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FTC Set to Sue Major Pharmacy-Benefit Managers Over Drug Pricing Practices

 |  July 10, 2024

The Federal Trade Commission (FTC) is gearing up to sue the three largest pharmacy-benefit managers (PBMs) in the United States over their methods of negotiating drug prices, including for insulin. This move follows a two-year investigation into whether these companies have been directing patients away from more affordable medications, according to a report by The Wall Street Journal.

Insiders are reported to have revealed the planned lawsuits will focus on the rebate practices PBMs have established with drug manufacturers. PBMs play a crucial role in the healthcare system by managing prescription-drug transactions for insurers and employers, negotiating discounts with drug manufacturers.

The three PBMs in question—UnitedHealth Group’s OptumRx, Cigna Group’s Express Scripts, and CVS Health’s Caremark—control around 80% of the U.S. prescription market, with, each of these PBMs affiliated with a significant health insurer.

In response to the announced legal action, CVS Caremark emphasized its commitment to affordability. “CVS Caremark is proud of the work we have done to make insulin more affordable for all Americans with diabetes, and we stand by our record of protecting American businesses, unions, and patients from rising prescription-drug prices,” the company said in a statement on Wednesday.

Related: FTC Report Raises Concerns Over PBM Market Consolidation and Drug Prices

Express Scripts also defended its practices. A spokeswoman stated, “We work to combat the pharmaceutical industry’s high prices and lower the cost of thousands of medicines for patients and their health plans, and the data shows that we succeed.”

OptumRx chose not to comment on the situation.

The FTC’s interim report, released on Tuesday, provided details from its investigation. The report examined whether the actions of these PBMs result in increased costs for their clients and, at times, for patients at the pharmacy counter. The PBMs have previously criticized this report, arguing that it is flawed and misleading, and maintaining that they help save money for their customers.

Source: The Wall Street Journal