NEW YORK, July 9 (Xinhua) -- The U.S. Federal Trade Commission (FTC) on Tuesday sharply jabbed pharmacy benefit managers, saying in a 71-page report that "these powerful middlemen may be profiting by inflating drug costs and squeezing Main Street pharmacies."

The FTC's report detailed an array of ways that benefit managers appeared to be inflating the cost of prescription drugs. For example, it pointed to an important line of business -- the companies' affiliated pharmacies, including warehouse-based operations that send prescriptions through the mail to patients.

The agency examined two generic cancer drugs and found that benefit managers often paid their own pharmacies much more than it would cost to buy those drugs from a wholesaler. The practice translated into nearly 1.6 billion U.S. dollars in revenue over less than three years for the biggest three conglomerates, according to the report.

The three largest benefit managers -- CVS Health's Caremark, Cigna's Express Scripts and UnitedHealth Group's Optum Rx -- collectively process roughly 80 percent of prescriptions in the United States.

Hired by employers and government health insurance programs like Medicare, U.S. benefit managers are responsible for negotiating prices with drug makers, paying pharmacies and helping decide which drugs are available and at what cost to patients.

"Benefit managers are supposed to save everyone money. But in recent years, the industry has grown more consolidated and has taken more control over how patients get their medicines, in a shift that critics say contributes to driving up drug costs," said The New York Times (NYT) in an article about the report.

Benefit managers defend their business practices, saying they save money for employers, governments and patients. They say that their scale gives them crucial leverage to take on the real culprit of high drug prices, pharmaceutical companies. And they say they are simply being frugal with their clients' money when they pay outside pharmacies low rates to reimburse them for buying and dispensing medications.

"The regulator's study signals a significant ramping up of its scrutiny of benefit managers under the agency's chair, Lina Khan," said NYT. "It represents a remarkable turnabout for an agency that has long taken a hands-off approach to policing these companies."

In a statement on Tuesday, Khan said the agency's inquiry had shown "how dominant pharmacy benefit managers can hike the cost of drugs, including overcharging patients for cancer drugs." She went on to say that the agency found evidence of "how benefit managers can squeeze independent pharmacies that many Americans -- especially those in rural communities -- depend on for essential care."

The FTC has so far stopped short of bringing a lawsuit or other enforcement action against a benefit manager. But the industry fears that the report could lead to a formal investigation into its practices or to a lawsuit accusing benefit managers of anticompetitive conduct. The agency's findings could also fuel legislative efforts in Congress and in the states to impose limits on the industry.