The $7.3 billion middleman.

Three companies decide what most Americans pay at the pharmacy counter. CVS Caremark, Express Scripts and Optum Rx — the "big three" pharmacy benefit managers, the middlemen who negotiate drug prices between insurers, manufacturers and pharmacies — processed roughly 80% of US prescription claims in 2025.¹ They are also, through their parent companies, among the largest pharmacy operators in the country. They negotiate the price, and then they collect it.

In January 2025 the Federal Trade Commission published its second interim staff report on the industry, built on the PBMs' own internal documents. The headline finding: the big three marked up numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent over their estimated acquisition cost — and many more by hundreds of percent.²

The sums are not rounding errors. The FTC staff counted more than $7.3 billion in dispensing revenue above estimated acquisition cost on specialty generics between 2017 and 2022, growing at 42% a year through 2021. Ten drugs accounted for $6.2 billion of it. A further $1.4 billion came from spread pricing — billing the health plan more than the pharmacy was paid, and keeping the difference.²

And the markups flowed disproportionately to the PBMs' own storefronts: 72% of the specialty generic prescriptions marked up by more than $1,000 were dispensed by pharmacies the big three themselves own.²

The counter-evidence is a price list.

The strongest argument against this system is not an editorial. It is a spreadsheet published in Dallas. Mark Cuban Cost Plus Drug Company lists its actual acquisition cost for every drug it sells, then adds a fixed 15% markup, a flat pharmacy fee and shipping.³ Because the entire price is public, every gap between that number and what an insured patient pays somewhere else is measurable.

Researchers have been measuring. A Brigham and Women's Hospital team calculated in Annals of Internal Medicine that Medicare could have saved up to $3.6 billion — 37% of its spending — on 77 of 89 studied generic drugs in a single year had it paid Cost Plus prices.⁴ A follow-up in the Journal of Clinical Oncology put the projected saving on just seven generic cancer drugs at $661.8 million a year, or 78.8% of Medicare's spending on them.⁵ A University of Pennsylvania analysis of 62 million commercial claims found that for prescriptions costing patients $100 or more out of pocket, the same drug averaged about $25 at Cost Plus against roughly $140 through employer insurance.⁶

Wholesalers and PBMs are "costing everybody hundreds of billions of dollars." Mark Cuban · HLTH conference keynote · October 2025 7

Cuban's own description of the rebate system is blunter than the FTC's: middlemen sign contracts promising to pass through 100% of manufacturer rebates, then route purchases through their own subsidiaries, which retain the margin the contract never mentions.⁸ The pass-through is real. So is the money that never passes through.

US retail prescription drug spending reached $467 billion in 2024.⁹ The gap documented in this briefing — between what drugs cost to acquire and what the system charges for them — is the subject of this publication. The index on our front page tracks it, drug by drug.