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Three of the largest pharmacy benefit managers ––Express Scripts, Optum, and Caremark––are listed in the suit.
The Federal Trade Commission (FTC) today announced that it is officially suing major pharmacy benefit managers (PBMs) Express Scripts, Caremark, Optum, and their affiliated group purchasing organizations (GPOs), alleging that the corporations engaged in unfair rebating practices that have inflated the prices of insulin drugs and hindered the ability of patients to access them.1
Image credit: © Andriy Blokhin | stock.adobe.com
The suit is months in the making; in July, the FTC released an interim report that recognized the outsized impact PBMs have as middlemen in the pharmaceutical industry, significantly affecting patient accessibility and affordability of critical prescription drugs.2
Shortly after the release of that interim report, multiple sources reported that the FTC was preparing to sue the previously mentioned PBMs, which are the 3 largest in the country, for their alleged unfair business practices. Now, the agency is officially bringing legal action against the corporations.3
“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 the news release.1 “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.”
Specifically, the FTC is alleging that those 3 PBMs “created a perverse drug rebate system” that led to high rebates from drug manufacturers, inflating insulin prices in the process. Even when lower list prices would become available—potentially making the drug even more affordable for vulnerable patients—the PBMs “systematically excluded them in favor of high list price, highly rebated” insulin.1
In a corresponding statement on behalf of the Bureau of Competition, Rao does not only criticize the major PBMs that are being sued. Rao highlights the actions of other actors that “have contributed to this broken system,” and that although the FTC is not including them in the suit now, insulin manufacturers Eli Lilly, Sanofi, and Novo Nordisk “play in the challenged conduct.”4
1. The Federal Trade Commission (FTC) is filing suit against the 3 largest pharmacy benefit managers (PBMs) in the United States.
2. The suit alleges that Express Scripts, Caremark, and Optum engaged in unfair business practices to inflate the price of insulin.
3. An interim report published in July by the FTC documented the alleged practices of PBMs in detail, causing Express Scripts to demand retraction of the report.
That statement alleges that those insulin manufacturers have “sharply inflated” the list price of the insulin products they produce, directly in response to the demands of PBMs for higher rebates. Rao specifically cites the massive increase in price of Eli Lilly’s Humalog, which was $21 in 1999 and $274 in 2017.4
“The skyrocketing list price of insulin has had devastating consequences for far too many diabetic patients who have struggled to afford their medication and have been forced to ration these life-saving drugs,” Rao said in the statement.4
This suit is poised to be challenged. Already, Express Scripts has filed suit against the FTC regarding the publishing of its July interim report, alleging that the claims made in the report are false and demanding a retraction. In the suit, Express Scripts argues that the report disregards crucial evidence and could raise drug prices in the process.5
Voting to file an administrative complaint among the FTC board members was 3-0-2, with 2 commissioners, Melissa Holyoak and Andrew N. Ferguson, recusing.1
