The Federal Trade Commission (FTC) is preparing to sue three major U.S. health companies over their roles as intermediaries in negotiating medication prices, including insulin. The agency argues that their practices inflate costs for patients.
The lawsuits are expected to target the three largest pharmacy benefit managers (PBMs): UnitedHealth Group’s Optum Rx, CVS Health’s Caremark, and Cigna’s Express Scripts. All three are connected to health insurers.
The focus of the lawsuits will be on the business practices related to the rebates that PBMs negotiate with drug manufacturers. These rebates, the FTC argues, contribute to higher drug prices for patients.
A spokesperson for CVS Caremark stated, “We are proud of the work we have done to make insulin more affordable for all Americans with diabetes, and we stand by our record of protecting American businesses, unions, and patients from rising prescription drug prices.”
An Express Scripts spokesperson commented, “The prices of insulin and other medicines are set by their manufacturers, who have raised list prices repeatedly. Express Scripts works to combat the pharmaceutical industry’s high prices and lower the cost of thousands of medicines for patients and their health plans, and the data shows that we succeed.”
A spokesperson for Optum Rx did not immediately respond to a request for comment. The FTC also declined to comment on the reported lawsuits.
Pharmacy benefit managers are central figures in the U.S. drug supply chain. They negotiate rebates with drug manufacturers on behalf of insurers and large employers, create lists of medications covered by insurance, and reimburse pharmacies for prescriptions.
The FTC has been investigating PBMs since 2022, focusing on insulin prices among other issues. The investigation also includes drug manufacturers, but it is unclear whether they will be named in the upcoming lawsuits. Eli Lilly, Sanofi, and Novo Nordisk, which control roughly 90% of the U.S. insulin market, are among the companies scrutinized.
On Tuesday, the FTC released an interim report from its ongoing investigation into PBMs. The report accused the largest PBMs of manipulating the drug supply chain to enrich themselves at the expense of smaller, independent pharmacies and U.S. patients. According to the report, six of the largest PBMs handle nearly 95% of the prescriptions filled in the U.S.
PBMs argue that manufacturers are responsible for high drug prices, while drugmakers claim that the rebates and fees collected by PBMs force them to increase list prices.
The Biden administration and Congress have increased pressure on PBMs to enhance transparency in their operations as many Americans struggle to afford prescription drugs. According to a White House fact sheet, Americans pay two to three times more for prescription drugs than patients in other developed nations.
President Joe Biden’s Inflation Reduction Act has capped insulin prices for Medicare beneficiaries at $35 per month. However, this policy does not extend to patients with private insurance.
