pharmacy benefit managers accused of inflating specialty drug prices

(The Center Square) – Pharmacy benefit managers have been in the spotlight of late and that attention continued Wednesday during an Illinois House Health Care Committee hearing.

A recent Federal Trade Commission report found that Pharmacy benefit managers (PBMs), which act as middlemen in the industry, inflate costs and pressure independently owned pharmacies.

"The FTC's interim report lays out how dominant pharmacy benefit managers can hike the cost of drugs – including overcharging patients for cancer drugs," FTC Chair Lina Khan said in a statement. "The report also details how PBMs can squeeze independent pharmacies that many Americans – especially those in rural communities – depend on for essential care."

David Baggett, a pharmacist in central Illinois, testified that PBMs are destroying the pharmacy industry.

“Practices of pharmacy benefit managers are severely harming community pharmacies, and in many cases, jeopardizing access to essential medications for many people in Illinois,” said Baggett. “It’s not only independent pharmacies that are struggling, major chains are also affected. It’s a nationwide problem.”

Corbin McGee with the National Multiple Sclerosis Society said the median price for M.S. therapy drugs is $107,000.

“It was spoken earlier that PBMs’ job is to keep prices low for individuals, but we are not seeing that,” said McGee. “People throughout the state living with M.S. are not seeing the price of their medications go down, it’s the exact opposite.”

Vic Perini, vice president of the specialty pharmacy Accredo, said PBMs don’t set the price of drugs, drug manufacturers do.

“In 2023, the median annual price for a new drug was $300,000, up 35%,” said Perini.

Pharmacists have urged Illinois lawmakers to enact legislation banning certain drug pricing practices by PBMs, which they said hurt local pharmacies.

Over 40% of local pharmacies in Illinois have shut down in the past decade.