The Federal Trade Commission is gearing up to file lawsuits against three major U.S. health companies for their roles as intermediaries in negotiating prices for medications like insulin. The agency believes that these companies contribute to inflating costs for patients, according to a report from CNBC. The three companies in the spotlight are UnitedHealth Group’s Optum Rx, CVS Health’s Caremark, and Cigna’s Express Scripts, all of which are affiliated with health insurers. The focus of the lawsuits will be on the business practices surrounding the rebates that pharmacy benefit managers (PBMs) broker with drug manufacturers.
In response to the impending legal action, CVS Caremark emphasized their efforts to make insulin more affordable for all Americans with diabetes and their commitment to curbing rising prescription drug prices. Express Scripts defended their role in combating high pharmaceutical prices and highlighted their success in lowering the cost of medicines for patients and health plans. However, the FTC has remained tight-lipped about the reported lawsuits, and Optum Rx has not yet provided a statement regarding the situation.
PBMs play a crucial role in the U.S. drug supply chain as they negotiate rebates with drug manufacturers on behalf of insurers, large employers, and other stakeholders. They also curate lists of covered medications and handle reimbursement for pharmacies. The FTC’s investigation into insulin pricing not only targets the PBMs but also scrutinizes the actions of drugmakers such as Eli Lilly, Sanofi, and Novo Nordisk, who dominate the U.S. insulin market. The report released by the FTC condemns the manipulation of the drug supply chain by the largest PBMs to benefit themselves at the expense of smaller pharmacies and patients in the U.S.
The Biden administration and Congress have increased pressure on PBMs to enhance transparency in their operations and address the issue of exorbitant drug prices faced by many Americans. The Inflation Reduction Act signed by President Biden includes a provision to cap insulin prices for Medicare beneficiaries at $35 per month, but this protection does not extend to individuals with private insurance. The ongoing scrutiny of PBMs and drug manufacturers indicates a broader effort to reform the pharmaceutical industry and make medications more affordable for consumers.
The upcoming lawsuits against major health companies underscore the ongoing battle to regulate drug pricing in the U.S. While PBMs and drugmakers point fingers at each other, it is clear that concerted efforts are needed to ensure fair pricing and accessibility of essential medications like insulin. As the legal proceedings unfold, the outcome could have far-reaching implications for the pharmaceutical industry and the millions of Americans struggling to afford their prescription drugs.