UnitedHealth Group, the healthcare giant recently under scrutiny following the tragic death of UnitedHealthcare CEO Brian Thompson, is embroiled in a fresh controversy. A newly released Federal Trade Commission (FTC) report alleges that the company, alongside other major pharmacy benefit managers (PBMs), imposed staggering markups on essential medications, with some prices exceeding 1,000%.
Soaring Drug Costs Spark Outrage
The FTC report highlights that UnitedHealth’s pharmacy subsidiary, OptumRx, along with CVS’s Caremark Rx and Express Scripts, drastically inflated the prices of specialty generic drugs. These medications, critical for treating conditions like cancer and HIV, were reportedly marked up to several times their acquisition costs.
Drugs such as Imatinib, a leukemia treatment, and Lamivudine, used for HIV patients, were among those impacted. For instance, Lamivudine was priced nearly four times higher than its acquisition cost, making it increasingly unaffordable for many Americans.
FTC Chair Lina M. Khan expressed alarm at these findings, emphasizing the urgent need for intervention. “The FTC staff’s report reveals the Big 3 PBMs hiked costs on lifesaving drugs, including heart disease and cancer medications. These practices inflate costs, strain independent pharmacies, and deny Americans access to affordable healthcare,” Khan stated.
The Growing Impact of PBM Practices
The new report builds on findings from a 2024 FTC investigation, which showed that PBMs accounted for 68% of dispensing revenue from specialty drugs in 2023, up from 54% in 2016. This growing dominance in the market has raised concerns about monopolistic practices and unchecked price inflation.
Hannah Garden-Monheit, Director of the FTC’s Office of Policy Planning, underscored the report’s urgency, stating, “These exorbitant markups are growing at an alarming rate. Policymakers need to address this issue swiftly to protect consumers.”
Pushback From PBMs
Following the FTC’s revelations, UnitedHealth and CVS refuted the allegations. UnitedHealth claimed it had helped patients save $1.3 billion on prescription costs, with an average out-of-pocket payment of just $5. “Optum is lowering the cost of specialty medications and providing clinical expertise for patients with rare conditions,” the company stated.
CVS also dismissed the report, accusing the FTC of cherry-picking data to create a biased narrative. “The anti-PBM policies the FTC is pursuing will only increase drug costs for American patients,” CVS argued, adding that out-of-pocket expenses for consumers have decreased by 29% since 2016.
UnitedHealth’s Resilient Financial Performance
Despite the controversy, UnitedHealth Group reported robust profits in 2024, earning $14.4 billion, including $5.5 billion in the fourth quarter. The company has revised its 2025 forecast, projecting revenue of up to $455 billion, surpassing previous estimates. However, challenges remain, particularly concerning Medicaid contracts, which analysts say could pressure margins.
A Troubled Year for UnitedHealth
The latest allegations come on the heels of a difficult year for UnitedHealth. In December 2024, UnitedHealthcare CEO Brian Thompson was fatally shot outside a New York City hotel. The murder drew national attention and added to the company’s turbulent year, marked by cyberattacks and rising medical costs.
Jaja has a degree in journalism and took classes in international law and business communication. Her career spans roles at prominent international media outlets, including International Business Times, Celebeat and Delightful Philippines. As a news editor, Jaja covered a wide range of beats, including legal, business, economy, cryptocurrency, personal finance, gaming, technology, and entertainment.