Patients Pay The Price As Drug Middlemen Profit, Says FTC Report. Mark Cuban's Take: 'Anyone Surprised By This?'

The Federal Trade Commission (FTC) just released an interim report showing how pharmacy benefit managers (PBMs) "profit at the expense of patients by inflating drug costs and squeezing Main Street pharmacies." 

According to the FTC, these middlemen, who handle prescription drug benefits for health insurers, employers, and others, are raising drug prices and putting pressure on independent pharmacies.

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The report shows that six big companies handle almost 90% of all prescriptions in the U.S. Because they have so much control, they can set high drug prices, making it hard for patients to afford their medicines. As a result, nearly 30% of Americans have reported skipping doses or rationing their medications.

The FTC Chair, Lina M. Khan, said about the report that it "Details how PBMs can squeeze independent pharmacies that many Americans — especially those in rural communities — depend on for essential care. The FTC will continue using all our tools and authorities to scrutinize dominant players across health care markets and ensure Americans can access affordable health care."

Mark Cuban, billionaire entrepreneur and owner of the Dallas Mavericks, quickly responded to the FTC’s discoveries. In a tweet, he voiced his lack of surprise:

"Anyone surprised by this? Please share with every CEO, CFO, and HR person you know. If you are a shareholder or Wall Street analyst, ask your portfolio companies who their PBM is, not if they are being ripped off, but how badly. This should be a question in every quarterly earnings call. ‘How much can you add to the bottom line by changing to a pass-through PBM?’"

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The FTC’s investigation started in 2022 and targeted the biggest PBMs, such as Caremark Rx, Express Scripts, and OptumRx. The report shows that the top three PBMs handled almost 80% of the 6.6 billion prescriptions filled in 2023, while the top six PBMs processed more than 90%. Because these big companies have merged and integrated so much, they now have a lot of control over whether Americans can get and afford their prescription drugs, according to the report.

Additionally, they say that PBMs tend to favor their pharmacies, which can drive up drug costs for patients. Independent pharmacies are stuck with unclear and harmful contract terms, making it hard for them to compete. PBMs and drug manufacturers sometimes exclude cheaper generic drugs in favor of higher rebates from brand-name drugs.

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Mark Cuban’s Interest

In January 2022, Mark Cuban started his own pharmacy, the Mark Cuban Cost Plus Drug Company. His pharmacy’s goal is to provide affordable medications by eliminating middlemen like pharmacy benefit managers (PBMs) and offering drugs at a lower, transparent price.

Knowing his background, it’s no wonder he’s so interested in this FTC report. His pharmacy’s mission is to make drugs more affordable, and he wants to bring attention to these unfair practices and encourage businesses and investors to ask tough questions about how PBMs are affecting drug costs.

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