The Federal Trade Commission sued the nation's three largest pharmacy benefit management companies on Friday, accusing them of pushing expensive insulin on diabetics in order to receive millions of dollars in kickbacks from drug companies.
The lawsuit accuses UnitedHealth Group's Optum division, CVS Health's CVS Caremark and Cigna's Express Scripts of unfairly excluding low-cost insulin products from the list of medications covered by insurers.
Lowering drug prices is a key goal for President Joe Biden's administration, and Democratic candidate Vice President Kamala Harris has emphasized working for patients, particularly lowering insulin prices, during her campaign.
This practice harmed patients, including those with coinsurance or deductibles who were not eligible for the discounted prices. The FTC.
According to the lawsuit, filed in the FTC's internal court, the three companies collectively administer 80 percent of prescriptions in the United States.
In an emailed statement, CVS spokesman David Whittrap said the company has worked to make insulin more affordable for Americans and said the FTC is “simply wrong.”
“We stand by our track record of protecting American businesses, unions and patients from rising prescription drug prices,” he said.
Cigna's chief legal officer, Andrea Nelson, said the FTC is interested in scoring political points.
If the FTC were successful in forcing the agency and other agencies to include drugs that have a higher total net cost to health insurance, “the FTC would end up driving up drug prices in the country,” Nelson said.
OptumRx spokeswoman Elizabeth Hoff called the move baseless and said that through negotiations and additional steps, the company has lowered insulin costs for its health plan customers and members to less than $18 a month, on average.
CVS shares were down 1.6% in midday trading, while UnitedHealth and Cigna shares were down slightly.
The lawsuit also names purchasing organizations established in recent years by the companies: Zinc Health Services, Ascent Health Services and Emisar Pharma Services.
“The Gatekeeper of Medicine”
In a statement, Rahul Rao, deputy director of the FTC's Bureau of Competition, said the three pharmacy benefit management companies are “gatekeepers to medicine” that have “squeezed millions of dollars from patients who need life-saving medications.”
“Millions of Americans with diabetes need insulin to live, but for many of these vulnerable patients, the cost of insulin medications has skyrocketed over the past decade because of powerful PBMs and their greed,” he said.
The FTC did not sue the three largest insulin makers — Eli Lilly, Sanofi and Novo Nordisk — but criticized the companies' role in what it called a “broken system” and said it reserved the right to sue the drug companies at a later date.
The drugmaker's shares were unresponsive on Friday afternoon.
CVS Caremark said in a statement that any attempt to limit pharmacy benefit managers' ability to negotiate drug prices would only benefit drug companies.
The three PBMs have criticized the FTC's approach to the industry. accuse someone of being biased.
Express Scripts filed a lawsuit against the FTC earlier this week. Force a retreat Report says PBMs make profits at the expense of small pharmacies
The case will be heard by one of three administrative law judges appointed by the FTC's five-person panel.
FTC officials said that, in general, the agency's internal litigation dockets are usually processed quickly and allow for extensive exchange of evidence between the parties.
