On Friday, the Federal Trade Commission (FTC) announced significant legal proceedings against the three largest pharmacy benefit managers (PBMs) in the United States, accusing these drug intermediaries of artificially inflating insulin prices and directing patients toward costlier insulin products to maximize their profits.
The legal action specifically targets CVS Health’s Caremark, Cigna’s Express Scripts, and UnitedHealth’s Optum Rx, along with their respective subsidiaries involved in drug negotiations. Collectively, these three companies dominate the market, controlling approximately 80 percent of all prescriptions dispensed across the nation.
Pharmacy benefit managers, often hired by employers and government health insurance programs such as Medicare, play a critical role in the healthcare system. They are tasked with negotiating drug prices with manufacturers, managing payments to pharmacies, and determining which medications are available to patients, along with their associated costs.
FTC officials revealed that they have filed an administrative complaint, which remains confidential at this stage, that accuses these PBMs of distorting competitive practices and harming consumers. The agency is seeking to prohibit these benefit managers from prioritizing medications solely based on their profitability rather than patient needs.
The decision to pursue this legal action was supported by the FTC’s five commissioners, with the three Democratic appointees in favor and the two Republican members abstaining from the vote.
In a news release issued on Friday, Rahul Rao, an official with the FTC, condemned the practices of the largest PBMs, stating that they “have extracted millions of dollars off the backs of patients who require lifesaving medications.” He further emphasized that the agency’s legal initiative aims to “put an end to the exploitative conduct of the big three PBMs and marks a crucial step towards fixing a broken system—a reform that has the potential to extend beyond the insulin market and restore healthy competition, ultimately lowering drug prices for consumers.”
