Federal Trade Commission sues largest drug middlemen for allegedly inflating insulin prices
FTC Takes Action Against Major Pharmacy Benefit Managers Over Insulin Pricing #
The Federal Trade Commission (FTC) has initiated action against the three largest pharmacy benefit managers (PBMs) in the United States, accusing them of artificially inflating insulin list prices, resulting in higher costs for patients.
The agency alleges that these PBMs and their affiliated group purchasing organizations created a system prioritizing high rebates from drug manufacturers, leading to artificially high insulin list prices. The companies allegedly excluded available insulin products with lower prices that could have been more affordable for patients, instead favoring higher-priced insulins that provided larger rebates.
PBMs generate revenue through rebates and fees negotiated with drug manufacturers, which are tied to a drug’s list price. The complaint suggests that insulin products with higher list prices result in higher rebates and fees for the PBMs.
The FTC’s action seeks to end what it describes as exploitative conduct by these major PBMs. The agency hopes this step will help fix a broken system and restore healthy competition to drive down drug prices for consumers.
In response, the accused companies have strongly denied the allegations. One company called the FTC’s action “baseless” and claimed it demonstrates a profound misunderstanding of drug pricing. Another stated that the agency’s action continues a troubling pattern of unsubstantiated and ideologically-driven attacks on PBMs.
The companies argue that they have been working to make insulin more affordable for patients. One PBM stated that their health plan customers and members now pay an average of less than $18 per month for insulin.
The industry’s trade group defended PBMs, stating that they are reducing insulin costs by leveraging greater competition. They criticized the FTC’s action as ignoring the progress PBMs have made in lowering costs in the insulin market.
This development marks a significant step in the ongoing debate about drug pricing and the role of PBMs in the healthcare system. The outcome of this action could have far-reaching implications for the insulin market and potentially for drug pricing practices more broadly.