The Federal Trade Commission is reportedly gearing up to file lawsuits against three major U.S. health companies for their practices as intermediaries negotiating medication prices, particularly for insulin. These companies include UnitedHealth Group’s Optum Rx, CVS Health’s Caremark, and Cigna’s Express Scripts. The FTC argues that these practices lead to inflated costs for patients, impacting access to essential medications.
The impending lawsuits will target the business practices related to the rebates that pharmacy benefit managers (PBMs) orchestrate with drug manufacturers. These rebates play a significant role in determining the final prices of medications. The FTC’s investigation also looks into the role of drug manufacturers in setting prices, with a focus on insulin providers like Eli Lilly, Sanofi, and Novo Nordisk.
In a scathing interim report released by the FTC, the three largest PBMs were criticized for manipulating the drug supply chain to benefit themselves at the expense of smaller pharmacies and patients. PBMs serve as key players in the U.S. drug supply chain, negotiating deals with manufacturers, managing formularies, and reimbursing pharmacies for prescriptions.
The Biden administration and Congress have been increasing pressure on PBMs to improve transparency in their operations, especially as the cost of prescription drugs remains a pressing issue for many Americans. Statistics show that Americans often pay considerably more for medications compared to residents of other developed nations, making medication affordability a significant concern.
President Joe Biden’s Inflation Reduction Act has introduced measures to address high medication costs, including capping insulin prices for Medicare beneficiaries at $35 per month. However, these policies do not currently extend to patients with private insurance, further highlighting the complexities of medication pricing and accessibility in the U.S. healthcare system.
The impending lawsuits by the FTC against major health companies shed light on the challenges within the pharmaceutical industry, particularly in relation to medication pricing. The role of PBMs, drug manufacturers, and policymakers in addressing these issues remains a focal point for ongoing debates and regulatory actions aimed at safeguarding patient interests and ensuring affordable access to essential medications.