UnitedHealth, Cigna, CVS PBMs targeted by FTC over inflated insulin prices

The Federal Trade Commission has brought an administrative complaint against three of the country’s largest pharmacy benefit managers (PBMs), accusing them of engaging in practices that artificially inflated the list price of insulin drugs.

OptumRx. Express Scripts, and Caremark Rx are the trio named in the lawsuit. They are owned by, respectively, UnitedHealth Group (NYSE:UNH), Cigna Group (NYSE:CI), and CVS Health (NYSE:CVS), which health insurer Aetna is a part of.

The complaint “alleges that CVS Health’s Caremark, Cigna’s ESI, and United Health Group’s Optum, and their respective GPOs—Zinc Health Services, Ascent Health Services, and Emisar Pharma Services—have abused their economic power by rigging pharmaceutical supply chain competition in their favor, forcing patients to pay more for life-saving medication,” according to an FTC news release.

The FTC states that the three PBMs administer about 80% of all prescriptions in the U.S.

The agency alleges that OptumRx, Express Scripts, and Caremark Rx created a “perverse drug rebate system” where high rebates from drugmakers were sought after, and that this led to artificially inflated insulin list prices. And even when lower priced insulins were available, “the PBMs systemically excluded them in favor of high list price, highly rebated insulin products.”

The complaint also argues that the PBMs’ methods led to more revenue for them and group purchasing organizations at the expense of some patients who paid higher out-of-pocket costs for insulin as a result.

In a statement, FTC Bureau of Competition Deputy Director Rahul Rao said that the PBMs are not the only companies that have contributed to higher insulin costs for patients. The “FTC staff’s investigation has also shed light on the concerning and active role that the insulin manufacturers—Eli Lilly (LLY), Sanofi (SNY), and Novo Nordisk (NVO)—play in the challenged conduct.”