FTC sues drug middlemen for inflating insulin prices
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The Federal Trade Commission on Friday said it sued the three largest prescription drug middlemen, accusing them of illegally inflating the price of insulin and driving up costs to diabetes patients.
Why it matters: The move follows the FTC's July report on pharmacy benefit managers, which outlined a system in which industry consolidation allows the middlemen to manipulate markets at the expense of patients.
- The complaint is not expected to be publicly available until Monday, an FTC spokesperson told Axios.
The big picture: The Federal Trade Commission said it sued CVS' Caremark Rx, Cigna's Express Scripts and UnitedHealth's Optum Rx, along with their respective group purchasing organizations. The PBMs negotiate prices with drug companies and help insurers decide which drugs are covered for a patient.
- "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," Rahul Rao, deputy director of the FTC's Bureau of Competition, said in a statement.
- Momentum for congressional action to reduce PBMs' influence over patient costs has been building this year.
- "I applaud FTC Chair Lina Khan for taking this critical step and sending a message that PBMs' days of abusing patients are coming to an end. It is time to bust this monopoly up for good," Rep. Buddy Carter (R-Ga.) said in a statement about the lawsuit.
The other side: "This baseless action demonstrates a profound misunderstanding of how drug pricing works," Optum Rx spokesperson Elizabeth Hoff said in a statement.
- The lawsuit ignores the progress pharmacy benefit managers have made to lower insulin prices, said Greg Lopes, vice president of public affairs at the Pharmaceutical Care Management Association, a trade group for PBMs.
- "This action not only fails to accurately consider the role of the entire prescription drug supply chain, but disregards positive progress, supported by PBMs, in making insulin more affordable for patients," Lopes said in an email.
- The group cited industry data showing the average out-of-pocket cost for a month's supply of insulin declined across all pay types, to $18.64 in 2023, compared to $25.79 in 2019.
Catch up quick: Express Scripts filed its own lawsuit earlier this week, seeking a retraction of the FTC's July report, which it called unconstitutional and driven by "clear ideological bias." Experts say the lawsuit is unlikely to succeed.
Zoom out: The FTC said it's also concerned about pharmaceutical companies' role in making insulin unaffordable for patients, and indicated it could take action against leading manufacturers Eli Lilly, Sanofi and Novo Nordisk in the future.
- "Although not named in this case, all drug manufacturers should be on notice that their participation in the type of conduct challenged here can raise serious concerns," the agency said in a news release.
- Lilly, in a statement, said the FTC lawsuit concerns aspects of the U.S. health care system that it's advocating to reform, adding it was working to reduce out-of-pocket costs for people who take insulin.
- Sanofi told Axios that it agrees with FTC that pharmacy benefit managers have used rebates to benefit themselves. Sanofi and Novo Nordisk spokespeople also said the companies are committed to helping patients access medications.
