Federal Trade Commission to Sue Three Major Health Companies Over Insulin Prices

The Federal Trade Commission (FTC) is planning to sue three large U.S. health companies, UnitedHealth Group’s Optum Rx, CVS Health’s Caremark, and Cigna’s Express Scripts, over their practices as middlemen who negotiate prices for medications such as insulin. The agency argues that these companies inflate costs for patients, a person familiar with the matter told CNBC.

Background

Pharmacy benefit managers (PBMs) sit at the center of the drug supply chain in the U.S. They negotiate rebates with drug manufacturers on behalf of insurers, large employers, and others. They also create lists of medications – or formularies – that are covered by insurance and reimburse pharmacies for prescriptions.

The Lawsuits

The FTC is expected to target the three biggest PBMs, focusing on their business practices related to the rebates they broker with drug manufacturers. The lawsuits will specifically examine the rebates and fees collected by these middlemen, which critics argue force drug manufacturers to increase list prices for products.

Reactions from the Companies

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

An Express Scripts spokesperson said the "prices of insulin and other medicines are set by their manufacturers, who have raised list prices repeatedly." The spokesperson added that Express Scripts works 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."

The FTC’s Investigation

The FTC has been investigating PBMs since 2022. The investigation into insulin prices also examines drugmakers, but it is unclear whether they will be named in the upcoming lawsuits. The FTC has released a scathing interim report based on the ongoing investigation, accusing the three largest PBMs of manipulating the drug supply chain to enrich themselves at the expense of smaller, independent pharmacies and U.S. patients.

The Impact on Patients

The high cost of prescription drugs, including insulin, has become a major concern for many Americans. On average, Americans pay two to three times more than patients in other developed nations for prescription drugs. The Biden administration and Congress have ramped up pressure on PBMs, seeking to increase transparency into their operations as many Americans struggle to afford prescription drugs.

Conclusion

The FTC’s decision to sue three major health companies over insulin prices is a significant step towards addressing the high cost of prescription drugs in the U.S. The agency’s investigation has uncovered evidence of manipulation and price-gouging by PBMs, which has led to higher costs for patients. As the FTC continues its investigation and potential lawsuits, it is essential to ensure that patients have access to affordable prescription drugs.

FAQs

Q: What is the Federal Trade Commission (FTC)?
A: The FTC is an independent agency of the United States government responsible for protecting consumers and promoting competition.

Q: What is a pharmacy benefit manager (PBM)?
A: A PBM is a company that negotiates prices for medications on behalf of insurers, large employers, and others.

Q: Why is the FTC suing three major health companies?
A: The FTC is suing three major health companies, UnitedHealth Group’s Optum Rx, CVS Health’s Caremark, and Cigna’s Express Scripts, over their practices as middlemen who negotiate prices for medications such as insulin. The agency argues that these companies inflate costs for patients.

Q: What is the impact of high prescription drug prices on patients?
A: High prescription drug prices can have a significant impact on patients, including increased financial burden, reduced access to necessary medications, and decreased health outcomes.

Q: What is the Biden administration doing to address high prescription drug prices?
A: The Biden administration has taken several steps to address high prescription drug prices, including capping insulin prices for Medicare beneficiaries at $35 per month and increasing transparency into the operations of pharmacy benefit managers.

Author: www.cnbc.com

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