FTC Sues PBMs Over Alleged Price Manipulation
By Consumers for Quality Care, on July 31, 2024
The Federal Trade Commission (FTC) is filing a lawsuit against the three largest pharmacy benefit managers (PBMs) over their price-negotiation tactics for critical prescription drugs, including insulin, according to The Wall Street Journal. The PBMs named in the lawsuit are UnitedHealth Group’s OptumRx, Cigna’s Express Scripts, and CVS Health’s Caremark.
The lawsuit comes after a two-year investigation into the industry’s business practices. PBMs have come under increased scrutiny in recent years for engaging in anti-consumer practices, including pushing consumers to buy preferred name-brand medications, instead of less expensive versions, inflating health care costs to maximize their profits.
According to a 2023 JAMA study, the cost of insulin has increased every year between 2010 and 2019. PBMs have been negotiating insulin prices since 2015. Last year, U.S. Senator Bernie Sanders (I-VT) accused PBMs of working with drug manufacturers to cover medications that yielded the largest rebates for themselves instead of ones that are less costly for consumers. Drug manufacturer Eli Lilly offers a less expensive version of its insulin medication on the market but has stated that insurers don’t cover it because the profit margins for PBMs aren’t significant.
PBM business practices have come under bipartisan fire in Congress, with both Republicans and Democrats launching investigations and calling for reforms. Congressman Buddy Carter (R-GA), who owned a pharmacy for 32 years, is an outspoken critic of PBMs and believes it is “time to bust up the PBM monopoly.”
CQC urges lawmakers and regulators at all levels to scrutinize harmful PBM practices that increase the cost of critical and life-saving prescription medications for consumers.
