FTC sues drug middlemen over insulin prices, puts others on notice
The Federal Trade Commission (FTC) has filed a lawsuit against the three large pharmacy benefit managers (PBMs) in the United States—CVS Health’s Caremark Rx, Cigna’s Express Scripts and United Health Group’s OptumRx—for “anticompetitive and unfair” practices that have “artificially inflated” insulin prices.
The lawsuit also targets each PBM’s affiliated group purchasing organization: Zinc Health Services for Caremark Rx, Ascent Health Services for Express Scripts and Emisar Pharma Services for OptumRx.
According to the FTC’s complaint, these groups, which administer approximately 80% of all U.S. prescriptions, have “abused their economic power” and altered the supply chain in a way that is “forcing patients to pay more for life-saving medication.” The FTC alleges that even when insulin prices drop in a way that should benefit patients, the PBMs work to exclude those options in favor of products associated with higher prices and higher rebates. This has helped the groups “line their pockets” and forced patients who require insulin to pay higher out-of-pocket costs, the agency claims.
“Millions of Americans with diabetes need insulin to survive, yet for many of these vulnerable patients, their insulin drug costs have skyrocketed over the past decade thanks in part to powerful PBMs and their greed,” Rahul Rao, deputy director of the FTC’s Bureau of Competition, said in a statement. “Caremark, ESI, and Optum—as medication gatekeepers—have extracted millions of dollars off the backs of patients who need life-saving medications. The FTC’s administrative action seeks to put an end to the Big Three PBMs’ exploitative conduct and marks an important step in fixing a broken system—a fix that could ripple beyond the insulin market and restore healthy competition to drive down drug prices for consumers.”
In its statement, the FTC tracked U.S. insulin prices over the years. In 1999, for example, the average list price for a brand-name insulin from Eli Lilly was $21. By 2017, however, the list price for that same medication jumped all the way to $274.
In a separate statement posted on the FTC website, Rao noted that the agency is also paying close attention to the role insulin manufacturers such as Eli Lilly, Sanofi and Novo Nordisk have played in this trend.
“Although not named in this case, all drug manufacturers should be on notice that their participation in the type of conduct challenged here can raise serious concerns, with a potential for significant consumer harm, and that the Bureau of Competition reserves the right to recommend naming drug manufacturers as defendants in any future enforcement actions over similar conduct,” Rao said.
The latest step in an ongoing battle between the FTC and PBMs
This lawsuit represents the most recent chapter of an already combative feud between the FTC and PBMs. On Sept. 17, for instance, Express Scripts filed its own lawsuit against the FTC, demanding that the agency remove a report that Express Scripts believed to be filled with “false and misleading claims about the PBM industry.”
“We don't take this step lightly, but as advocates working to lower drug prices for millions of Americans and the employers, labor unions, and government agencies that provide their prescription drug benefits, we cannot let the FTC's unlawful actions and false information stand,” Andrea Nelson, chief legal officer for The Cigna Group, said in a statement.
The FTC report in question, published in July, was 73 pages long and included a long list of grievances related to how PBMs in the United States function. Again, rising insulin prices were a primary concern of the report.
Michael has more than 18 years of experience as a professional writer and editor. He has written at length about cardiology, radiology, artificial intelligence and other key healthcare topics.