"FTC Charges Three Pharmaceutical Middlemen with Driving Up Insulin Prices"

 

The Federal Trade Commission (FTC) has filed a lawsuit against three of the largest pharmacy benefit managers (PBMs) — Optum Rx (UnitedHealth Group), Caremark (CVS Health), and Express Scripts (Cigna) — accusing them of inflating insulin prices through anticompetitive practices. The PBMs, which collectively manage around 80% of prescription drug plans in the U.S., allegedly engaged in rebate schemes that resulted in artificially high insulin prices, negatively impacting millions of diabetic patients who depend on the medication.

The FTC's complaint claims that these PBMs prioritized higher rebates from drug manufacturers, leading to inflated list prices for insulin. As a result, patients are forced to bear higher out-of-pocket costs, while the PBMs and their health plan partners benefit financially from the rebates. The suit also includes the PBMs' group purchasing organizations: Zinc Health Services, Ascent Health Services, and Emisar Pharma Services.

The agency highlighted the rising cost of insulin over the years, citing Humalog as an example. Once priced at $21 in 1999, Humalog’s price skyrocketed to $274 by 2017, driven in part by these PBM practices. FTC officials emphasized the impact on diabetic patients, who often struggle to afford their life-saving medications.

In response, CVS Caremark and Cigna both denied the allegations. CVS Caremark stated that they have worked to lower insulin costs through programs like ReducedRx, which offers insulin for as low as $25 for both insured and uninsured patients. Cigna, meanwhile, criticized the FTC for not understanding the drug pricing system, accusing the agency of trying to score political points.

The lawsuit follows broader criticism of PBMs from lawmakers, who have accused them of contributing to rising drug prices. The FTC's move has gained support from organizations like the National Community Pharmacists Association, which condemned PBMs for manipulating rebate systems that favor higher-cost drugs at the expense of patients, employers, and taxpayers.

The FTC’s action is part of a larger effort to hold both PBMs and drug manufacturers accountable for driving up healthcare costs. While the lawsuit primarily targets the PBMs, the FTC has also warned drugmakers like Eli Lilly and Novo Nordisk that they could face similar legal challenges in the future.