The Federal Trade Commission plans to sue the three largest pharmacy benefit managers — UnitedHealth, Cigna and CVS Health — over price-negotiating tactics for drugs, including insulin. The Wall Street Journal reported. Wednesday.
Pharmacy benefit managers (PBMs) act as intermediaries between drug manufacturers and consumers: they negotiate commissions and volume-based discounts (kickbacks) with drug manufacturers, create the list of drugs covered by insurance, and reimburse pharmacies for prescriptions.
The spokesman said citing people familiar with the matter that the lawsuit will target business practices regarding kickbacks brokered by pharmaceutical companies.
“Any action that restricts the use of these PBM negotiating tools would benefit the pharmaceutical industry and return American businesses and patients to a broken market that leaves them at the mercy of prices set by drug companies,” a CVS spokesperson said, adding that the company vigorously defends the use of these tools.
The FTC and UnitedHealth declined to comment, while Cigna did not immediately respond to a Reuters request for comment.
CVS Health shares were down 1.2% in afternoon trading, while Cigna shares were also down slightly.
This comes one day after the FTC released an interim report finding that the three largest PBMs, which process 79 percent of U.S. prescription drug claims, are making huge profits at the expense of smaller pharmacies and consumers.
President Biden’s signature legislative achievement, the Stop Inflation Act, capped insulin prices at $35 a month for government-sponsored Medicare beneficiaries, but the law does not apply to privately insured patients or those without higher-priced insurance.
According to the American Diabetes Association, as of 2023, approximately 8.4 million people with diabetes in the United States use insulin.
