America’s Federal Trade Commission has announced it is suing three drug middlemen, accusing them of inflating insulin prices – long a topic of controversy in the country.
The FTC accused the “Big Three” pharmacy benefit managers (PBMs) – UnitedHealth Group’s Optum Rx, CVS Health’s Caremark and Cigna’s Express Scripts – of “engaging in anti-competitive and unfair rebating practices that have artificially inflated the list price of insulin drugs, impaired patients’ access to lower list price products, and shifted the cost of high insulin list prices to vulnerable patients”.
In the US, around 8m people rely on insulin, reports NBC News. PBMs work with insurance companies to negotiate discounted prices from pharmaceutical companies in exchange for including the drugs in their coverage. In theory, they are supposed to save patients money.
Also included in the lawsuit are the PBMs’ group purchasing organisations, which include Zinc Health Services, Ascent Health Services and Emisar Pharma Services.
The “Big Three” oversee around 80% of all prescription drug plans in the country, according to the complaint, which alleges that they created a rebate system prioritising high rebates from drug manufacturers, leading to the inflated insulin prices.
“This perverse system results in billions of dollars in rebates and fees for the PBMs and their health plan sponsor clients – but at the expense of certain vulnerable diabetic patients who must pay significantly more out-of-pocket for their critical medications,” the FTC said.
In a statement, CVS Caremark said the FTC’s allegations are “simply wrong” and blamed drug manufacturers for hiking up the price of the drugs.
Cigna’s chief legal officer, Andrea Nelson, said the lawsuit continued the FTC’s “troubling pattern” of “unsubstantiated and ideologically driven attacks” on pharmacy benefit managers. Cigna filed a lawsuit against the FTC on Tuesday requesting that it withdraw the report.
UnitedHealth Group did not immediately respond to requests for comment.
The FTC said that insulin medication was previously more affordable, using the example of Humalog, a medication manufactured by Eli Lilly, that cost about $21 in 1999. The drug was priced at $274 in 2017, as a result of the PBMs rebate system strategy, the FTC said.
It’s not only the PBMs that are responsible for the skyrocketing prices, the FTC said, but also drug manufacturers like Lilly and Novo Nordisk, which the commission says “should be on notice” because they may be sued in the future.
The National Community Pharmacists Association supported the FTC’s lawsuit against the PBMs in a statement released Friday.
“One of the many ways that PBMs manipulate the system against patients, taxpayers, and small pharmacies is the rebate game,” said Douglas Hoey, the association’s chief executive officer. “The PBMs determine which drugs are covered by health insurance plans. They get bigger rebates for the most expensive drugs.
“Naturally, the most expensive drugs end up on the formularies even when there are cheaper alternatives. Patients end up paying more. Employers end up paying more. Taxpayers end up paying more. And more small business pharmacies are driven out of business. The rebates create a powerful incentive for higher drug prices, which is completely upside-down.”
See more from MedicalBrief archives:
California AG sues big pharma over insulin prices
Eli Lilly slashes insulin prices by 70%
Insulin price illustrates global web of patent laws protecting Big Pharma
‘Captive’ Type-1 diabetes patients: Paying until it hurts