The Federal Trade Commission is making moves to take legal action against three major U.S. healthcare companies for their practices as middlemen who negotiate prices for essential medications like insulin. According to a source familiar with the matter, the agency contends that these practices are artificially inflating costs for patients.
The Targeted Companies
The three primary pharmacy benefit managers (PBMs) in the spotlight are UnitedHealth Group’s Optum Rx, CVS Health’s Caremark, and Cigna’s Express Scripts. These giants, all affiliated with health insurers, allegedly engage in questionable business practices related to rebates they broker with drug manufacturers. The focus of the impending lawsuits will be on these aspects, as per reports.
While the targeted companies haven’t responded directly to the news of the impending lawsuits, statements from representatives of CVS Caremark and Express Scripts suggest they are prepared to defend their practices. CVS Caremark claims to have made insulin more affordable for all diabetes patients while protecting against rising drug prices. Express Scripts asserts that drug prices are set by manufacturers, indicating that they work to combat industry-wide high prices.
The FTC has been actively looking into PBMs since 2022 and recently released an interim report blasting the top three PBMs for allegedly manipulating the drug supply chain to benefit themselves at the expense of smaller pharmacies and patients. The investigation into insulin pricing also involves scrutiny of drug manufacturers, particularly the major players controlling the U.S. insulin market.
The ongoing pressure from the Biden administration and Congress on PBMs aims to bring more transparency to their operations, particularly concerning the impact on the affordability of prescription drugs for Americans. Despite efforts such as capping insulin prices for Medicare beneficiaries, challenges remain for patients with private insurance.
As the healthcare industry faces increasing scrutiny over drug pricing practices, the actions of the Federal Trade Commission against major players like PBMs indicate a growing push for accountability and transparency. Patients and smaller pharmacies stand to benefit from greater oversight and regulation in an effort to make essential medications more accessible and affordable for all.