The Federal Trade Commission (FTC) plans to sue three major U.S. health care corporations over their practices as middlemen in negotiating prices for drugs similar to insulin, arguing they drive up costs for patients, an individual acquainted with the matter told CNBC on Wednesday.
The lawsuits are expected to be directed against the three largest so-called pharmacy profit managers, UnitedHealth Group's Optum Rx, CVS Health's Caremark and Cigna's Express Scripts, the person said, confirming a earlier Wall Street Journal report Wednesday concerning the agency's plans. All three are owned by or affiliated with health insurers.
The lawsuits will focus specifically on business practices related to the rebates that pharmacy profit managers (PBMs) broker to drugmakers, the Journal reported, citing people acquainted with the matter.
A CVS Caremark spokesman said in a press release Wednesday that the corporate is “proud of the work we have done to make insulin more affordable for all Americans with diabetes, and we stand by our track record of protecting American businesses, unions and patients from rising prescription drug prices.”
An Express Scripts spokesperson said “prices for insulin and other drugs are set by manufacturers, who have repeatedly raised list prices.” The spokesperson said Express Scripts is working to “combat the pharmaceutical industry's high prices and lower the cost of thousands of drugs for patients and their health insurers, and the data shows we are succeeding.”
A spokesperson for Optum Rx didn’t immediately reply to a request for comment.
The FTC declined to comment on the reported complaints.
PBMs are the guts of the drug supply chain within the United States. They negotiate rebates with drug manufacturers on behalf of insurers, large employers, and others. They also create drug lists (or drug schedules) which might be covered by insurance and reimburse pharmacies for prescriptions.
The FTC has been investigating PBMs since 2022. The insulin pricing investigation can also be looking into drug manufacturers, nevertheless it is unclear whether or not they can be named within the upcoming lawsuits. Politico The ministry reported this, citing people acquainted with the matter. Eli LillyFrench pharmaceutical manufacturer Sanofi and Danish pharmaceutical company Novo Nordisk control about 90% of the US insulin market.
The FTC published on Tuesday a devastating interim report based on the continuing investigation into PBMs. The report accused the three largest PBMs of manipulating the drug supply chain to complement themselves on the expense of smaller, independent pharmacies and U.S. patients.
Six of the most important PBMs handled nearly 95 percent of all prescriptions filled within the United States, the FTC report said.
PBMs claim that manufacturers are chargeable for high drug prices, while drug corporations say that refunds and charges collected by middlemen force them to boost the list prices of their products.
The Biden administration and Congress have increased pressure on PBMs and try to extend transparency of their operations as many Americans struggle to afford prescribed drugs. On average, Americans pay two to thrice more for prescribed drugs than patients in other developed countries, in line with one study. data sheet from the White House.
President Joe Biden's inflation-fighting bill capped insulin prices at $35 per thirty days for Medicare beneficiaries. This rule doesn’t currently apply to patients with private medical health insurance.
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