FTC poised to sue drug middlemen over insulin prices
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The Federal Trade Commission plans to sue the three biggest prescription drug middlemen for allegedly using negotiating tactics to steer patients to use more expensive drugs, including insulins, according to a source familiar with the matter.
Why it matters: The planned suit, first reported by the Wall Street Journal, would follow a two-year FTC investigation that found pharmacy benefit managers use their dominance over the drug supply chain to hike prices and boost profits.
The FTC's case would target the three biggest PBMs — CVS Caremark, Express Scripts and OptumRx.
- Those PBMs manage about 80% of prescriptions and are integrated with the health insurers Aetna, Cigna and United Healthcare, respectively.
- The agency is also investigating drug manufacturers, although it is unclear if they will be included in this suit, the source told Axios speaking on the condition of anonymity.
- An FTC spokesperson declined to comment.
The big picture: PBMs have been in the regulatory crosshairs in recent years, and the FTC is cranking up pressure as Congress looks at changing the way Medicare reimburses the companies and imposing new transparency requirements.
- The companies negotiate with drugmakers on behalf of insurers and employers and argue that they are in the business of taking on manufacturers to lower prices.
The other side: In a statement, CVS Caremark said it "negotiated deep discounts" on behalf of its clients as well as brought insulin prices down by embracing the launch of the first biologic knockoffs.
- "The prices of insulin and other medicines are set by their manufacturers, who have raised list prices repeatedly," Express Scripts said in a statement. "We work to combat the pharmaceutical industry's high prices and lower the cost of thousands of medicines for patients and their health plans, and the data shows that we succeed."
- OptumRx declined to comment.
What to watch: On July 23, the House Oversight Committee will hold a hearing with CEOs of the three companies.
