FTC Sues Pharmacy Middlemen For Allegedly Inflating Insulin Prices
by Ty Roush · ForbesTopline
The Federal Trade Commission on Friday sued three of the largest pharmacy benefit managers alleging the companies—which manage about 80% of prescriptions in the U.S.—have driven up the price of insulin, months after the agency released findings from an investigation detailing the firms’ business practices.
Key Facts
UnitedHealth Group’s Optum Rx, CVS Health’s Caremark and Cigna’s Express Scripts have created a “perverse” drug rebate system that has “artificially inflated” the price of insulin, the FTC alleges.
The FTC claims the three pharmacy benefit managers, or companies responsible for negotiating the terms and conditions for access to prescription drugs, excluded lower-priced insulin in favor of higher-priced options and forced “patients to pay more for life-saving medication.”
A report released by the FTC in July claimed the three companies relied on various tactics to have customers choose certain medications over others, including ranking them on lists or formularies, a list of drugs provided by health insurance providers.
Neither Optum Rx, Caremark nor Express Scripts immediately responded to requests for comment from Forbes.
Get Forbes Breaking News Text Alerts: We’re launching text message alerts so you'll always know the biggest stories shaping the day’s headlines. Text “Alerts” to (201) 335-0739 or sign up here.
Big Number
30%. That’s the percentage of Americans who have reported rationing or skipping doses of their prescriptions because of rising costs, according to the FTC.
Tangent
Express Scripts filed a lawsuit against the FTC earlier this week demanding the agency retract its July report, which the company said was “unfair, biased, erroneous and defamatory.” According to the lawsuit, Express Scripts claims the FTC “disregarded” documents and data provided by the companies and instead focused on “unverified comments” from their competitors.
Key Background
Pharmacy benefit managers have drawn criticism from FTC officials for years for their alleged involvement in increased prescription prices. The agency opened an investigation into six companies in 2022, requesting the firms turn over records and information about their business practices. Lina Khan, the FTC’s chair, has referred to pharmacy benefit managers as “dominant gatekeepers” that have “price gouged” Americans for medications. Pharmacy benefit managers face litigation elsewhere for their business practices, and Ohio Attorney General David Yost filed a lawsuit against several companies—including Express Scripts—last year, alleging they illegally drove up drug prices. Apart from pharmacy benefit managers, the FTC says Eli Lilly, Sanofi and Novo Nordisk have control over the insulin market, and all three companies may face future action from the agency and should be “on notice.”