Federal Trade Commission (FTC) is planning to sue three major US health companies, including UnitedHealth Group’s Optum Rx, CVS Health’s Caremark, and Cigna’s Express Scripts, over their practices as middlemen in negotiating prices for medications such as insulin. The agency argues that these companies inflate costs for patients. The lawsuits will specifically focus on the business practices related to the rebates the pharmacy benefit managers (PBMs) broker with drug manufacturers.
PBMs sit at the center of the US drug supply chain. They negotiate rebates with drug manufacturers on behalf of insurers, large employers, and others. They also create formularies, which are lists of medications covered by insurance, and reimburse pharmacies for prescriptions. However, the FTC has been investigating PBMs since 2022, and they released an interim report accusing the three largest PBMs of manipulating the drug supply chain to enrich themselves at the expense of smaller, independent pharmacies and US patients.
The report revealed that six of the largest PBMs handled nearly 95% of the prescriptions filled in the US. It also highlighted that PBMs contend that manufacturers are responsible for high drug prices, while drugmakers argue that rebates and fees collected by PBMs force them to increase list prices for products. The ongoing investigation into PBMs also includes an examination of insulin prices and potentially implicates drugmakers such as Eli Lilly, Sanofi, and Novo Nordisk, who control roughly 90% of the US insulin market.
The Biden administration and Congress have increased pressure on PBMs, seeking to increase transparency into their operations as many Americans struggle to afford prescription drugs. According to a White House fact sheet, Americans pay two to three times more than patients in other developed nations for prescription drugs. In an effort to address this issue, President Joe Biden’s Inflation Reduction Act has capped insulin prices for Medicare beneficiaries at $35 per month. However, this policy does not currently extend to patients with private insurance.
While the lawsuits against Optum Rx, Caremark, and Express Scripts have not yet been filed, the FTC’s actions signal a significant move toward holding PBMs accountable for their role in driving up drug prices. By targeting these major players in the industry, the FTC aims to address the systemic issues that contribute to the high cost of medications. With the ongoing investigation and potential legal action, there is hope that greater transparency and regulation will lead to more affordable prescription drugs for all Americans.
 plans to sue major US health companies, including Optum Rx, Caremark, and Express Scripts, over their practices as middlemen in negotiating medication prices. The FTC argues that these companies inflate costs for patients by manipulating the drug supply chain. Discover how the investigation into pharmacy benefit managers (PBMs) reveals their control over prescriptions filled in the US and their impact on drug prices. Explore the pressure from the Biden administration and Congress to increase transparency in PBM operations and address the issue of high drug prices. Find out how the FTC's potential lawsuits against these major players in the industry could lead to greater accountability and regulation, ultimately resulting in more affordable prescription drugs for all Americans.){kind=link}