The Federal Trade Commission (FTC) filed a lawsuit on Friday against three major U.S. healthcare corporations that negotiate insulin prices. The plaintiffs argue that the middlemen used practices that increased their profits while “artificially” inflating costs for patients.
The lawsuit is directed against the three largest so-called Pharmacy Benefit Managers, The United Health Group Optum Rx, CVS Health Caremark and Cigna's Express Scripts. All are owned by or affiliated with health insurers and together fill about 80% of the nation's prescriptions, in line with the FTC.
The FTC's lawsuit also affects each PBM's affiliated purchasing organization, which arranges drug purchases for hospitals and other health care providers. The agency said it might recommend suing drugmakers. Eli Lilly, Sanofi And Novo Nordisk proceed to debate their role in increasing the list prices of their insulin products.
A UnitedHealth spokesman said the lawsuit shows “a profound misunderstanding of how drug pricing works,” and noted that Optum RX has negotiated “aggressively and successfully” with drug manufacturers.
A CVS spokesman said Caremark was “proud of the work” it had done to make insulin more cost-effective for Americans, adding, “To suggest otherwise, as the FTC did today, is simply wrong.”
And a spokesperson for Express Scripts said the lawsuit “continues a disturbing pattern of baseless and ideologically motivated attacks by the FTC on PBMs.” It comes three days after Express Scripts sued the FTC, asking the agency to remove its allegedly “defamatory” July report alleging that the PBM industry was raising drug prices.
PBMs are the middle of the drug supply chain within the United States. They negotiate rebates with drug manufacturers on behalf of insurers, large employers, and government health plans. They also create drug lists, or drug schedules, covered by insurance and reimburse pharmacies for prescriptions. The FTC has been investigating PBMs since 2022.
The agency's lawsuit argues that the three PBMs have created a “perverse” drug rebate system that favors deep rebates from drug manufacturers, leading to “artificially inflated insulin list prices.” It also alleges that PBMs favor these high-priced insulins even when cheaper insulins with lower list prices grow to be available.
The FTC files its criticism in what’s referred to as an administrative proceeding, which initiates proceedings before an administrative law judge who hears the case.
“Millions of Americans with diabetes need insulin to survive, yet for many of these vulnerable patients, the cost of insulin medications has skyrocketed over the past decade, in part because of powerful PBMs and their greed,” Rahul Rao, deputy director of the FTC's Bureau of Competition, said in a press release.
“The FTC's administrative action is designed to put an end to the exploitative behavior of the three major PBMs and represents an important step in fixing a broken system – a repair that could have implications beyond the insulin market and restore healthy competition to lower drug prices for consumers,” Rao continued.
According to the FTC, roughly eight million Americans with diabetes depend on insulin to survive, and plenty of are forced to ration treatment as a consequence of high prices.
President Joe Biden's inflation-fighting bill capped insulin prices at $35 monthly for Medicare beneficiaries. This rule doesn’t currently apply to patients with private medical health insurance.
The Biden administration and Congress have increased pressure on PBMs and are attempting 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. Profile from the White House.
The FTC continued to precise “deep concern” concerning the role of insulin manufacturers in raising list prices, arguing that they’re driving up prices in response to PBMs' demands for higher rebates. Eli Lilly, Sanofi and Novo Nordisk control about 90 percent of the U.S. insulin market.
For example, in line with the FTC, the list price of Eli Lilly's Humalog insulin was $274 in 2017, a rise of greater than 1,200 percent from the list price of $21 in 1999.
The FTC said all pharmaceutical corporations needs to be aware that their involvement within the variety of conduct alleged here raises serious concerns.
An Eli Lilly spokesman said the FTC's criticism “affects aspects of the U.S. health care system that we have long advocated for reform.” He added that last yr the corporate was the primary to cap out-of-pocket costs for all of its insulins for privately insured people at $35 a month. Eli Lilly has also reduced the list prices of some insulins by as much as 70 percent.
Sanofi last yr announced an identical price cap of $35 monthly for its mostly prescribed insulin. Novo Nordisk also announced last yr that it would scale back the list prices of a few of its hottest insulins by as much as 75 percent.
Sanofi and Novo Nordisk didn’t immediately reply to requests for comment.
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