The Federal Trade Commission (FTC) has filed a lawsuit against three major U.S. health companies that negotiate insulin prices, alleging that they engage in practices that increase their profits while driving up costs for patients. The suit targets UnitedHealth Group's Optum Rx, CVS Health's Caremark, and Cigna's Express Scripts, which collectively administer about 80% of the nation's prescriptions.
The FTC's lawsuit also includes each PBM's affiliated group purchasing organization, which brokers drug purchases for healthcare providers. The agency may also consider suing insulin manufacturers Eli Lilly, Sanofi, and Novo Nordisk in the future for their role in raising list prices for insulin products.
The PBMs have responded to the lawsuit by defending their practices, with a UnitedHealth spokesperson stating that the suit demonstrates a misunderstanding of drug pricing. CVS and Express Scripts also pushed back against the allegations, with Express Scripts accusing the FTC of making ideologically-driven attacks.
The FTC's lawsuit alleges that the PBMs have created a rebate system that prioritizes high rebates from drugmakers, leading to artificially inflated insulin prices. The agency argues that this system harms millions of Americans with diabetes who rely on insulin to survive.
President Joe Biden's Inflation Reduction Act has capped insulin prices for Medicare beneficiaries at $35 per month, but this policy does not currently extend to patients with private insurance. The Biden administration and Congress have increased pressure on PBMs to increase transparency in their operations as Americans struggle to afford prescription drugs.
The FTC remains concerned about the role of insulin manufacturers in driving up list prices, with Eli Lilly, Sanofi, and Novo Nordisk controlling a large portion of the U.S. insulin market. The agency has called on all drugmakers to be aware that their participation in this type of conduct raises serious concerns. Eli Lilly, Sanofi, and Novo Nordisk have taken steps to address pricing concerns, including capping out-of-pocket costs and slashing list prices for some insulin products.