FTC Sues 'Middlemen' For Inflating Insulin Drug Prices

The Federal Trade Commission on Friday sued three of the largest prescription drug middlemen, accusing the health companies of steering diabetes patients toward higher-priced insulin to increase their profits.

The three - CVS Health's Caremark, UnitedHealth Group's Optum, and Cigna's Express Scripts - are known as prescription drug benefit managers (PBMs).

The FTC said they engaged in "anticompetitive and unfair rebating practices that have artificially inflated the list price of insulin drugs, impaired patients' access to lower list price products, and shifted the cost of high insulin list prices to vulnerable patients," the FTC said in a release.

It said the "Big Three" administer about 80% of all prescriptions in the United States.

The trio of PBMs used a "perverse drug rebate system" that placed priorities on high rebates from drug makers that led to artificially inflated insulin prices.

Even when lower price insulin products were available that would have been more affordable for patients, the three companies excluded them in favor of high cost, highly rebated insulin products that allowed them "to line their pockets while certain patients are forced to pay higher out-of-pocket costs for insulin medication," the FTC said.

"Millions of Americans with diabetes need insulin to survive, yet for many of these vulnerable patients, their insulin drug costs have skyrocketed over the past decade thanks in part to powerful PBMs and their greed," Rahul Rao, deputy director of the FTC's Bureau of Competition, said in a statement.

The Biden administration has touted its work in mandating $35 monthly caps on insulin for Americans on Medicare, which has been adopted by some private insurers.

More than 7 million Americans need insulin to survive.

CVS called the FTC's legal action "simply wrong" and said the company has worked to make drug prices affordable.

"We stand by our record of protecting American businesses, unions, and patients from rising prescription drug prices," David Whitrap said in a statement to Reuters.

Cigna Chief Legal Officer Andrea Nelson said the FTC's suit could drive prices higher.
It "continues a troubling pattern from the FTC of unsubstantiated and ideologically-driven attacks on pharmacy benefit managers," she said in a statement to Bloomberg Law.

Elizabeth Hoff, a spokesperson for UnitedHealth's Optum, said the suit "demonstrates a profound misunderstanding of how drug pricing works," Bloomberg Law reported.