FTC to sue PBMs over drug prices, including insulin, source says

Lina Khan, Chair of the Federal Trade Commission, testifies during a hearing of the House Appropriations Subcommittee on Financial Services and General Government, May 15, 2024.

Tom Williams | CQ-Roll Call, Inc. | Getty Images

The Federal Trade Commission plans to sue three major U.S. health care companies over their practices as middlemen in negotiating the prices of medications such as insulin, a source with knowledge of the matter told CNBC on Wednesday that the agency is alleging that these middlemen are driving up costs for patients.

The lawsuits are expected to target the three largest so-called pharmacy benefits managers, UnitedHealth Group's Optum Rx, CVS Health's Caremark and Cigna's Express Scripts, said the person, with whom he had a earlier Wall Street Journal report Wednesday about the agency's plans. All three are owned by or affiliated with health insurers.

The lawsuits will specifically focus on business practices related to the rebates that pharmacy benefit managers (PBMs) broker with drugmakers, the Journal reported, citing sources familiar with the matter.

A CVS Caremark spokesperson said in a statement Wednesday that the company “is proud of the work we've done to make insulin more affordable for all Americans with diabetes, and we stand by our track record of protecting American businesses, unions and patients from rising prescription drug prices.”

A customer visits a CVS pharmacy in Miami, February 7, 2024.

Joe Raedle | Getty Images

A spokesperson for Express Scripts said that “the prices of insulin and other medications are set by the manufacturers, who have repeatedly raised list prices.” The spokesperson said Express Scripts is working “to combat the pharmaceutical industry's high prices and lower the cost of thousands of medications for patients and their plans, and the data shows we are succeeding.”

An Optum Rx spokesperson did not immediately respond to a request for comment.

The FTC declined to comment on the reported lawsuits.

PBMs are central to the U.S. drug supply chain. They negotiate rebates with drugmakers on behalf of insurers, large employers and others. They also create lists of drugs — or formularies — that are covered by insurance and reimburse pharmacies for prescriptions.

The FTC has been investigating PBMs since 2022. The insulin pricing investigation has also targeted drugmakers, but it is unclear whether they will be named in the upcoming lawsuits. Politics reported, citing sources familiar with the matter. Eli LillyFrench pharmacist Sanofi and Danish pharmaceutical company New Nordisk control approximately 90% of the US insulin market.

Pharmacist Thomas Jensen looks at a prescription medication at the Rock Canyon Pharmacy in Provo, Utah, on May 9, 2019.

George Frey | Reuters

The FTC announced Tuesday a damning interim report based on the ongoing investigation into PBMs. The report accused the three largest PBMs of manipulating the drug supply chain to enrich themselves at the expense of smaller, independent pharmacies and American patients.

The FTC report found that six of the largest PBMs processed nearly 95% of prescriptions filled in the U.S.

PBMs claim that manufacturers are responsible for high drug prices, while pharmaceutical companies claim that rebates and fees collected by these middlemen force them to raise the list prices of their products.

The Biden administration and Congress have been ramping up pressure on PBMs, seeking to increase transparency in their operations as many Americans struggle to afford prescription drugs. On average, Americans pay two to three times more than patients in other developed countries for prescription drugs, according to a information sheet from the White House.

President Joe Biden’s Inflation Reduction Act caps insulin prices for Medicare beneficiaries at $35 per month. That policy currently does not apply to patients with private insurance.

Related Posts

  • World
  • July 12, 2024
  • 2 views
  • 2 minutes Read
Elon Musk's X misleads users and violates online content rules, says EU

Elon Musk, CEO of SpaceX and Tesla and owner of X, speaks at the Milken Conference 2024 in Beverly Hills, California, May 6, 2024. David Swanson | Reuters The European…

  • World
  • July 12, 2024
  • 2 views
  • 2 minutes Read
American tourist dies after suddenly falling ill on Mount Etna in Sicily, rescuers say

A 55-year-old American tourist has died after becoming unwell during an excursion on the southern slopes of Mount Etna in Sicily, Italy's rescue service said on Friday. Rescuers said the…

Leave a Reply

Your email address will not be published. Required fields are marked *

You Missed

Wells Fargo WFC Q2 2024 Earnings

  • July 12, 2024
Wells Fargo WFC Q2 2024 Earnings

Elon Musk's X misleads users and violates online content rules, says EU

  • July 12, 2024
Elon Musk's X misleads users and violates online content rules, says EU

'Sing Sing' Avoids Simplified Stories of Hope: NPR

  • July 12, 2024
'Sing Sing' Avoids Simplified Stories of Hope: NPR

What previous U.S. Soccer hires tell us about the plan to replace fired USMNT coach Gregg Berhalter

  • July 12, 2024

American tourist dies after suddenly falling ill on Mount Etna in Sicily, rescuers say

  • July 12, 2024
American tourist dies after suddenly falling ill on Mount Etna in Sicily, rescuers say

Citigroup (C) Q2 2024 Earnings

  • July 12, 2024
Citigroup (C) Q2 2024 Earnings

Tell me: What's your story of survival in the California wilderness?

  • July 12, 2024
Tell me: What's your story of survival in the California wilderness?

'Hawk tuah', Zynternet and the bro-vote; plus cowboys are having a moment

  • July 12, 2024
'Hawk tuah', Zynternet and the bro-vote; plus cowboys are having a moment

'Relief': Canadian serial killer Jeremy Skibicki found guilty

  • July 12, 2024
'Relief': Canadian serial killer Jeremy Skibicki found guilty

NFL open to private equity team ownership, says Roger Goodell

  • July 12, 2024
NFL open to private equity team ownership, says Roger Goodell

Visiting a US National Park This Summer? Don't Do This Or You'll Get Fined

  • July 12, 2024
Visiting a US National Park This Summer? Don't Do This Or You'll Get Fined