FTC sues PBMs over insulin drug prices

On Friday, the USA’s Federal Trade Commission (FTC) brought action against the three largest prescription drug benefit managers (PBMs) - Caremark Rx, Express Scripts (ESI), and OptumRx - and their affiliated group purchasing organizations (GPOs) for engaging in anticompetitive and unfair rebating practices that have artificially inflated the list price of insulin drugs, impaired patients’ access to lower list price products, and shifted the cost of high insulin list prices to vulnerable patients.

The FTC’s administrative complaint alleges that CVS Health’s Caremark, Cigna’s ESI, and United Health Group’s (NYSE: UNH) Optum, and their respective GPOs - Zinc Health Services, Ascent Health Services, and Emisar Pharma Services - have abused their economic power by rigging pharmaceutical supply chain competition in their favor, forcing patients to pay more for life-saving medication. According to the complaint, these PBMs, known as the Big Three, together administer about 80% of all prescriptions in the USA.

The FTC alleges that the three PBMs created a perverse drug rebate system that prioritizes high rebates from drug manufacturers, leading to artificially inflated insulin list prices. The complaint charges that even when lower list price insulins became available that could have been more affordable for vulnerable patients, the PBMs systemically excluded them in favor of high list price, highly rebated insulin products. These strategies have allowed the PBMs and GPOs to line their pockets while certain patients are forced to pay higher out-of-pocket costs for insulin medication, the FTC’s complaint alleges.