The Federal Trade Commission Friday announced it was suing the country's three biggest pharmacy benefit managers, claiming unfair practices inflated the cost of insulin.
Pharmacy benefit managers, or PBMs, negotiate rebates on drugs for insurance companies, unions and government agencies. Those rebates help lower copay costs for patients, but critics say they also force manufacturers to increase the list price of a drug, ultimately raising the price for patients at the counter.
Optum Rx, owned by United Health Group; CVS Health's Caremark and Express Scripts, owned by Cigna, are all named in the suit.
The FTC said the PBMs "have abused their economic power by rigging pharmaceutical supply chain competition in their favor, forcing patients to pay more for life-saving medication."
It cited the cost of Humalog, an Eli Lilly-made insulin, which rose 1,200% over 18 years. Eli Lilly announced last year it was reducing the cost of Humalog by 70%.
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Scripps News reached out to the PBMs listed in the lawsuit for a response. All three suggested the FTCs complaint presented a flawed view of the drug pricing process, and placed blame for the high costs of insulin elsewhere.
Optum Rx said "For many years, Optum Rx has aggressively and successfully negotiated with drug manufacturers and taken additional actions to lower prescription insulin costs for our health plan customers and their members, who now pay an average of less than $18 per month for insulin."
Caremark responded similarly, alleging "Three brand drugmakers control nearly the entire insulin market, and without competitive lower cost generic alternatives, they raised their list prices by as much as 500% in lockstep with one another prior to 2012."
And Express Scripts said "Once again, the FTC — a government agency funded by taxpayer dollars is proving that the FTC does not understand drug pricing and instead is choosing to ignore the facts and score political points, rather than focus on its duty to protect consumers."
