After weeks of internal disagreements at the Federal Trade Commission about pharmacy benefit managers, the agency said Sept. 20 that it is suing CVS Caremark, Optum Rx and Express Scripts over allegedly inflating insulin prices.
In an administrative complaint, the FTC accused the three PBMs of "abus[ing] their economic power by rigging pharmaceutical supply chain competition in their favor." The complaint alleges these PBMs excluded low-cost insulins to achieve higher rebates, thus artificially inflating insulin list prices and hurting patients.
The FTC said the legal action also includes the companies' group purchasing organizations, Zinc Health Services, Ascent Health Services and Emisar Pharma Services.
What to know:
- In recent years, the FTC has stepped away from its decadeslong support of PBMs, which handle drug pricing negotiations between drug manufacturers, payers and pharmacies. Six companies — CVS Caremark, Express Scripts, Optum Rx, Humana Pharmacy Solutions, MedImpact Healthcare Systems and Prime Therapeutics — account for 94% of the industry, and the first three managed about 80% of all prescription claims in 2023.
- The legal action comes amid the FTC's yearslong investigation into the top six PBMs over allegations of opaque business practices. In July, FTC staff published an interim report on the probe, which said PBMs engage in favoritism for their own pharmacies and have vast control over drug prices. However, two FTC commissioners criticized the report, saying it lacked evidence and substance to its claims.
- The FTC Commission's vote to file an administrative complaint was 3-0-2, with Commissioners Melissa Holyoak and Andrew Ferguson recused. Ms. Holyoak and Mr. Ferguson were the commissioners who condemned the interim report.
- Cigna, which owns Express Scripts, filed a lawsuit against the FTC Sept. 17 over the interim report. The company called the report "unfair, biased, erroneous and defamatory."
- These PBMs and their GPOs did not alone drive up insulin prices, the FTC said in a Sept. 20 statement. Although the agency did not file a lawsuit against insulin manufacturers, the commission's Bureau of Competition said it is "deeply troubled" by list price increases from Eli Lilly, Sanofi and Novo Nordisk. The bureau said it might recommend suing these drugmakers.
- CVS Health told Becker's its PBM has negotiated lower insulin prices and increased competition after three leading brand insulin manufacturers have raised their list prices by as much as 500% before 2012.
- Express Scripts echoed some of CVS' comments in a Sept. 20 statement, saying it has saved its members billions of dollars by lowering the net cost of insulin. The PBM also said it "already includes low-list price insulin alternatives on its largest standard formulary, and for 2025, Express Scripts has already determined to co-prefer additional insulins because doing so will result in lower net costs for plan sponsors."
- UnitedHealth Group's Optum Rx did not immediately respond to Becker's request for comment.
- The Pharmaceutical Care Management Association, a trade association representing PBMs, said the FTC "is running a biased investigation with predetermined anti-industry outcomes — driven by the self-serving agendas of special interests and designed to misrepresent the role and value of pharmacy benefit managers."
- The National Community Pharmacists Association, which represents more than 19,400 pharmacies, applauded the FTC's action, saying it is pleased to see an effort to end PBMs' "rebate game."