The Federal Trade Commission (FTC) filed a lawsuit Friday against three major prescription drug benefit managers (PBMs) and their affiliates, alleging the companies schemed to artificially inflate insulin drug prices.
The complaint targets the “Big Three” — Cigna’s ESI, CVS Health’s Caremark and United Health Group’s Optum — as well as their affiliated group purchasing organizations (GPOs), according to a press release. The PBMs listed in the complaint have “abused their economic power by rigging pharmaceutical supply chain competition in their favor, forcing patients to pay more for life-saving medication,” it alleges.
Drug list prices were able to be artificially inflated as a result of a “perverse” rebate system created by the PBMs, the FTC alleges. Further, insulin available to patients at lower cost were “systemically excluded” in favor of higher priced variants.
“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 said in the press release.
Together, the “Big Three” administer around 80% of all medication prescriptions in the U.S., according to the FTC.
FTC Bureau of Competition Deputy Director Rahul Rao also issued a statement Friday alleging that the PBMs are not the only “actors” who are potentially to blame for issues with inflated prices of drugs, pointing to insulin manufacturers.
“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,” Rao said. “Caremark, ESI, and Optum—as medication gatekeepers—have extracted millions of dollars off the backs of patients who need life-saving medications.”
“With today’s suit, the Commission is focusing this vital enforcement action against the PBMs, who sit at the center of the drug reimbursement system, and their affiliated GPOs,” Rao said in the statement. “The Bureau of Competition, however, remains deeply troubled by the role drug manufacturers play in driving up prices of life-saving medications like insulin. We expect that development of a full factual record in this lawsuit, as well as suits brought by state Attorneys General, will help shape the appropriate parameters of permissible conduct in this area.”
The FTC, Cigna, CVS Health and United Health Group did not immediately respond to the Daily Caller News Foundation’s request for comment.
Featured Image Credit: The White House
