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Federal Trade Commission sues largest drug middlemen for allegedly inflating insulin prices

Reporter: Tami Luhby, CNN


The Federal Trade Commission took action Friday against the three largest pharmacy benefit managers, accusing the companies of artificially inflating insulin list prices that resulted in patients paying more for the medications.


The agency alleges that CVS Health’s Caremark Rx, Cigna’s Express Scripts and UnitedHealth Group’s Optum Rx and their affiliated group purchasing organizations created a system that prioritizes high rebates from drug manufacturers, leading to artificially high insulin list prices. The companies, known as PBMs, excluded available insulin products with lower prices — that could have been more affordable for patients — in favor of higher-priced insulins that provided higher rebates.



PBMs make money through rebates and fees, which are negotiated with drug manufacturers and are tied to a drug’s list price. Insulin products with higher list prices result in higher rebates and fees for the PBMs, the complaint alleges.


“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.”


The Cigna Group’s chief legal officer, Andrea Nelson, said the agency’s action “continues a troubling pattern from the FTC of unsubstantiated and ideologically-driven attacks on pharmacy benefit managers,” and that Express Scripts would defend itself... Continue Reading



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