The FTC initiates a lawsuit against the biggest intermediaries in the pharmaceutical sector, accused of artificially elevating insulin costs.
The authorities claim that CVS Health's Caremark Rx, Cigna's Express Scripts, and United Health Group's OptumRx, along with their associated group purchasing organizations, have established a mechanism that favors substantial rebates from pharmaceutical companies, hence inflating the retail prices of insulin. The entities, commonly known as Pharmacy Benefit Managers (PBMs), reportedly disregard affordable insulin options available in the market, opting instead for pricier insulin variants that offer higher rebates.
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PBMs earn profits through rebates and fees, which are agreements finalized with drug manufacturers and proportionate to the drug's list price. Higher-priced insulin products result in higher rebates and fees for the PBMs, according to the allegations.
"Millions of Americans with diabetes require insulin to live, but for numerous at-risk patients, their insulin prescription costs have skyrocketed over the past decade, partly due to the influence of powerful PBMs and their avarice," stated Rahul Rao, deputy director of the FTC's Bureau of Competition. "Caremark, ESI, and Optum, serving as medication intermediaries, have illegally extracted millions of dollars from patients who necessitate life-saving medications. The FTC's administrative action aims to terminate the Big Three PBMs' exploitative behavior and constitutes a significant stride in rectifying a broken system – a rectification that could extend past the insulin market and revive healthy competition, leading to reduced drug prices for consumers."
CNN did not receive an immediate response from Caremark Rx, Express Scripts, OptumRx, or the Pharmaceutical Care Management Association, the industry's professional organization.
This is a developing story and will be upgraded.
The high costs of insulin for many diabetic patients are a cause for concern, especially as these prices have significantly increased over the past decade. This situation, according to Rahul Rao of the FTC's Bureau of Competition, can be partly attributed to the manipulative practices of Pharmacy Benefit Managers (PBMs), such as Caremark, ESI, and Optum, who prioritize higher rebates and fees over affordable options.
