Home » Federal lawsuit targets pharmacy benefit managers over insulin costs

Federal lawsuit targets pharmacy benefit managers over insulin costs

MENA Newswire News Desk: – The U.S. Federal Trade Commission (FTC) has filed a lawsuit against the three largest pharmacy benefit managers (PBMs), accusing them of inflating insulin prices and increasing costs for millions of diabetes patients. The suit, filed Friday, targets CVS’s Caremark Rx, Cigna’s Express Scripts, and UnitedHealth Group’s OptumRx. These PBMs are responsible for negotiating drug prices with manufacturers and managing which drugs are covered by insurance plans.

Federal lawsuit targets pharmacy benefit managers over insulin costs

According to the FTC, the PBMs artificially raised insulin prices by excluding lower-cost options from their formularies, favoring more expensive drugs with higher rebates from manufacturers. This practice has driven up the price of insulin for patients, with Eli Lilly’s Humalog insulin cited as an example. The drug’s price surged by over 1,200% between 1999 and 2017, from $21 to $274.

FTC Deputy Director of Competition Rahul Rao emphasized that the lawsuit aims to dismantle the PBMs’ rebate system and bring about broader reforms in drug pricing. “The Big Three PBMs have profited at the expense of patients who rely on life-saving medications,” Rao said. “This lawsuit marks a crucial step toward restoring fair competition in the pharmaceutical market.”

The FTC’s complaint also highlights the role of the PBMs’ affiliated group purchasing organizations – Zinc Health Services, Ascent Health Services, and Emisar Pharma Services in perpetuating the inflated prices. The FTC claims these organizations played a key role in maintaining high prices by creating a system that prioritized higher rebates over affordable drug options.

While the lawsuit focuses on insulin, FTC officials noted that their goal is to overhaul drug pricing practices across the pharmaceutical industry. Anonymously, one FTC official suggested that the rebate system distorts the market by making rebates a determining factor in which drugs are included in insurance plans.

Pharmaceutical companies and PBMs have been locked in a blame game over who is responsible for the rising cost of insulin. CVS and Express Scripts issued statements defending their practices, claiming that the FTC’s actions could lead to higher costs for patients. CVS added that its customers typically pay less than $25 per insulin dose, while Cigna’s Express Scripts called the lawsuit a politically motivated move that ignores the complex realities of drug pricing.

Friday’s legal action stems from a two-year investigation into PBMs and insulin manufacturers. Although drug companies are not named in this case, the FTC has warned manufacturers that they could face future lawsuits over similar practices. The FTC’s move is part of the Biden administration’s broader efforts to combat rising healthcare costs, especially in the pharmaceutical sector. As insulin remains critical for millions of Americans, the lawsuit underscores the high-stakes battle over drug prices in the U.S.

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